consumerization

I’ve got some real estate. Here in my bag.

by Paul Carder on August 22, 2017

by @paulcarder

“America”, (Simon & Garfunkel, 1968)

Let us be lovers,
We’ll marry our fortunes together.
I’ve got some real estate
Here in my bag.

Whatever meaning you may attribute to this beautiful song, to me it reflects a very human feeling of searching, of travelling….of movement even. The need to ‘get away’, to explore, and find new things. Perhaps, to find meaning.

[without getting too political, “to look for America” will be a quest troubling many people right now! One cannot help think Paul Simon will feel more empty and aching now even than in the song.]

Who needs real estate? Who needs more than a bag, a pack of cigarettes, one of Mrs. Wagner’s pies, to walk off and look for America? …a bottle of water perhaps. And obviously a smartphone.

Imagine the words of the song now, almost 50 years later:

“Kathy”, I said,
As we boarded a Greyhound in Pittsburgh,
have you got a good WiFi signal?

The cashless, wireless kid on the Greyhound bus today, off “to look for America” has very different real estate in his or her bag. You will have seen the graffiti’d amendment to Maslow’s hierarchy of needs, with WiFi added as the new basic need above all others…it feels like that sometimes.

Providing she has money in the bank, somewhere in the world, and a WiFi signal on the smartphone, she can acquire all manner of ‘real estate’ …fleetingly, temporarily, for a few hours or a few days.

Counting the cars
On the New Jersey Turnpike

The contemporary young Simon, and his Kathy, have no need of a car. They can ‘buy’ an Uber for a few minutes when they need it. Or hire a car for a few days, to drive up the coast perhaps. They can ‘buy’ an AirBnB room for a night, or a week. Or a whole house, for all their friends to meet. Real estate, in the bag, on the iPhone.

Now they want to work like this too…..

And why not? If you live like this, why not work like this too? It is the sharing economy, the experience economy. Owning things is for your parents. Smart people are now buying memories, not ‘stuff’.

The technologists are busy creating platforms and Apps for us to book anything, almost anytime, and almost anywhere. Their business developers are connecting all manner of assets with their Apps …putting the customer together with whatever they need, when they need it.

Early pioneers of corporate real estate used to say most organizations are ‘in real estate’ by default. Not any longer.

Every year, there is less need for any organization to be ‘in real estate’ in any way at all.

Corporate and commercial real estate operators may all be working for ‘booking platforms’ before much longer. A few organizations will still build their own HQ, and hold a few leases on ‘core’ parts of the portfolio. But everything else will surely be ‘bookable’.

Every Monday morning will be a little like that young couple on the Greyhound bus; a journey, a new day, a new place (or favourite old place). Somewhere you want to go, with people you want to be with. If you are a knowledge-worker, of course. If your work is talking, creating, writing, and connected to a device.

I hope. And we all need that right now.

{ 0 comments }

I come from the far west of England; the rugby-loving county of Cornwall. Because I was large, I had to play, but was never much good. My second-row buddy went on to play for Scotland and the British Lions, but I took up music lessons 🙂 Anyway, we had a saying when Cornwall reached the County finals, “last one over the Tamar Bridge, turn out the lights”, as busloads of Cornish traveled to support the county side!

If you are wondering what relevance this has to anything you may usually expect to read here, it just reminded me of the current direction of travel for office occupiers. i.e., out of the office – like we sped out of the county.

There was, in fact, far more drawing us back to our beloved county of Cornwall than there is for most daily occupants of offices. Aside from the Googles and Facebooks of our occupier friends, and some of the large employers that spend serious money on great workplaces, for many others the office is a dull place. You only have to see the hoards of people walking from their soulless business park to the local supermarket to buy today’s “Meal Deal” to understand how dull life can be for those unfortunate people.

No wonder, therefore, that cool cafes and co-working hubs are busier than ever. The legions of freelancers and entrepreneurs are being joined by corporate employees who just prefer somewhere better to work. I was talking to Neardesk last week, and they are experiencing ever-rising demand from people wanting to work closer to home. Not at home: that doesn’t work for everyone (many of us just want the separation of work and home life; or have too much home life going on to concentrate). But near to home, with a short commute, good coffee, and interesting people who don’t really care if you sit on the sofa and read the newspaper for a while. Nobody is watching – they’re amongst friends (or total strangers – either way, no bosses hovering).

