Trends Poised to Disrupt Commercial Real Estate in 2016: A Recap of the 2nd Annual Disrupt CRE NYC
“We’re in the beginning of the real estate technology revolution.” Mitchell Moinian – Senior Vice-President at The Moinian Group – summed up what we in the CRE industry already know, that 2016 is just the beginning of disruption in commercial real estate. Many of the companies leading that revolution spoke at the Disrupt CRE event, and others used the venue as a way to interact with fellow disruptors.
Here’s a look into some of the most disruptive commercial real estate trends in 2016, as well as the companies leading this real estate technology revolution.
Making Space More Sustainable
This generation has gained the sense that anyone can be successful, and individuals have power over their own economic trajectories. As Michael Gross, Vice-Chairman of WeWork, remarked about our generation’s entrepreneurial attitude: “that’s not changing.”
But change is brewing in commercial real estate. Coworking, for example, is no longer just a cool idea for startups. We’re seeing a shift towards complete sustainability, beyond merely physical occupancy. The idea of sustainable space has grown to include technology, design, and even economics. To that last point, our CEO Mark pointed out that one of the big questions we’re trying to answer in 2016 is: “How do you increase the economic occupancy of a building?”
Repurposing space and using it after hours has been trend-worthy of recent, and it’s one way that a space owner might push the bounds of economic occupancy. Mitchell Moinian says that the “hospitality sector has the greatest opportunity” for disruption in CRE, which points to a shift in how individuals might consume underused space like hotel lobbies, restaurants, bars, and other commercial spaces in the hospitality sector.
CRE disruptors must continue to play to the shifting market. WeWork’s Michael Gross said that “Half of the workforce will be millennials in 10 years.” That means that the trends of today will be more poignant in the years to come. Kevin Maggiacomo CEO of commercial real estate brand SVN said, “Millennials are conscious capitalists.” It’s no wonder, then, that the consumerization of space is pervading not only the tenant side of commercial real estate, but the ownership side too.
Real Liquidity is riding this trend of consumerization by empowering individuals to own and trade pieces of real estate on the company’s secondary market. Real Liquidity’s CEO Kevin Guy said, “I see major shifts in FinTech that allow average citizen ownership.” Attitude shifts and generational trends are already changing the ways we interact with space, and these changes will continue to evolve.
The Convergence of Design and Technology
As the people in space change, the spaces themselves must change too. Even as companies and individuals are becoming more open to these changes, the way we design and manage spaces must also evolve with the market’s changing needs.
Connectivity is perhaps the most important benefit that technology brings to design. Companies like Paintzen, TurningArt, and Building Connected are capitalizing on connectivity and the ability to bridge the gap between demand and supply. Paintzen connects customers with painters and simplifies the process of getting an office (or a home) painted. TurningArt is a turnkey solution for curation, design, and more in art. Building Connected is made for the commercial construction industry and makes bid management more transparent, accurate, and intelligent.
Building Connected is doing more than just leveraging the power of connectivity to create better space experiences. It’s also turning transactions into data to allow customers and service providers to make better decisions. Building Robotics is another company that uses data to improve the experience of space. They create software for HVAC and management systems that employs machine learning to save energy and improve comfort, aligning with the expanding meaning of sustainable space.
Data in Everything
Disruption through data will be a huge trend for 2016 and beyond. The possibilities are seemingly limitless for the type of data we can gather, the ways we can mine it, and how we might use that data.
VTS is a leasing platform tool with a mission to simplify the portfolio management process. The company’s CEO Nick Romito believes that the “Most important aspect of technology is it improves relationships between landlords and brokers.” In order to fulfill this goal, VTS uses the power of data so users can identify trends in their market.
Melissa Marsh, founder and CEO of Plastarc which is a consultancy for space design, takes a full-service approach to finding and using data. Plastarc helps occupants understand the best design and cultural approach for their space, with an ultimate commitment to performance. The company helps spaces implement these changes and continue research to optimize in the long term. Having the right kind of work space is important to culture and economic output, that is, making more money.
“Who wants to make more money?” When Reonomy’s VP of Sales, Liz Young, posed this question to the audience at Disrupt CRE, they responded with laughter. That’s because the answer is everyone, especially in commercial real estate. Data can help make that possible. Reonomy is a data company specializing in commercial real estate market research, and their company is working to prove that data of all kinds can be significant.
Reonomy’s CEO Richard Sarkis said, “we can use public data, but everybody else has their local knowledge. I want to tap into that.” Right now it’s hard to pin down local knowledge to data points, but Space Jam Data is a new company trying to do just that. Their founders believe there is knowledge (and therefore power) in the people, and they pursue that knowledge by asking. If, for example, a commercial real estate developer had a retail space to fill, Space Jam Data would ask locals through social channels to determine what type of shop the locals would want in that space. This idea lends itself to the boom of knowledge-sharing and transparency—trends which will continue to grow this year and beyond.
The people at CompStak believe that there’s immense value in making real estate more transparent through the free exchange of lease comps. The company’s marketplace for lease comps allows commercial real estate entities to make more informed decisions about individual properties and there’s potential to look at the data in aggregate and spot trends.