CoreNet Global is a world wide non-profit organization that represents executives in 50 countries who manage the real estate assets of large corporations. Derek Hermsen of Union Street Corporate Real Estate, LLC attended the CoreNet Global Summit held in Seattle this past November. Over 2,500 people were attendance at the summit. It was a great conference and here are his takeaways:
1) Dr. Peter Diamandis as the keynote speaker was inspiring. He is a futurist and entrepreneur; and his book "Abundance" is a fascinating read and look into the future. His take on the direction of real estate:
Sell your parking garages or have a plan to re-purpose them. He believes that autonomous cars will be incorporated into the mainstream in the near future (3 years +/-). More on autonomous cars’ impacts can be found following this link.
All companies will be "tech companies" so start digitizing your business.
All companies must constantly experiment.
Technology is now moving exponentially and companies need to reinvent themselves every 6 months.
2) Landlords will need to adapt to a new world of lease structure. Corporations need flexibility in their leasing and growth/retraction due to the exponential growth of technological advances. Coupled with pressure from FASB, leases will become shorter term, and companies will lease less space (Cisco had 60 buildings; got rid of 21 buildings, while growing headcount by 15%). To remain competitive with WeWork and other "variable work space solutions", landlords will need to incorporate a "hospitality feel" to their entry lobbies, add flex spaces/variable use spaces, add amenities (Google allocates 20 -30% of their space to these things in their buildings), and landlords will need to develop "workplace brands", similar to what hotels do.
3) Worker autonomation: up to 60% of the workforce will be independent contractors within 10 years.
4) Corporations will need to appeal to the "human experience" in their design to keep digital talent. They need to take the friction out of life and incorporate sensors and machine learning (i.e. smart buildings which adjust to personal preferences, can track employees’ uses of areas, identify patterns and predict needs).
Union Street Corporate Real Estate, LLC extends a big “thank you!” to Quarem out of Houston, Texas for sponsoring its attendance at the conference. CoreNet Global’s next summit will be held in Boston this Fall.