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Here’s what you need to know today:
- Technology Disruption Is On The Horizon For CRE
- Finding The Right Suburban Office
- How Austin Became The Top City For CRE Investment
- Why The On-demand Workforce Is Crucial For The Future
- Healthy Work Habits To Adopt For The New Normal
- Citigroup Will Adopt Hybrid Arrangements Moving Forward
Technology Disruption Is On The Horizon For CRE
Technology has been readily embraced by companies over the past year, and the increase of automation and AI is anticipated to transform the workforce even more after the pandemic has ended.
This is particularly true for the commercial real estate sector. For instance, Jeff Saul, cofounder of real estate software platform Nativ, says he can research and write a credit memo in 10% of the usual multi-day long process.
“We’ve studied the labor components of junior-to-midlevel CRE professionals, and have concluded that more than 85% of time expenditure is on highly automatable tasks,” said Saul. “Our goal is the automation of all non-subjective components of this workflow. Eventually we hope to take on the subjective parts as well, although we believe the industry isn’t quite ready for that today.”
Nativ is one of many new companies within the proptech industry that aims to accommodate the anticipated demand of these tools in the near future.
This new technology doesn’t just have the ability to take over low-skilled, menial tasks. Now, companies providing “robotic process automation” are climbing the corporate ladder and accomplishing work done by well-established professionals, such as lawyers and doctors.
CRE has been infamous for its slow embrace of technology, but the pandemic has accelerated the pace of adoption for the industry.
Even so, a managing director at JLL Peter Miscovich said CRE will still be slower to adopt AI than the insurance and financial industries since it is still catching up, but it is gearing up for disruption.
Finding The Right Suburban Office
Despite the low occupancy of offices in major cities, the suburban office market is expected to continue growing into 2021 as people seek workspaces closer to their homes.
Office owners and investors are shifting their sights to suburban areas, particularly Sun Belt cities, in order to accommodate new demand from new remote professionals and cut down on expenses.
According to a recent Colliers report, there was up to $10.3 billion in investments that went to the suburbs during the third quarter of 2020 compared to the $3.3 billion in central business districts (CBD).
So what do companies need to look for when adopting alternative workspace solutions outside of metro areas?
The need for city-level amenities and resources are still desired. Finding a market that provides the perks of big city living, such as restaurants, retail and public transit, will be crucial when choosing a new place to open an office.
Ensuring access to the outdoors will also be increasingly important for new workspaces. Because physical and mental health have officially come to the center of many company’s initiatives, providing workers with access to favorable climates and plenty of outdoor space will be ideal.
In order to adopt flexibility, companies should look into using coworking or flexible offices as part of their operations as they make it simple to accommodate workers’ unique scheduling needs, while also providing them with necessary office amenities.
How Austin Became The Top City For CRE Investment
At the beginning of the pandemic, Austin’s economy was looking grim as businesses were forced to close and one of the city’s biggest economic boosters, the South by Southwest festival, was canceled.
However, one year later, optimism has once again emerged as commercial real estate investments continue to grow and corporations relocate to the city.
“It’s the hottest market in the country right now,” said Mike McDonald, vice chairman at Cushman & Wakefield. “Millennials are moving to the Sun Belt, and companies are following the millennials. Investors are following the companies.”
In fact, CBRE states that Austin has displaced Greater Los Angeles as the number one market for commercial real estate investments because of its resiliency in the labor market.
The pandemic led to a net loss of 33,400 jobs in the city’s metro area, but as new companies continue to migrate into the area, the city has been able to mitigate the loss better than others.
In fact, a record 22,114 jobs were attributed to companies expanding or moving into the city last year.
Tech giants, such as Apple and Facebook, have flocked to Austin for its lower costs of living and thriving technology-driven culture.
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Even other areas as part of the Sun Belt have felt an economic boom from the city, with the Dallas-Fort Worth area ranking second in CBRE’s investment survey.
Why The On-demand Workforce Is Crucial For The Future
The post-pandemic workplace won’t be a return to normalcy, nor will it be a total continuation of the necessary changes that the workforce had to undergo over the past year.
Instead, it is likely that businesses will take components, like remote working, on-demand models, distributed teams, and apply it for the future in a more flexible manner.
While innovation has taken a back seat during this tumultuous time, it is expected to pick up again. Still, business leaders will need to make improving employee skill sets a priority moving forward
According to McKinsey, nine in 10 executives stated they were expecting or actually experiencing a skills gap, which means that closing the gap is becoming more challenging.
Knowing this, it’s clear that hiring and training full-time employees for every single role is complicated.
Accessing talent can be difficult, especially when leaders have to account for the slow down in projects, overspending and more. This is why so many companies are adopting on-demand freelancers that are already highly-trained in their skills and can play an important component to the team.
But improving the hiring process will be essential. Having a team of qualified experts ready to work is a good way to onboard talent quickly.
In order to onboard, businesses need to have a clear view of their expectations and outcomes in order to produce the best work.
Healthy Work Habits To Adopt For The New Normal
The “new normal” has become a popular term to describe the post-pandemic world that we are preparing to enter.
For many professionals and businesses, there are no guidelines to how to approach this new way of operating.
The idea of transitioning to a totally new way can be overwhelming and stressful to cope with, especially if you’re the one making the rules.
However, adopting new habits can make entering the unknown feel more attainable and actually improve how you work in the future. But where do you start?
For starters, it’s important to find your center and stay grounded. This can be done by simply finding a comfortable position, closing your eyes, placing your hand over your heart and taking deep breaths.
Another way to help alleviate feelings of stress or work-related anxiety is to take a step outside and surround yourself with nature.
Research has found that even just the sounds of nature can improve your heart rate, so take a walk outside to help enhance your focus and get you through upcoming projects.
Along with these practices, incorporating meditation into your daily routine can greatly improve your mental health and relationship with work.
Meditation can help you relax and bring your attention inward, which can be therapeutic and help you kickstart a productive work day.
Citigroup Will Adopt Hybrid Arrangements Moving Forward
An internal memo from Citigroup CEO Jane Fraser announced that most employees will work remotely up to two days each week.
“While some roles require the sharing of information in real time, many others have proven to be equally and, in some cases, more productive from home,” said Fraser.
The U.S. bank is one of many other companies, including Adobe and Facebook, who are moving forward with hybrid working arrangements. While each arrangement varies, they all simultaneously agree that the traditional five-day work week is no longer feasible.
This seemingly mass migration to a more flexible work schedule is anticipated to complicate things for the commercial real estate industry.
While vaccination distribution has led to optimism about workers returning to the office, it is still unclear how much demand for workspaces there will be inthe future.
However, data indicates that while demand is growing, metropolitan areas won’t see a rebound back to pre-pandemic numbers until at least 2023.
It is still unclear what Citigroup’s real estate footprint will look like in the future, but the company is making other changes like instituting a “Citi Reset Day” to ban internal video meetings on Fridays and allowing a portion of their staff to stay completely remote.Share this article