Last week’s CREtech meetup in Boston was a breath of fresh air, focused on how REITs and commercial real estate portfolios are investing in technology today to improve operations and enhance experiences. This emphasis on creating memorable experiences, rather maintaining and buying the physical assets, seems to very much be a tidal change for the industry, driven largely by the customer (the tenant) need to attract and retain talent.
Effectively, the tenant isn’t forcing the change, but the tenant’s employees are. That change isn’t represented in the industry headlines we all see about blockchain (there were many a joke about the false urgency on blockchain at the event).
Instead, portfolios are trying to find real solutions to the challenges they face right now. For example, Charlie Kuntz, Innovation Officer at Hines, explained that his team is assessing how to make it easier for tenants to move through the physical portfolio when their space needs expand or change across markets. Brookfield Properties, according to Kevin Danehy, Global Head of Corporate Development, has been laser-focused on streamlining technology across the business, eliminating tools that effectively do the same thing, for stronger portfolio-wide intelligence.
Sarah Abrams, SVP of Global Real Estate at Iron Mountain, shared her perspective as an occupant, relying largely on outsourced facility management service providers. In this case, the actual sale is often to the FM provider, but you still need to explain how the technology helps the business operate better, with a focus on creating value, lowering costs and mitigating risks.
These firms, traditionally the customers of technology companies, are now becoming the investors. Brad Greiwe, Cofounder and Managing Partner of Fifth Wall Ventures, a venture capital firm backed by real estate owners including Hines, CBRE, Macerich, and Rudin, explained why these investments are happening: a strong desire and need for these startups to thrive and to help shape their direction.
No matter what the technology is, the panelists agreed that it has to prove its value and that often starts with the actual users, who aren’t often the budget holders or final decisionmakers. Mike Hart, Senior Vice President, Data Management at JLL, stressed how important it is to create a groundswell of support for the technology you’re pitching. In short, find your champions. That is critical for any major change you’re trying to do.
Thanks to CREtech for organizing such a great event, and thanks to our neighbors at Boston Properties’ 100 Federal for hosting at the building’s new Exchange.