CREJ - Office Properties Quarterly - September 2016
CoreNet Global recently took an exhaustive look at how corporate real estate will function in the future. The final report, “The Bigger Picture, the Future of Corporate Real Estate,” examined several areas including technology, risk mitigation, cyber security, the environment, corporate social responsibility, the global economy, people/talent and the future of cities. The future of corporate real estate will, of course, have a direct impact on the operation of the wider commercial real estate industry in Colorado as well as globally. Below are several of the key takeaways from the report for commercial real executives and leaders to consider. Technology. People will continue to have greater workplace choices as augmented reality and virtual reality technologies come into play. Some believe that virtual reality and augmented reality could be two of the most disruptive technologies on the horizon, as they will allow people to work with colleagues around the world in real time. Additionally, beacon technology will be applied to the office sector to help optimize the use of space and bring in greater personalization to maximize productivity. With beacon technology, individuals don’t have to manually sign-in to a specific space. Beacons will recognize when that person enters or exits a room, which will make it easier to measure and track when and how meeting rooms and offices are in use. Companies can then layer on space planning tools to create different scenarios for the best uses of their space. The next-generation workplace. The increasingly mobile and connected workforce is changing real estate requirements as it relates to how much space is needed, where facilities will be located, and how that space is configured, utilized and managed. The next-generation workplace likely will be built around workplace networks that will support this new mobile workplace complexity. Real estate leaders will need to provide technology-enabled workplace networks that will allow for greater agility and flexibility for both the organization and the employee, as well as long-term enterprise workplace effectiveness for the corporation. For example, a corporate workplace network might include a headquarters and multiple regional satellite offices, as well as remote co-working sites that allow people to work from home, the coffee shop, airport or their virtual reality headset. Over the next 10 to 20 years, potentially 40 to 60 percent of the workforce that now is doing transactional work could be replaced and augmented by artificial intelligence, workforce automation and smart-cognitive-thinking machines, said Peter Miscovich, managing director, Strategy + Innovation, JLL Consulting. There are a number of industries that will have to adapt to the shrinking human workforce as more and more occupations become automated and as artificial intelligence and the next generation of physical robotics continue to converge and evolve within the corporate workplace. The future of cities. Business, and the economy as a whole, is becoming increasingly urbanized. For half a century, many companies moved from city centers to suburban campuses in order to expand, control their environments and be closer to workers’ homes. In the past decade, we have seen a reversal to this trend as many of the same companies relocated to urban hubs for a mix of reasons. Among these is access to transit and the most advanced technologies, as well as the continuing desire for proximity to workers. What has changed in this last instance is that young professionals, as well as some empty nesters, have made lifestyle decisions to live in the city centers that had fallen out of favor with earlier generations. These developments have ramifications for cities moving forward – not just in the prevalence of good restaurants, but also related to infrastructure, governance and technology, as populations increase and change, influencing different choices for their neighborhoods. As workers become more flexible, it’s also incumbent on businesses to offer a premium office experience, both to retain employees and to convince them of the value of being present and interacting with others in the organization. While no one can predict the future with certainty, this much is clear: The future of corporate real estate won’t look anything like its past. We live in a world that is more globally connected than ever before, changing more rapidly than ever before and constantly disrupted by technological innovation. It is replete with both risks and opportunities.