Commercial Real Estate (CRE) is fast-changing and struggling to keep up—or catch up—with technological advancements that are common in other industries. Comfy President, Lindsay Baker sat down (virtually) with Floored CEO, Dave Eisenberg to explore this topic. Here are some key takeaways and memorable moments from their conversation. To see the entire thing, check out our Comfy Presents video below.
CRE Is Taking Notes From Other Industries
“In the same way Amazon and ecommerce have disrupted traditional brick and mortar retailers, CRE folks now need to be more aware of new technologies and business models that represent any sort of threat to them. The savviest of Real Estate folks are really trying to understand [technology] so that they can determine if it’s going to allow them to do business better and avoid challenging outcomes in the future.”
Just as retail, transportation, and other industries have been disrupted by digital and on-demand technologies, commercial real estate is now experiencing a tech transformation of its own. SaaS companies like Comfy and Floored are fundamentally changing the CRE experience from soup to nuts, i.e. from planning and construction, to selling and leasing, and ultimately the user experience. In order to be successful, CRE needs to consider new and emerging classes of tech and ultimately find ways to leverage them to improve their business.
The Importance of Customer Experience
“There’s no better way to advance your business—or to destroy it—than by having an awesome NPS or a really poor one.”
NPS: Net Promoter Score is the willingness of customers to recommend a company's products or services to others. Though the primary purpose of the NPS methodology is to evaluate customer loyalty, the concept deserves consideration in CRE, as it speaks to the importance of ensuring a high-quality tenant and occupant experience to secure future business.
Technology: A Threat & Opportunity
“[There is] this threat/opportunity dichotomy that if your competitors are luring people to their buildings with a better digital experience than you’re providing, then you will be outcompeted.”
Commercial real estate used to be about one thing: location. But, in this conversation, Dave expands on how the entire real estate economy has become “much more fluid” in recent years. Building owners are now tasked with finding new ways to differentiate and add value to their properties by way of integrating smart building technology.
The Competition: Physical World vs. Digital World
“At times I’ve felt like there’s a missionary or an existential quality to [what we’re doing], because if you think about what happens if we don’t get this right, if we don’t make our spaces great, if we don’t make the real world great...then people will increasingly spend their time in the digital world.”
Finding ways to improve the “real world” and make it more appealing for occupants is critically important. Most of today's knowledge workers are no longer tethered to their desks, they can work anywhere with a wi-fi connection—from the office, home, coffee shops, or airports. Modern workplace designers have to create spaces that employees truly want to be in. Ones that can easily be transformed for a myriad of tasks, work styles, and staff capacity.
The Now: What’s Exciting
“What we’re able to do now with machines—sucking in huge quantities of data for AI or deep Machine Learning—is pretty amazing. I think when you take well-engineered products with high quality, clean data, you can get to some pretty amazing outcomes.”
Data is easy, insights are hard. Advances in sensor technology have given building managers the ability to collect tens of thousands of data points about how every aspect of their building is running...but that data can be overwhelming. It is also often siloed, making it difficult to uncover actionable insights. Machine learning (which is built into Comfy) can cut through the noise and uncover valuable usage trends ad patterns to help inform future decisions about the space.
What did we take away from this (awesome) conversation Dave?
Well, it boils down to this quote, “The strongest [RE companies] will be the ones who are leveraging technology the best in the long run...those are the folks who are going to outcompete others.”
Though CRE has historically been somewhat slow or resistant to adopt technology, market forces and cross-industry influence are now driving development and adoption of real estate tech faster than ever before. And while investing in new technology can seem risky at first, some of the most revolutionary building products, particularly Software as a Service, are allowing CRE to integrate new products with existing infrastructure—all with little to no upfront fees and minimal risk. Real estate is ripe for reform through tech and Comfy and Floored are excited to be leading the charge.