Shaping the Future of Commercial Real Estate: Today's Innovations, Tomorrow's Standards
Shaping the Future of Commercial Real Estate: Today's Innovations, Tomorrow's Standards
What should a Real Estate Company’s DNA be in order to offer real value to customers, investors and communities?
It’s time to introduce a new kind of Real Estate company, one that aims to disrupt the status quo.
In today’s Newsletter we will break down what the key principles of The Real Estate Company of the Future should be and why it is important for the Real Estate sector to seek new ingredients that can help bring positive change into the market.
Now, let's dive in.
A Vertically Integrated business:
In today’s market in order to offer real value we need to focus on the customers we serve and tailor the product in order to satisfy their needs and aspirations. A vertically integrated business provides multiple stacked offers under a single brand. This allows a business to exert more control over its process ensuring higher product quality, resulting in higher customer satisfaction.
Traditional Commercial Real Estate entities would operate in silos with distinct separations between investors, owners and operators. The result of this often is a very poor customer experience, because often the interests of the different parties are misaligned.
The influx of flexible office operator brands and technology (PropTech) has disrupted all of this. Customers now want a much better experience from the office
This in turn has pushed many companies to stack more offers within their Business Model transforming them effectively into Vertically Integrated businesses.
During my time with Brookfield Properties I experienced what a vertically integrated business meant from the inside. Investment Management, Asset Management, Development and Property Management coexisted under one roof. The european business even had a Construction arm (Multiplex) acquired in 2007. The company took a long-term approach for each product and this philosophy filtered all the way through to the customers.
Traditional companies for example have adapted and integrated Flex Office Operations activies:
Landsec = > launched the brand Myo.
British Land = > launched the brand Storey.
Recently many more new companies have been launched integrating Investment and Operations activities:
HB Reavis = Development + Proptech + Flex Office Operations.
Edge Technologies = Development + Proptech + Workplace Operator.
General Projects = Development + Workplace Operator on selected projects.
Lately Caleb Parker has launched Brave Capital a vertically integrated Full Stack Real Estate company. Brave Capital’s full stack model integrates under one roof: Management, Hospitality, Brand, Technology, Space.
Has B-Corp status:
Real Estate has a profound impact on communities and on the planet. Therefore it’s really important that the activities generate positive impacts on both of those spheres. In order to do this it’s key that business performance and success is measured based on the benefits produced for environment, society and shareholders (triple bottom line).
Dirk Dusseldorp founded LendLease adopting a triple bottom line approach as foundation to the business. For its time he must have really been a pioneer of this philosophy.
”Companies must start justifying their worth to society, with greater emphasis placed on their environmental and social impact rather than just straight economics.”
Dick Dusseldorp, LendLease 1973 Annual General Meeting
In recent years the B-Corp movement has taken off and there are a number of Real Estate companies that have decided to adopt the B-Corp Charter:
Fore Partnership has a strong focus on Adaptive Reuse of existing buildings.
Stories: supports projects with a strong social impact ethos.
I’m inspired by what these companies do and I hope they will inspire the broader industry to take action towards positive change.
Using AI to boost customer service offer:
AI has been around for many years, but since OpenAI released its Large Language Model (ChatGPT) the consumer adoption of this technology has grown exponentially across the globe. Microsoft Office has recently integrated OpenAI’s tech (Copilot) into Microsoft 365. For example this means that every employee at Corporate organizations that run Microsoft 365 will have direct access to Generative AI directly within the Microsoft Office Environment.
Real Estate is probably the slowest adopter of technology when compared to other sectors. For this reason it’s ripe for disruption.
Customer service offer can be boosted thanks to the fact that with Generative AI a lot of mundane repetitive tasks can be taken care of through improved automation. As a consequence this will release more free time that can be dedicated to activities that require high Intellectual input.
To inspire you below are a few selected AI applications that promise to disrupt the status quo:
Consigli = the Autonomous engineer helping to optimise and deliver optimised MEP systems.
Laiout = helps generate automated floor plans in seconds.
Simplicity by Anacle Systems AU = helps manage property operations and financials.
Avy tmpl = AI chatbot to improve tenant experience.
A strong Brand Identity:
A business integrating investment, delivery and operational activities has to pay attention to how it communicates both in a B2B as well as a B2C context.
A strong brand identity can really help a company to build a “tribe” of customers who start naturally gravitating towards it because they believe in its long-term vision.
One of my favourite books “Starting with Why” by Simon Sinek, articulates very well the significance of what makes brands strong.
My favourite quote from the book sums this up very eloquently:
“People don’t buy what you do, they buy why you do it.”
Simon Sinek, Starting with Why
Apple is a great example of what Simon is telling us in the book. They share their vision starting with “Why”:
“With everything we do, we aim to challenge the status quo. We aim to think differently. Our products are user-friendly, beautifully designed and easy to use. We just happen to make great computers. Want to buy one?”
Simon Sinek, Starting with Why
Conclusion:
I hope this Newsletter will help inspire the exploration into different business models and how doing something slightly different may help promote positive change capturing the opportunities that the market currently offers.
Look out for examples of companies that have recently launched as examples of what can be achieved.
The Real Estate Company of the Future is here, featured by:
Vertically integrated offers.
B-Corp principles.
AI enhancements.
A Strong Brand identity.
That’s all for today.
See you next week.