Is the real estate industry really about real estate?

May 2015

Yes I know; you’ve heard it all before. The office is dead. Yawn. They’ve been saying that for twenty years but here we are in 2015 with office demand on a roll.

Well sorry, but Ernest Hemingway had it right. “How did you go bankrupt?” Two ways. Gradually, then suddenly” he wrote in The Sun Also Rises. And the office market will be hit in just the same way.

Over the next 5-10 years perhaps 40-60% of companies will find they no longer have a need for offices as we use them now.

We tend to think of big companies when we think of offices but the reality is, most businesses are small. The City of London issued a report at MIPIM showing that 98.6% are SME’s, and 80% have fewer than 10 employees. There are just 205 firms in the City with 250 or more employees. 72% of occupied units are less than 10,000 sq ft.

Now factor in the rise of ‘contingent’ workers (part time, contractors, self employed) whom in the US are expected to be 40% of the workforce by 2020.

Now add technological change to the mix and bang, it hits you like a brick; what is the point of a conventional office for this type of worker?

They don’t need an office to access their computer. Their works files are no longer in the office. They likely don’t have a boss who cannot function unless they are in line of sight. They don’t have big company bureaucratic meetings. And most of the people they work with are ‘somewhere else’.

So why on earth do they need the cost of an office and the daily inconvenience of getting there?

The answer lies in what it is that we humans can bring to the party, when the party has been automated and robots are everywhere.

Make no mistake, everything that can be automated will be. If you can codify it, you can automate it. And will.

Which brings me to The Imaginarium, which is what will replace the office for many. This will be a place, a space, that allows, forces even, humans to do what computers can’t. And that is: to define, design and refine the world around us. To imagine, inspire, empathise, innovate, be ingenious and creative.

The real estate industry is moving beyond real estate. We do need to congregate, we don’t need offices. It’s ONLY as an Imaginarium that the office retains value. That providing the toolset, physical and virtual, to enable people to unlock their creativity is their purpose.

People can and will work anywhere. And for much of the time they can, in fact need to, do this alone, in peace, and at maximum concentration. But creativity, without which your future is bleak, requires regular doses of collaboration with other creative people, in spaces that inspire.

We all need inspiration. We no longer need an office. The real estate industry needs a new product.


This first appeared in Estates Gazette on the 9th May 2015