Is Technology Killing The Commercial Real Estate Market?
There are the oblivious signs of the Commercial Real Estate Crisis. Price structures on the decline, lack of overall demand, job losses or layoffs, oversupply, tight lending practices or no lending at all for that matter. But is there an underlying factor that may contribute just as much and is not readily recognized? I think it may be Technology
There are some estimates that 137 million workers world wide Tele-commute. Companies looking to cut cost naturally look at labor savings first. Telecommuting saves on office space, supplies electricity, water usage, parking, lost productivity, ie: long lunches and checking scores (Sigh… Da White Sox) on ESPN.
How many of us have bought any number of items via Amazon, E-bay or other retailer? I realize this may also be a generational thing; some still want to go into the actual store. I personally have purchased my last two cars online site unseen. One was shipped to me, the other I flew into the dealerships city. They picked me up at the airport providing a nice lunch. I calculated thousands of dollars of savings. Yes, I still own both cars and they are in excellent shape. What about supporting local business? Hey what about creating a relationship as a customer? What Loyalty? How many old dealership buildings are up for sale in your area?
How about the instant Mobile world we live in? Texting, Instant Messaging, Video, Voice Mail, Pictures etc. We can work any where at anytime we want. I receive and probably create some of the most interesting (to me) and important business related info when I am not in my office. Can you read any business related material and not see something that says Mobile is the next ..Whatever?
What about the growth of the internet in general? Think back five or ten years. Think of the applications and online programs that exist. In Commercial Real Estate we have a product called Zip Forms. If I have access to a computer or my phone for that matter, I can create and send an offer or document from anywhere at any time. How much easier is it to do anything for work and not be at work?
Do people really need someplace to work? People do need someplace to live at least most of us do. Will people miss out on the Culture or Synergistic environments that make a “Good to Great Company?” Do we all just meet at Starbuck’s or Panera in jeans, sandals and three day beard to rule the world?
Technology advances at what some times seems a daunting rate. I think that the commercial real estate market will adapt some of this fancy tech to not only survive but thrive. Not, I am afraid without some serious fallout. Slow to adapt,not recognizing the simple uses of technology,sticking our head in the sand and just hoping it will all go back to the way it was! We all know that mentality leads to obsolescence. What effects do you see technology having on your market? What are you doing to adapt? What do you see as the future of technology and the commercial real estate market?