- Post-COVID, remote work flexibility has fundamentally transformed real estate, emphasizing the importance of direct relationships between asset owners and end users, especially with changing occupier needs.
- AI’s rapid advancement will materially change the real estate industry, necessitating caution against hype yet recognizing its significant impacts.
- Flexibility and service level in workspace models are critical, with expectations of market consolidation and government incentives driving retrofitting and repurposing of buildings.
This article is based on the Allwork.Space Future of Work Podcast episode featuring Ivo Van Breukelen, Managing Partner at PropTech Connection. Click here to listen to the full episode.
As the real estate terrain continues to evolve in the post-pandemic era, one critical question looms large: How will technology and human behavior reshape the future of our built environments?
In a recent discussion of the Allwork.Space Future of Work podcast, Ivo Van Breukelen, Managing Partner at PropTech Connection, addressed this very question with his incisive perspectives on the industry’s ongoing transformation.
This conversation provided a comprehensive look at the numerous forces reshaping real estate today — from the deployment of flexible workspace models to the necessity of retrofitting and repurposing existing buildings, spurred by both market demand and political incentives.
Van Breukelen emphasized just how much real estate has fundamentally changed post-COVID. With widespread remote work flexibility, people’s use of spaces has transformed.
Evolving Needs Forcing Change
U.S. data has shown that workers with advanced degrees are now 30% more likely to work from home, a group that has previously been a mainstay in senior leadership in offices.
In an attempt to better understand their audience’s current needs, asset owners are shifting to build relationships directly with end users versus just corporate tenants.
“Nowadays, people understand Teams, Zoom, and obviously having these vertical meetings, and they built their life around it,” Van Breukelen said during the podcast. “So what you see from an occupier or heads of real estate — they’re looking at these empty spaces, paying whatever, one, two, three, $4,000 a square meter, subject to, obviously where that asset is located, but then escalating inflation, you look at labor constraints…they’re kind of stuck. Startups are going virtual, but we’re seeing the needs of occupiers are changing.”
Another factor that companies should endeavor to better understand is the pace of technological advancement, and its impacts. Van Breukelen referenced a prediction that artificial intelligence (AI) will jump from an IQ of 50 today to 200 in just a few years. He cautions about hype but stresses that the impacts are real and material. While definitive predictions may prove bold, the trajectory is clear.
“We think this is a material change. AI is not a buzzword. It is really going to change a lot of things,” he said.
The Future of Coworking and Downtowns
In terms of flexible workspace models, PropTech Connection sees lots of activity in small meeting rooms, events spaces, and storage solutions. The key is balancing flexibility and level of service provided.
Currently the market is highly fragmented with many operators, but global brands are expected to enter and consolidate.
Van Breukelen discussed the evolving strategies asset owners in the U.S. are employing, and he noted the ongoing demand for Grade A office spaces in central business districts, likening the availability of such prime real estate to pop-up retail stores.
While Class A space in central business districts will retain allure, retrofitting and repurposing buildings is anticipated to accelerate. Incentives from governments will be necessary to compel owners to take action.
“We think there’s going to be a big push from politics, from governments to repurpose a lot of those assets. We see that happening if we see a lot of activity,” Van Breukelen said on our podcast.
Adapting to Occupier Needs
Van Breukelen emphasizes uncertainty about whether there will be definitive solutions that emerge. The range of potential outcomes across regions and countries means real estate must continue adapting. Still, the magnitude of changes underway make this an interesting era to watch.
Occupiers now want to understand employees better to cater offerings to their needs, and they must in order to remain relevant.
Brand distinction and flexibility are emphasized as critical differentiators for asset owners, and he pointed out the challenge of market saturation with many companies offering similar solutions, making it difficult to differentiate between them.
As Van Breukelen painted a picture of the future, he underscored that success in real estate will hinge on the ability to navigate these turbulent changes with agility and foresight.
