This morning our team attended Bisnow's event focused on the impact technology has on commercial real estate and the players that make up the CRE and proptech space. Bisnow is notorious for throwing educational and valuable events, bringing together some of the best experts, owners, operators, investors and innovators – and they did not disappoint.
On the heels of launching HqO earlier this week, our team was excited to play a special role at the event: our CEO Chase Garbarino delivered the opening remarks to kick off two rounds of expert panels focused on CRE tech.
If you weren't able to attend, or you were too busy networking and schmoozing, I jotted down the key trends and takeaways from the event. First things first: Chase's presentation focused on the "connected tenant." The connected tenant is really just the way we describe the modern tenant here at HqO. The connected tenant is tech enabled, amenity oriented, community driven, and values experiences over physical things every single time. Bottom line: tenants have evolved and so have the ways in which landlords must engage the connected tenant to keep them happy and loyal. There is much evidence of this shift and data representing how it impacts CRE, but we'll save that for another blog post.
The first panel really looked at CRE tech from all angles and applications within the CRE lifecycle – from the technical considerations in the foundation of a building to a tenant being able to control the AC in their office from their phone. Panelists included Bryan Koop, EVP Boston Region, Boston Properties; Arie Barendrecht, CEO, WiredScore; Andrew Krenning, Solutions Director, Siemens Industry Inc., Amy Korté, Principal, Arrowstreet - IOT, and moderator Eric Allon, Partner, Bernkopf Goodman.
The second panel provided an inside look at how to attract tech giants and keep them happy as tenants. Panelists included Michael Donahue, SVP & General Council, LogMeIn; Thomas Erickson, former CEO, Acquia; Michael Schroeder, Partner, Director of Virtual Design, SGA; David Stewart, National Program Director, EBI Consulting; Brad Barnett, Planner and Design Technologist, Sasaki; Andrew Ginsburg, President, CityLift Parking; and moderator Brandon Tinianov, PhD, P.E. VP of Industry Strategy, View Inc.
Without further ado, here are the top trends of note to watch in 2018:
The Age of the Operator
For so long, the biggest focus in CRE was placed on capital and physical property owners – the deal makers if you will. In 2018, we're entering the age of the operator, said Bryan Koop of Boston Properties. The physical space itself is still so important, but as higher demands and expectations are placed on how the building runs and operates for tenants, property and asset managers will become a critical player for CRE success.
Technology plays a huge role in this shift, primarily because it will make the job of the operator entirely simplified and streamlined. And, operators who fail to adopt proptech will fall behind, from a competitive standpoint operationally, as well as in the eyes of tenants who expect technology as integral parts of their daily interaction with the property.
Personalization for the Win
Following closely behind retail's footsteps, the CRE industry will see a huge emphasis placed on tenant personalization in 2018. An extremely astute observation from moderator Brandon Tinianov, tenants, as consumers, have become so programmed to expect amenities, offerings, and building properties customized to their industry, demographics, location, etc. Which is a perfect transition to discuss the next big trend that emerged from this event...
The Not-So-Future Need for Data
The need for tenant data is no longer a future-looking need – the need is here. Most landlords have no idea who their tenants are aside from the company name of which they're part of, general headcount, and perhaps an email address for the office manager and select executives.
Simple knowledge like gender breakdown, where tenants live, where they eat lunch, where they grab coffee – just to start – could make an incredible difference in the personalization of amenities and events that the landlord could provide to truly stand out in the eyes of tenants.
BIoT is Everything
The Internet of Things in Buildings (BIoT) was referred to numerous times by panelists as a buzzword, but the reality is IoT's influence on our daily life is becoming standard. You name the device and it has probably been connected to the internet – watches, HVAC – yes – but also crazy-to-think items like coffee makers, toaster ovens, and even toothbrushes. In fact, according to Ericcson, IoT is expected to surpass mobile phones as the largest category of connected devices in 2018.
For landlords in particular, if they haven't begun to think about how BIoT will transform the CRE tenant experience, they are already behind. The IoT applications for property are vast – it starts with HVAC, water, energy, and general building management, but it is quickly impacting asset optimization, tenant experience, and space utilization.
Reaching and Keeping TAMI
It all comes back to the customer – the tenant – and the placemakers at this event were clearly focused on the current top tenant category of interest: Technology, Advertising, Media, and Information (TAMI). Recently, and for the first time, the TAMI sector surpassed the financial and services sector (law firms, etc.) when it comes to number of tenants and increasing demand for office space. TAMI is driving a large amount of leasing activity and so their needs, desires, and expectations are catching the attention of placemakers.
Some of those preferences and expectations were shared by Michael Donahue and Thomas Erickson, representing tech tenants on the panel from companies LogMeIn and Acquia respectively. Tech tenants look for buildings that remove friction and facilitate an easier move-in, with adaptability to the company size. Tech tenants look for office space that facilitates interactions with a strong focus on integrating the design with the technology of a building. Tech tenants want their building owners to have a true understanding of their culture, and to shape the building around that culture. Tech tenants want to have a hand in creating and forming the office environment.
This level of tenant satisfaction cannot be reached with the status quo. The biggest takeaway from the event? Landlords need to consider the technology that will transform the very foundation of the building and the overall tenant experience if they want to stay relevant.