Real Estate 2022: The New Rules of Engagement
From The Second Curve Thoughts on Reinventing Society Charles Handy
After nearly two years of Covid we are finally seeing the real estate market acquiesce to the revolution it has precipitated. No longer do we hear much talk of ‘returning to normal’ or of existing trends being ‘accelerated’. Where we do, these are ardently shot down.
Some nine years ago I started writing about the impact emerging technologies would have on the real estate industry, and in January 2019 I published ‘Space as a Service: The Trillion Dollar Hashtag’. The latter is now common parlance and the former can be seen all around us. What the pandemic has done is provide an environment where a slow morphing of behaviours has instead become an explosion of accepted beliefs. What seemed radical a few years ago IS the ‘new normal’. The future has arrived.
Which means we need a new future. We need a new set of beliefs, attitudes and ideas to aspire to. We need a new differentiation. When the market has swallowed the new, the new needs to be reinvented. How do you stand out when the way you think is the way everyone else thinks? When you reach the top right of one ’S’ curve, and innovative ideas have evolved from being customised to productised and finally commoditised, you need a new ’S’ curve. When the slowest late adopters have adopted your ideas you need new ones.
Which is where everyone in thrall to #FutureProofRealEstate finds themselves as we embark on the good ship 2022. In a Catch-22. Is it better to catch our breath, and repeat our vision to those at the back who took a while to come onboard, or should we push on to where, once again, we’ll be preaching to the early adopters?
Well, push on of course! This is 21st century real estate after all. Where good ideas take a decade to be accepted, but also where a decade is a project lifecycle. Where the market will slowly adopt best practice (after trying everything else) but where best practice will look entirely different a decade hence.
20th century real estate was different. Nothing much changed, beneath the veneer, because everyone needed what we had to sell, and our customers were actually our financial backers rather than the users of our products. But this century, especially from now onwards, our customers really are the users of our products and they no longer need us. Technology has enabled them to work without offices, and shop without shops. They can now do what they want, where they want. Our necessity, our mission, our challenge, is to make them want what we have to sell, now that they do not need it. And therein lies the next ’S’ curve.
What needs are we looking to fulfil? And how will we do so?
The late adopters have clicked that companies, and their employees, now want more flexibility, better quality space, and more of a collaborative environment. And, to be fair, most are now at least trying to provide these. But ….
…. the #RealEstateInnovators, starting out bottom left of the new ’S’ curve, have realised that what the leading companies (from startups to megacorps) want conforms to a new playbook, and tells a new story. These companies, and more particularly their employees, want a new way of living and working. They want to be productive, in fact they want to be hyper productive, but they also want to be happy and healthy. They want environments that enable them to be as happy, healthy and productive as they are capable of being. That vary according to their specific needs and ‘jobs to be done’. They want to spend time with their co-workers but time that is more fruitful than not being with them. They don’t want to commute for hours unless it is to do something that could not be done where they are. They want to be part of a community, but not one separate from their home life. They want access to all the best digital tools to enable them to live online/offline lives that coexist rather than conflict.
All of this needs to be wrapped up in a sense of purpose, a feeling that the effort is worthwhile, that they are making a difference. There is no effort too great if the purpose is great enough. But where the purpose does not exist any effort is too great.
And above perhaps all else, they know that 2030 is just 8 years, a mere 96 months away, and by then the world needs to have cut its carbon emissions by 50% to have any chance of becoming net zero by 2050. A year where many of those currently ‘ruling the world’ will not be alive but they most certainly will be. So it matters. A lot.
So, our new real estate rules of engagement must address all of this. Where do we fit in? Which parts of this can we impact? What skills, what people, what products, services and business models do we need to maximise our role in building this better built environment?
People spend 90% of their time indoors. In real estate. The form factor of that real estate does not matter. Providing the right real estate does.
Antony