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It’s 1985. 30 Years Ago and Back To The Future.

Daft Punk DeLorean Shoot

Some of us remember. Some of us were babies. Some of us can only imagine.

1985. 30 years ago.

Let’s go back. Back to a simpler time.

The original Macintosh Computer was shiny and new. The Sony Discman D-50 played all the music you could fit on a CD and if you were on the tech cutting edge you wore a Tissot F1 Electronic LCD Watch.

Today as you sit and read this I am typing and creating this article on a Macbook Pro streaming Pandora and not wearing any watch at all because who in the hell does any more. Do you really need an Apple Watch?

(Eerily Similar Yet Not?)

So, I dug back through the interwebs and did some research on commercial real estate.

If you were a major player of any consequence you read white papers and market intelligence.

You ran Excel spreadsheets input data and did calculations all on the behemoth Microsoft Windows software.

You digested every word written by Michael Porter and Peter Drucker.

Also being the player that you were you had a “Global Perspective and Local Insight” strategy for your commercial real estate assets.

What follows are nine clear concise definitions of that very strategy from 1985.

1. Astute players can potentially enhance their competitive edge by reducing costs through improved processes and leveraging technology to improve operations.

2. An effective international diversification strategy, including joint ventures with local partners, may help U.S. Commercial Real Estate players differentiate themselves.

3. Commercial Real Estate players can help spur core revenue growth and regain bargaining power through investments in existing properties to suit tenants’ changing needs, especially with regard to technology and workforce mobility.

4. Chief Executive Officers should consider challenging current practices, identifying an optimal finance model, and evaluating the appropriate mix of technology to achieve their goals. Some forward-looking companies are challenging the status quo and asking if their finance operating model reflects innovative practices.

5. Given the regulatory uncertainty, Chief Executive Officers at Commercial Real Estate companies should use this time to assess the potential impact to their business.

6. Given fewer concerns around deleveraging their balance sheets, Commercial Real Estate companies may opt for more competitive deal structures. Players with healthy balance sheets may decide to use this opportunity to tap the non-prime markets and move up the risk curve.

7. Investors may need to craft an effective exit strategy for legacy investments to derive maximum gains. REITs should also evaluate new alternatives for growth, such as substantial updating and repositioning of existing properties to meet evolving tenant needs, M&A or select international expansion.

8. Commercial Real Estate investors with healthy balance sheets may want to look at the value offered by properties in non-prime markets when designing their portfolio and acquisition plans. Over-leveraged companies can consider increased use of joint ventures with institutional investors looking to increase their real estate allocations.

9. Companies need to re-strategize and refresh their talent brand to attract the new generation and strengthen their competitiveness. In parallel, Commercial Real Estate companies should rethink their entire talent chain approach, considering broader functional skills, leadership and personality attributes, along with academic qualifications.

So, yes there it is straight out of 1985.

It seems pretty solid and generic compared to todays global dynamic diverse and connected commercial real estate market.

And you say, “so Duke you have me nodding off here get to the point.”

Look at the nine strategies from 1985 again.

Guess what.

They were ripped (copy and pasted mostly) from the pages of a “prominent” financial publication three days ago.

Three (3) days ago. 2015!

30 years later and this is what you I and the public (as in your clients/users) are being fed.

Up until 10 seconds ago it was all 1985 and you flat-out bought it.

Right now there is some guy (white old guy) sitting somewhere reading the nine points of strategy like it’s the Holy Grail of all commercial real estate for 2015.

There is also some guy (white old guy) who wrote the article connected to a school with ivy hanging off of it working for a company with several letters of the alphabet in the name such as ABCD, KKRLJ, DUMAS, STUPD, IDOT, DOUCHE, SUKR.

He sits at home pulls up the article online and looks at his picture all smiling blue suit white shirt and tie. He has twelve letters of designation next to his name and oh god yes the school he went to. You can almost see the tears in his eyes as he reads his bio back to himself.

So, nothing has changed——in 30 years——nothing——–in 30 years?

Think for a minute. You live in the REAL world and you actually pay attention to it.

There are some amazing and important issues that you and your clients should be paying attention to.

1. Mobility. Wait, let’s change that to Radical Mobility. (Yes, Elie I am paying attention.)

Radical Mobility is making and will make us more interconnected and that is because of Interoperability.

Interoperability: is the ability of a system or product to work with other systems and products without special effort on the part of the user/customer/client.

The ability to be connected anywhere any time anyplace. What is the definition of work?

What then is the definition of commercial real estate?

2. The Sharing Economy. Collaborative consumption. Sharing space. Sharing goods. Sharing services. Pay attention to the last one. Clients/users sharing your services. Hmmm. Look at the financial services market. What is happening to them? It’s going to happen to you too.

How will this redefine the marketplace?

What I meant to say was how does this redefine ANY and EVERY marketplace.

3. Things That Think: Any device any data any format. Sensors, building data, mobile computing, human interaction with computing, GPS, interactive real-time data.

How about AI or Artificial Intelligence or Machine Learning?

Machine Learning= Algorithms.

Algorithms: a process or set of rules to be followed in calculations or other problem-solving operations, especially by a computer.

You are like “yeah I have heard of those things before somewhere.”

A computer maybe yours very soon——— can and will think——–on its own.

So, it’s 2015.

It’s the real world and you are living and breathing in it.

Are you buying the old white guys bullshit?

Do you think your clients/users are too?

It’s being shoved right down your throat.

Every day.

Every fucking day.

It’s 1985. 30 Years Ago and Back To The Future.

 

+1 If I see one more fucking Excel spreadsheet…….

+1+1 Mention best practices or strategic basics and kill two kittens a puppy and your college mascot.

 

 

 

 

 

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  • gwhoffmeister

    Brilliant! Well said Duke. The game is certainly changing right before our own eyes.

  • gwhoffmeister

    Duke, what did you mean by clients/users sharing your services?

    • Duke Long

      Greg,
      I will write an article and explain.

  • BCCommercial

    Putting in My Request: Next blog post – Sharing Services in #CRE

    • Duke Long

      Hmmmn you’re on!