In June of this year, Corenet Global published a report entitled, “The Future of Corporate Real Estate.” The report covered several major trends which would influence the corporate real estate function. Such trends as sustainability, advanced information technology, globalization, the “gig economy”, urban development, workplace changes, etc. would all have a major impact of the future of corporate real estate.
These trends will certainly have an impact, but I suspect there are unforeseen changes which may emerge that will affect the corporate real estate profession at its core. Here are five developments that may have an impact:
· CRE becomes the over-all contract manager of the enterprise. CRE deals extensively today with contracts, particularly lease contracts, construction, architectural services, etc. As lease and contract management software evolves, it is quite likely that CRE could become the central manager of all contracts including IT contracts. This will be a sea change for the profession and will have profound implications for organizational structure and responsibilities. It’s possible that CRE and IT could merge into a single asset management entity. There has been some evidence already; particularly with firms that are IT intensive, and see efficiencies in having a single point of control for all contracts.
· The entire CRE function becomes a candidate for wholesale outsourcing. Companies want to eliminate non-core functions wherever possible, and real estate and facility management have been the target for major outsourcing over the last two decades. Large global service firms like JonesLangLaSalle, and Cushman & Wakefield have the resources, coverage and technology to manage all aspects of the CRE function, and it’s perhaps only a matter of time when enterprise management adopts a total outsourcing model.
· Many of the CRE tasks will be automated, through the use of sophisticated systems, natural language recognition software, and various uses of robotics. Any task that is repetitive will be eligible for automation solutions. It’s conceivable that 70-80% of the leasing process will be accomplished by an automated process, so that the time and effort to conclude a commercial lease contract will be hours rather than today’s days and weeks. Consider how the mortgage process has been automated like “Rocket Mortgage” which offers “push button” mortgage services.
· The smartphone becomes the central tool for virtually all CRE activities and data management. The CRE executive will be able to retrieve data on virtually all aspects of the enterprise portfolio. And data input will a simple matter in most cases of scanning, or voice input.
· Security and Safety will surpass sustainability as a CRE priority. With the possibility of a major terrorist attack like 9-11, senior management will double the resilience of the enterprise, and much of the security upgrades will be the responsibility of CRE. This will be particularly the case in global markets such as mainland Europe and Asia.
These developments are admittedly speculative, but possible. CRE represents a major cost center, asset class, and influence on workforce recruitment and productivity via workplace strategies. One thing’s for certain: change will happen in ways unimaginable today. Planning for the unexpected is becoming a core competence for the wise CRE executive.