If you don’t have to be at the office, why would you go? It may be in a great location, and you may want to go for lunch with the girl (or guy) from accounts. But, otherwise, why not wade through your emails at a desk closer to home, and actually get home before the kids are so tired that they just want to go to sleep. Or fit in that round of golf, now that the summer evenings are here? (not for me that one – golf is a good walk spoiled – certainly for my dog!). Or take some time cooking, instead of buying a pizza at 9pm. Or…or…whatever. Take some time back.

There will always be offices. But, we just don’t need to go there every day. And agile working means desk-sharing ratios can rise, so the expanding company does not necessarily need to take on more office space. Some call it space-less growth.

So, every 4th floor you occupy could be released, if more people stayed near home one or two days a week, and let someone else use their desk on those days. Or, every 4th office building – if you occupy a portfolio within a commuting catchment area.

If you manage the 4th office, switch off the lease on your way out….

Paul

@paulcarder

@occupiers

{ 1 comment }

Imagine that a child was given school homework, to make a PowerPoint slide of Mum’s journey to and from work. It may look like this: https://app.box.com/s/w19otbry4gt53m3zfs3q – hopefully not too much better, as I’ve just done that with basic clipart!

Now, imagine how much of that picture might make little sense to a school-child in 2040 (or, thereabouts). Or at least, I truly hope that it would not be a ‘normal’ daily journey. It might make a fairly interesting educational boardgame actually? Roll a pair of sixes, to work from home. Dash it, I rolled two ones – have to catch that crowded commuter train again….any entrepreneurs out there, call me!

Transport infrastructure is a political hot-potato, probably in any city or densely populated region. But, one has to ask the question, is infrastructure the right way to spend our way to a better future? Politicians seem to think so. Look at our ‘boardgame’ though, and it would be immediately obvious to a child that there are many options other than travelling the winding route all the way to the corporate office.

My regional partner in Australia, Martin Leitch, was telling me about his home city of Melbourne on our regular call last week. Aparently it is currently expanding faster than Sydney. This is creating a serious issue with travel into the CBD, and the politicians (like everywhere) seem to believe that throwing money at transport infrastructure is the solution. So, we got discussing whether they should redefine infrastructure as a wider support for working in a different way. That infrastructure should include places, spaces and technology which allows people to do their work without travelling too far from where they live. Just like our boardgame picture – walking to a ‘desk’ in a coffee shop, or using the beleaguered Main Street which has been starved of customers since the advent of out-of-town shopping centres. Or perhaps even travelling to the railway hub, but not boarding any train! Why not – lots of parking and buses, so why not have a ‘work-hub’ at every rail hub?

It is all about city, urban, suburban, and rural planning. Land economics – what is the best economic use of land. The cost to live in the centre of cities, even if one wanted to, is always going to be too high for most families. The cool CBD is for the young professionals, singles, affluent couples without children, and a few ’empty-nesters’. Unless you are very wealthy, the rest of us need to commute to an office from various distances away from the centre. That daily grind seems to get more expensive, and stressful (due to many factors – overcrowding, delays, etc.).

It is also not sustainable, in the human or environmental sense. Carbon has had a price now for many years, due to schemes such as the EU Emissions Trading Scheme. And that carbon ‘price’ will only rise over time. Add that to the actual ‘real’ fuel cost of travel, commuting will become a balance between necessity and affordability. It will be reduced, and ‘rationed’ in effect, to the one or two days a week that a person actually needs to be ‘co-located’ with the rest of their team in order to stay sufficiently ‘in touch’. But, commuting five days a week over long distances will surely be deemed wasteful, and environmentally damaging – not to mention costly and inefficient.

Then, there are the social pressures on families, especially – childcare, and elderly or carer responsibilities. It would be far easier, for many working people who also have carer responsibilities, to be able to get home in a shorter amount of time. There is no time to expand on that here, but there is extensive literature available on flexible working, and many governments are supporting with legislation.

In our little real estate world, who should be interested in all this? Real estate economists and developers, for sure – what they develop, and specifically where, needs to change. There will not be the demand for tertiary office space, especially older and inflexible property stock. Occupiers will need less space in the corporate ‘head office’, but what they do need will be good quality, highly flexible, in attractive locations where people can easily access transport links.

They will invest in fewer, smaller, high-spec ‘hubs’ in key cities – and they can spend a little of what they have saved on attracting and retaining staff, by giving them some form of flexible workspace ‘clubcard’ to access a facility closer to home.

