CREJ

September 2017 — Office Properties Quarterly —

Page 19

www.crej.com

Market Trends

e see it happening more

and more these days –

Denver nabs a headline in

a national business publi-

cation. It happened in July

when the Wall Street Journal ran a

piece calling out Denver’s success in

recruiting financial services firms.

In the article, “Passive Migration:

Denver Wins Big as Financial Firms

Relocate to Cut Costs,” the afford-

ability of real estate – both commer-

cial and residential – is a prime fac-

tor in what is drawing top-quality

financial firms away from coastal

markets and to our region.

As commercial real estate profes-

sionals who specialize in working

with financial services firms, we

have noticed that as Denver’s finan-

cial services industry grows, it is

being presented with new challeng-

es. From new technology and global

workplace trends to changes in the

national immigration policy, outside

pressure is forcing financial ser-

vices firms to adapt not only their

business strategy but also their real

estate strategy.

In this article, we will examine

three challenges currently facing

the financial services industry and

discuss how they impact a compa-

ny’s approach to real estate.

•

The emergence of digital currency.

Although it was created nearly 10

years ago, if you mentioned the

term “bitcoin” to someone on the

street as recently as 2014, you were

likely to elicit a blank stare. Today,

however, that’s far from true.

Bitcoin is perhaps the most well-

known form of blockchain technol-

ogy, which is the technology that

allows for online

trading of digital

currency. Venmo,

which is owned by

Paypal, is another

popular digital

currency payment

application. And

as companies like

Apple introduce

their own payment

vehicles, it can be

assumed the pro-

liferation of digital

currency will only

rise.

This presents

several challenges for traditional

financial services firms. Foremost,

it’s competition for where and how

people manage their money. As

use of digital currency increases,

demand may weaken for traditional

banking services.

It also is a challenge in terms

of real estate planning. As people

become more comfortable manag-

ing their money online, the need for

traditional brick-and-mortar bank

locations may lessen. Nearly 40 per-

cent of Americans have not walked

through the doors of a bank or

credit union in at least the past six

months, according to a December

2016 report by Centric Digital.

This could either increase cor-

porate financial services staffing

needs, as roles that used to be

based at a branch are now central-

ized in a corporate or regional head-

quarters, or it could reduce corpo-

rate headcounts as the overall pro-

cess of managing money becomes

more streamlined. In either sce-

nario, financial

services firms

need to regularly

re-evaluate their

space require-

ments in the face

of technological

innovations like

digital currency.

•

The pendulum of

working remotely.

As a multigen-

erational team, it’s

fun to look back

on how the corpo-

rate workplace has

changed. For one of us, we grew up

in a society where the corner office

was the dream, complete with an

ornate desk and overstuffed leather

chairs. Beginning in commercial

real estate, we reported to work

at the same time each day, and

when we left the office for the day,

our desktop computers were left

behind.

For the other half of this team,

our entire professional career has

included being able to carry a com-

puter around in our pocket, mean-

ing we can work from anywhere, at

any time. Our dream office doesn’t

include a door and mahogany desk

but rather an open floor plan, the

latest technology and plentiful on-

site amenities.

One out of every four American

workers telecommutes with some

regularity, according to a March

article in Business Insider. That’s

a dramatic change from the world

before smartphones.

Although the ability to work

remotely may be one of the stark-

est comparisons between today and

generations past, we are already

starting to see the pendulum swing.

This past spring, IBM made

national news when the company

announced it was pulling back on

its work-from-home policy to foster