Leadership Insights from Chelsea Rao
As I write this essay, it is nine months after the Coronavirus pandemic first escalated in the U.S. and I am looking forward to having 2020
What are healthy buildings of the future? Will they command greater value post-covid?
How can data science be utilized to automate building operations?
In light of COVID-19, how will designers plan and design amenity spaces to respond to changing consumer needs?
On October 8th, 20 members of ULI Washington’s Innovation + Technology Council met to formulate answers to these questions. We asked council members Brad Dockser, CEO of Green Generation, Alex Shtarkman, Vice President at Revolution, and Khushbu Sikkaria, Vice President, Mid Atlantic at Lincoln Property Company to share insights generated during those discussions.
Moderated by Brad Dockser
Covid-19 has completely changed our thinking about what a healthy building is, creating some uncertainty for the future. Will a healthy building not command a premium like the early days of LEED or simply avoid the voluntary discount that an unhealthy building might see?
We kicked off our conversation by defining what a healthy building is today. Does a healthy building refer to air quality? Perhaps a design that stimulates movement and activity? From whose perspective is a building “healthy?”
Even without a clear definition, many signals point to an increased focus on healthy buildings moving forward. The design community is now being asked to address health more than ever before, and architecture firms are committing major resources to design the building of the future. And from a leasing perspective, health and safety are increasingly being sought by prospective tenants.
So what will healthy buildings look like moving forward? Our group had the following insights:
– Communication will play an increasingly important role. For years, owners and operators have sought ways to integrate technology and health into their spaces, but now we must make those elements more explicit—more obvious. This communication coupled with technical improvements in building design and system will be crucial to getting people to return to the office. Until that is done, a return to “normal” will be impossible.
-Healthy buildings will create more data and owners must be prepared to address concerns about data privacy and how that data will be used and monetized. Owners and operators must develop strong data protection policies and practices to reassure tenants.
-Through the use of technology and improved design, we can create environments that better foster long-term health and productivity. Improved air quality, better lighting, spatial analytics, occupancy sensors. and touchless entry systems are a good starting place.
AI and Data Science
Moderated by Alex Shtarkman
The challenge with understanding AI and data science as it pertains to real estate is as much definitional as it is a question of application. What most refer to as AI is actually machine learning (automating the answer) as part of a broader data science focus (answering questions with data). AI on the other hand is best thought of as machine learning, but with a human interface.
With the definitions out of the way, the inherent challenge in data science breaks down into a couple parts: data aggregation and normalization; understanding the limitations of the data (question of sparseness and biases); and eventual interpretation. Overcoming each of these factors is challenging, particularly without material investments in a data science team and software resources. However, even if these challenges can be overcome, it is really up to the culture of the organization to believe in the power of data science vs. historical reliance on legacy processes and institutional knowledge. There needs to exist fundamental buy in by the key departments and stakeholders in the organization for the implementation of data science to be truly effective. In a world where immediate ROI is key, investment in data-driven decision making is really a long-term commitment.
The applications of AI / ML also go beyond just decision making, but play a key role in shaping the end customer experience and defining one’s real estate brand. At a time where contactless, digitally delivered amenities are increasingly preferred by consumers, staying ahead of the curve on usability and flexibility of real estate assets is paramount to ensuring long-term competitive differentiation.
Early already reaping the benefits. Here are some of the current and potential future applications of AI and Data Science in the industry:
Future of Amenities and Units
Moderated by Khushbu Sikaria
The conversation quickly pivoted from “what will be the long-term impact of COVID on amenities?” to “will there be a long-term impact on amenities due to COVID?” Will the effects of locked down and socially distanced amenity spaces be forever ingrained in the minds of customers akin to how the Great Depression led to a cultural shift converting people to lifelong “savers” or will this be a short blip in the minds of Gen Zers and millennial renters who are not as fatally vulnerable to the risks of the virus? We did not reach a consensus, but the one behavioral trend we agreed would stick is the continuation of flexible working arrangements and an increase in working from home. The potential impact on multifamily is twofold: 1. demand for larger units, and 2. greater emphasis on co-working amenity spaces.
It is obviously challenging to expand existing units to meet the demand for larger units. It may also not be economically feasible to add substantially larger floor plan types into new developments. These challenges are leading to increased investment activity in new asset types such as townhomes and single-family home rental communities that offer larger floor plan options for millennials who desire more space to accommodate the everything from home lifestyle.
Secondly, those working from their units in multifamily buildings will seek out ways to get out of their apartment even if it is for a couple of hours a day on the days when they are working remotely. Consequently, prospects will search for communities that offer well-programmed, high-speed, co-working spaces throughout the building, allowing them a flexible, comfortable, and productive work away from home environment within the building. Areas that contain additional perks, such as teleconferencing accommodations, can be monetized as a pay per hour amenity.
Interested in more insights on innovation and technology? Check out ULI Washington’s Innovation + Technology Council.