Finding new ways to transact business as well as socialize during the time of quarantine is a prime concern throughout the country, and technology is the prime mover. From business teleconferencing to teaching, enjoying concerts and visiting museums to furnishing a new home or perfecting cooking skills, creative new paths are being forged. And new technology is the driver – across all industries. That's part of the good news.
It's as easy to attend a concert in Rome or visit a historical site in Bangkok as it once was to go to the local library. It's all because of those ubiquitous screens.
Today, when the news is all about keeping your distance, it's more than a little encouraging that the technology exists to keep us all together, both on a personal level and in the business world.
The Ties That Bind
What is certain is that the dynamic of social and business interaction has been irrevocably altered, and it will be some time before it's all sorted out and the world returns to a sense of what is normal and appropriate.
What do the current times signal for the future of business in the Twin Cities? Is the traditional office on the way out? Some would say that has been the direction for years now. Others point to a new world of innovation and long-distance collaboration.
What is the future of Minnesota commercial real estate in the short term, and what are we looking at over the long term? More importantly, perhaps, what are the ramifications for businesses that have "face-to-face" needs?
It was almost one year ago that the real estate magazine Connected published an article that identified four top areas for CRE investment. Not surprisingly, they were all tech-related.
The Internet of Things (IoT)
Effective monitoring ability of buildings and the people who use them is the domain of internet devices. Based on information provided by research firm Memoori, IoT devices with a value of 75 billion will be in place by 2021 to monitor human and building operations across the breadth of the commercial sector. The data collected from offices, retail spaces, warehouses, hotels and hospitals will be invaluable in determining and planning for space needs and efficient operation in the future.
Headsets may be as important as masks and six-foot separation around the board table. Luckily, the potential offered by virtual reality (VR) and augmented reality (AR) solutions is “virtually” unlimited. We have already seen what they offer in terms of benefit for pre-sales, architectural design, space planning and the ability to bring a group of geographically separated colleagues together. In some ways, the future is already here, and the potential exists for future expansion and utilization of both VR and AR capabilities across the spectrum of commercial real estate sales, leasing and management.
Automated Workflow Solutions
Coordinated end-to-end solutions across the range of operations in the commercial segment is another necessity addressed through the development of automated processes. Management and coordination of a continuum of tasks and responsibilities will simplify complex commercial real estate dealings. When efficiency is the end goal, innovative solutions are the answer.
Employee and Workspace Experience
Finally, the broad topic of workspace experience rates high priority among CRE directors. Companies that recruit, hire and train key employees focus on meeting diverse needs, providing the best possible environment for the work force. From offices to specialized commercial space—including modern warehouses, medical facilities and the hospitality industry—the needs have never been greater or more diverse. But again, the technology has never before been as all-encompassing.
Responses to a survey conducted among a group of 561 global CRE directors were used to identify these top areas of concern. At the time, statistics pointed to a dramatic spread in expected profit, 31% compared to 19%, between early adopters of advanced technology and companies that employed a more cautious approach.
Moving Forward from the Pandemic
Forecasters were already predicting new ways that technology would shape the future. Those thoughts are even more pertinent now, but if new tech adoption is just showing up on the horizon of your concerns, you're now behind the curve.
It's one thing to make the shift to supportive technology, i.e., teleconferencing, email and voice messaging, on a temporary basis, but something else entirely to wholly embrace technology on a large scale. It remains to be seen if there will be a lasting redirection toward remote employment, but there is little doubt that there will be more reliance on artificial intelligence, virtual reality and computer modeling.
Advances and problems in other areas will further impact business: robotics, energy, sustainability, financial concerns, the job market, and government mandates.
What changes are necessary? What new directions will be disruptive? How much disruption will be tolerable? The questions of this new age seem to far outdistance the answers.
The Need for Industrial Space
In early March, according to Matt Rauenhorst, Opus Development Company's executive vice president and general manager, the prospect was still good for modern industrial space in the Twin Cities market.
With what he termed strong occupancy levels at that time, he believes that the challenge, post recovery, might be finding that industrial space to efficiently serve the distribution sector. He is confident that the Twin Cities will rebound, and that local “protections” are in place against an economic downspin. He cites, as have others over the course of the past year, the “brain power” available in the Twin Cities, the strong employment numbers, and the history of “measured growth” and a conservative approach to development.
Senior Managing Director Brian Netz, in the Minneapolis office of Newmark Knight Frank, also weighs in on the side of optimism, even in the midst of current uncertainty. He points to the varied economy of the Twin Cities as its primary hedge against bad times. “We are not reliant on one or two industries to drive our growth and activity,” he notes. “We are spread out enough so that when activity rises and falls in some industries, it doesn't send our entire economy into a downspin.”
That may indeed, be the thought to hold onto, in the days and weeks ahead. That, keeping your distance, and working together through technology.