Eighteen months into the remote work experiment, and while the jury is still out, the “winners” are starting to separate themselves from the pack. Last quarter, I highlighted how “flexible” and “hybrid” workplaces are an integral part of any successful real estate strategy and that companies willing to adapt will have a tremendous opportunity to carve out greater market share. However, this will not be feasible without integrating the latest technology solutions into the business model.
Tenants and landlords who utilize a comprehensive suite of software solutions experienced far fewer disruptions during the pandemic. Some even notched record revenues. These companies are now distancing themselves from their competition by doubling down on their technology strategy. Properties that do not embrace the technological changes (or can’t) will be repurposed for other uses such as residential, medical, data centers and even vertical farming! Yes, I said it, vertical farming! High rises in the central business districts will no longer be 100% office. As this trend materializes, it will be to the benefit of low-rise suburban office, something that Orange County has quite a bit of. Low-rise office is already experiencing greater demand and less vacancy than its high-rise counterpart. Tenants are trading the parking structures and elevators for shorter commutes, simplified ingress/egress and open area environments.
Lower overhead costs, greater efficiencies and better data to drive decision-making has turned into a huge competitive advantage for tenants and landlords alike. For property owners, technology is changing not only how buildings are acquired and operated, but also how people are interacting within them. Whether you are monitoring parking lots, providing virtual tours, using sensors to optimize energy consumption, facilitating tenant activities or marketing vacant space, there is a technology solution available. On the other hand, tenants can return to the office confident that their experience will be efficient and safe. Regardless of industry, businesses are leveraging virtual meetings, scheduling systems, data analytics and much more to improve their customer experience and drive revenues.
Historically, the commercial real estate industry has been very slow to adopt new technologies. There are several reasons for this, but we are now at an inflection point where those who do not adapt will no longer be able to compete.