Perceptively drawing upon the insights of keynote speaker James Chung, moderator Adam Ducker of RCLCO orchestrated a panel about just how—and just how much—the emerging shared economy is transforming the commercial real estate industry. Among them, the work of the four panel participants embodies many of the master trends of real estate today: Heather Nevin, the design opportunities and constraints that new forms of collaboration offer; David Dochter, how the retail and wider for-profit real estate world is sprinting breathlessly to keep up with the pace of demographic and technological change; Dan Winters, the way environmental concerns increasingly shape real estate investment—and vice versa; and Adam Duckers, how all of this comes together in the shared urban milieu.
The panel first addressed the touchstone shared economy issue of changing real estate ownership models. Heather Nevin described how co-working has evolved to rival traditional office layout and design. Ten years ago, interior design followed a hierarchy model, and was all about the individual user; today, it’s all about activity and the collective identity of the organization, and there must be no barriers. Dan Winters explored how transportation continues to diversify away from private car ownership into multiple transportation modes, in much the same way that, according to David Dochter, retail is evolving to create experiences through multiple channels of goods distribution. In turn, as Adam Ducker observed, not only are residential and hospitality real estate blending to create flexible living options, but a wider number of hospitality “channels” like AirBnB have entered the market.
The speakers next turned to sustainability broadly conceived. Drawing upon his extensive background in both real estate investment and environmentalism—as well as in synthesizing these two often disparate areas—Dan Winters emphasized that the investment community drives increasing energy efficiency and lower cost systems. LEED focuses on real estate at the asset level, but GRESB is more comprehensive and focuses on “shared” real estate at the portfolio level. Advances in building technology also accelerate change in the cost paradigm. Heather Nevin sees the connection between sustainability and the emergence of wellness as a key driver of building evolution and performance management, particularly with the Well Building Standard. Even more broadly, in an age of widespread income disparity, for Adam Duckers, social equity objectives propel changes in affordability and accessibility.
Further, the sharing economy depends upon new forms of transparency to determine how sectors of the economy that society has previously not utilized collectively may now be used together, often with an assist from new technology. Not only is big data making new forms of transparency possible, but Adam Duckers notes that the democratization of data and information leads to greater opt in and sharing models. For Dan Winters, data-dependent crowdfunding continues disruption and reinvention that is beginning to rival conventional financing. Through the looking glass of this technologically enhanced transparency, a new generation of civic leaders is revolutionizing urban growth vision and planning, asserts David Dochter—himself an exemplar of this new generation.
Although still new, the shared economy is evolving amid exponentially rapid change, and in order to adapt to that change thus produces forms of real estate that are fleeting compared with ponderous traditional models. Working on the front lines of retail every day, David Dochter experiences first-hand how pop-up culture is beginning to replace the millennium-long lease paradigm—this is absolutely happening in retail. Change is hurtling so fast that buildings must now be designed with their obsolescence, and potential for retrofitting, in mind from the outset—parking garages are a foremost example. Buildings will be shared among different users over time. Demising walls and unit design are increasingly replaced by plug and play systems, observes Heather Nevin.
All in all, contrasting with the traditional view of real estate as a capital stock, in the shared economy real estate is becoming more like a consumer goods flow of services, with a foreshortened time horizon but with the potential to unlock trapped markets and serve real estate users more effectively in a service economy. This quickstep conception of real estate has truly profound implications for the more tortoise-like idea of real estate with which most of today’s real estate professionals came to maturity. Like it or not, we are all sharing this change.
During the panel, David Dochter mentioned a retail market research report that might be of interest. Clich here to view this report.
Adam Ducker, Managing Director, Urban Real Estate, RCLCO Real Estate Advisors
David Dochter, Principal and Co-Founder, Dochter & Alexander Retail Advisors
Dan Winters, Head of North America, GRESB and Former Senior Fellow for Business Strategy and Finance, USGBC, GRESB
Heather Nevin, Southeast Technology Practice Area Leader, Gensler
Recap Written by Chuck Schilke
This panel provided a summary forecast for changes in their panel’s subject in the next decade. To see the summary, click here.
Click here for an audio recording of the panel.