There are two roads which are leading to a radical change in real estate industry, one is through tech startups that are breaking up the residential supply chain. Companies like Settled which are drastically changing the way homes are sold by removing the traditional agent out of the supply chain. The second is from coworking spaces like The Impact Hubs, which have changed workplace culture, leading to design shift and a value proposition of commercial real estate.
From the culture side the journey started in 2006 when the first formally identified coworking space opened its doors in San Francisco. At the time they would not have been able to foresee their global impact or how they would change the culture of work forever. Firstly, it changed our perception of workplace aesthetic and design as it showed a new way of organising an office away from the cubicle formation. This in turn affected how people related to each other in a workspace environment, catalyzing a more open work culture. Fast forward to 2009, when we opened our first coworking space, the crash had just happened adding another important element. The lack of jobs and the feeling of uncertainty spiked the demand for coworking spaces, as people found themselves needing spaces to set up their own businesses and find link minded people who would help move their ideas forward.
Our main goal at the time was to offer a beautiful space which would inspire and lift people from the recession. The reception was immediate, however we quickly realised that people were looking for something more than just space, they were looking for community, knowledge, and resources. By 2011 when we opened our second coworking space in New York City, people were fully on board to this new way working. Furthermore, technology was now making the barrier to business more affordable than ever before, which meant more people were succeeding as entrepreneurs. Technology's facilitation of new business and innovation firmly established coworking spaces as hotbeds for innovation and collaboration. This movement, pricked the interest of multinationals, who became interested in recreating this type of culture and innovation for their own companies. We have had leading architect firms analyse our spaces with the hopes of giving their client a coworking style office. Furthermore, companies like Facebook and Google have set new precedence in what it means to provide employees with a "cool" or innovative workspace.
Urbanisation is driving people into cities therefore forcing demand on limited space, invariably costs rise. Companies are no longer measuring value of an office space by how many people per sq ft can produce a required output but by the innovations they create internally. Companies/leaseholders are now demanding more from buildings, they do not want to be provided with just an empty, dull, and factory like building, they want well designed spaces, which will help breed innovation and collaboration that attract talent and help build company culture. The most recent example of this evolution is the recently opened Alphabeta building in Moorgate, London. In the next wave we will see the rise of smart buildings, technology will have a more direct hand in changing how the commercial real estate industry operates.
From the residential perspective, the area of most change is within how we rent and buy, according to Techcrunch "the entire process of leasing or buying a property will eventually take place online". It is an area within the industry that is not just easy to update to the digital era, but also needs conceptual innovation. Available rich data and connectivity is empowering individuals and as we close 2015 there is an apparent rhetoric that there is no real need for an estate agent to sell your house, especially when many industries are becoming more consumer led. According the Settled's CEO Gemma Young the consumer's voice has more of a place in shaping products, services than institutions that fit around them. In other words, if we are becoming more peer led in our consuming choices, it makes sense for peers to sell to peers and cut out the middleman completely.
A previously distant 'top-down' industry is now being democratised via technology, in both culture and consumption, and we are now seeing an era of the real estate industry being humanised. In the UK there are landlords with projects such as Land Securities search for retail technology, and the Canary Wharf Group's funding of an smart city accelerator programme. In the United States companies such as the Kushner Companies investment and board representation on Honest Buildings and Blackstone's investment in ViewTheSpace are exemplary of how the culture of workplace innovation is now being adopted by the real estate industry. The next five years are going to be very interesting for the property industry as economy, consumer demand, technology, big data and culture continue to mould and influence it.
This article was written in collaboration with Josh Artus, Property Director for THECUBE London @joshartois