All of us in commercial/investment real estate don't just act as paper-pushers. Well some do. But the majority work to solve problems. We counsel, we console, we create, we research and recommend. Both based on our experience, and what we find in the discovery process.
One of the items I have talked about for some time is the changing office. Technology is dramatically impacting the modern office, in ways people didn't see coming. More people in any number of industries telecommute, meaning they work from home or the local Starbucks. At the kitchen table, or home office, or sipping a latte with extra foam (in truth, I am a tea drinker), all the while on the web using any number of mobile applications to get the job done.
Which has office owners and Tenants totally rethinking -- and in many cases -- already modifying how they look at space requirements and allocation. In fact, we experienced this phenomenon ourselves. We moved our Prudential Commercial Real Estate offices from downtown Columbus to just north of the northern freeway outerbelt, in an office area known as Northwoods. Nice facilities, slightly smaller space than what we left. But as I was packing my stuff, and watching my colleagues negotiate boxes and files and so on, many felt they had to bring every last item with them. But we didn't need the larger office we left. More of our agents work from home, or as we have recruited agents, they work from offices in other locations they have maintained themselves for years.
And when our big move happened? Well let's put it this way . . . I found myself asking one overriding question, over and over:
Um...Where the hell did all these filing cabinets come from?????
Many of them are empty today, just sitting around in corners or tucked into otherwise unused closets. In fact, we disposed of a number of older lateral file cabinets once we got into our new space. Nothing truly teaches you how much equipment you really need for your business than a move. But innovation, changes in workplace practices, and even technology are playing huge roles in space allocation. We, like other companies are able to do more with less. Tech has obliterated the need for file cabinets. We no longer have a largish server room for our technology. One telephone switch room now. "Cloud" computing reduces not only our need for dedicated information technology space, but for companies in other industries also.
We have a lot of desks, too. Interesting considering that half our commercial agents -- some of the most productive in our shop -- work remotely.
Doing more with less space is the watchword, and companies like ours -- with only a handful of exceptions -- are making it happen. It is both the technology and changes in human behavior that are at the heart of the office makeover revolution.
Forbes Online has an article about how college kids are more accustomed to doing their homework from virtually anywhere but home. They even don't go to libraries or a place where there is a desk anymore. And as they gravitate toward the workforce, they bring those "telework" habits with them. They can work anywhere. Products like the iPad make it easier also for collaborative creation. Far less need for offices and those desks.
Our front line tech at PCRE is our new phone system. We no longer need a dedicated receptionist, as the modern commercial real estate brokerage and other firms are utilizing, well, modern telecom systems. Incredible efficiency that is allowing us to redeploy our resources during a down economy to areas where it is more sorely needed. We had some initial hiccups with the deployment of VOiP. But the underlying philosophy is sound.
Elsewhere in commercial real estate, Forbes notes that shopping malls are changing. With the rise of e-commerce combined with advancements in mobile technology, malls are desperately working to adapt to attract shoppers. How? As they want more shoppers and for people to come to the mall more frequently, they are creating destinations that are less about the retail, and are more about the social meeting experience. Witness the rise of upscale restaurants, spas, performances cultural activities and educational classes.
The Web is changing our physical space. And some project it may spur an unheard of construction boom, and more and more fiber optic lines must be laid to upgrade communication infrastructure, Why? For as the Christian Science Monitor noted recently, physical presence is very expensive. It costs a lot to get from where you live to where you work or shop. Office and retail space are expensive to build, rent, and maintain. Keeping the space cool in the summer and warm in the winter, and clean at all times, is expensive as well.
So you shop online? Well, think about it. You reduce the need for bookstores, drugstores, and many other retail functions. Many of these same stores will shrink to small sizes where they are almost unrecognizable -- or they will evaporate.
Today our office is our computer, writes one Monitor guest columnist. "Physical mail and the need to sort it and deliver it is less important. Most of our files are electronic. Many of us spend little time at our office desks and more time working at home. More firms are having their employees share office space or are making offices very small and sharing conference space."
All of this may lead to a significant construction boom, predicts one futurist in the Monitor. He speculates that as people are required less to drive to work, that public transportation equipped with wi-fi may grow as business people opt to just go to the office one day a week. He sees malls with empty retail spaces being demolished, to be replaced by more single family or multi-family housing stock. That a new society constructed under the influence of the internet (just as the advent of the previously unheard of drive-in theater was influenced by Henry Ford and the Model T). A society that relies less on brick and mortar destinations.
Truly, I don't see anything that immediately transformative happening. People still want to get out. They want to drive to the mall, or wherever, to have a meal out. Human beings are social animals. We can't be cooped up inside homes and apartments working, ordering our jeans and take out meals. People need to get out. They like to peruse shops. And we travel. Still, it is an interesting prediction whose results will only be known over the span of time. But malls, offices and other commercial space is morphing as technology applications continue to explode.
Nevertheless, in the present day many commercial brokerage clients are looking at energy usage also, and as Tenants and Owners, alike, start focusing on smarter usage practices, commercial real estate practicioners will increasingly look for and recommend the best methods for marketing, financing and promoting social incentives to lease space, or even move office and other buildings that are for sale.
Technology is changing things. And in most areas, making businesses and square footage usage far, far more efficient.