Aha, the lamp lights – what will these ‘local centres’ look like? Well they may look like the existing small town Main Streets, retail centres, and rail hubs as mentioned above. Most of the buildings that we will be using in 2040, of course, already exist – we only add a little to the ‘stock’ every year. But those existing buildings can be redesigned, and refurbished of course (developers eyes light up too, now). Property development opportunities. Also the creation of a new service economy, aimed at making peoples’ working day more effective – and attracting them to their ‘local centre’. It will have to be high quality though – if you have worked in central city locations for years, and now you are contemplating working 2-3 days a week in your local hub, it can’t feel like second-class experience. But, if we get the quality of facility and experience right, people will come – they will not mourn the loss of their daily commute into the corporate office. After all, they will still commute once or twice a week, to stay in touch, socialize, meet clients, or for many other reasons. And if commuting is not a daily grind, it may become a welcome trip to see friends. Absence makes the heart grow fonder!

So, perhaps the question should have been, not ‘what’ was, but ‘why’ did we commute Grandma? That one, I’ll leave to you to ponder!

{ 2 comments }

In November, I wrote about Place-as-a-Service (PaaS), based on the now common term SaaS (Software as a Service): http://occupiersjournal.com/place-as-a-service-paas-time-to-join-the-connected-world/

The article was supply-side focused. I was considering the changes, already being seen in a small way, in how workplace accommodation is provided. Regus is the most well-known, globally; but there are many new entrants – in fact, who really knows how many?

Looked at from the user perspective, is this simply the consumerization of workplace accommodation? In a similar way that cloud-based IT and personal devices have been picked up by users? Not provided by the corporation (usually, the employer), but paid for by the consumer?

Where is this going? How far will it go? Of course, we do not know.

Will flexible accommodation, on flexible terms, reach a plateau? That seems unlikely.

Will agile working become universally accepted as simply the most efficient and effective way of working? That seems likely.

When people can truly work almost anywhere, at their choice, will they choose to commute to the corporate workplace? That remains to be seen. There are many ‘push/pull’ factors at play here – the need to belong to the wider ‘group’, recognition, immersion in corporate culture, versus time and cost to the individual.

How will corporations (employers) react? Or, indeed, plan for this eventuality? IT had its BYOD (Bring Your Own Device), and that spread rapidly. Will our sector have its own BYOD? Buy-Your-Own-Desk? And charge its use back to the company? A Regus account will do that already; how many others will follow?

So many questions!….what are yours?

{ 0 comments }

Software-as-a-Service (SaaS) is now well known, and ubiquitous. Why buy, and maintain, software tools when they can be ‘hired’ in minutes online?

So, why do we ‘buy’ Places? Or lease, which, under today’s accounting rules, looks much the same on the balance sheet.

Place-as-a-Service (PaaS) has been, and will continue to be, slow to catch up with other ‘services’. Because, investors and their managers are quite happy with the status quo. They sell, or lease, the real estate – and the occupier (tenant, or owner) must provide the rest. The interior design, the fit-out, and the ongoing workplace alignment and facilities management.

PaaS is not new – companies like Regus have been built on the principle. But, they only deliver Place-as-a-Service on the fringes of the typical corporate portfolio. Why?

Any size of organization, using predominantly ‘office-type’ space, could potentially buy PaaS for their entire space portfolio.

One monthly invoice…..

Reducing the in-house occupier team to (1) someone to manage the PaaS contract and administration, (2) a Director of Place, and perhaps a few ‘relationship managers’ with expert knowledge of the core business units, and ability to negotiate and ensure that they get what they need from PaaS.

Everything else sits under the PaaS provider. Everything.

And everyone on the supply-side works for the PaaS provider. If they have deep pockets, they do their own real estate development, and management. Where do the ‘landlords’ fit in? They don’t. All the agents, surveyors, property managers? They work for the PaaS provider.

Service charge management? Doesn’t exist. It is all part of the PaaS single invoice.

Who gains? the CUSTOMER, at long last! The businesses, government organisations, charities, and all the other ‘customers’ who have long had a duff deal from uncaring Landlords, and a real estate industry and professions focused on the property barons and money-people.

Watch Regus! But also, who else will enter this market? There will need to be several, for a competitive economy. Will a rich and talented entrepreneur like Richard Branson enter this space (excuse the pun), with his focus on the customer first?

Or maybe the Duke of Westminster (London), who owns 300 acres of some of the most expensive real estate in the world, will become a PaaS provider? Grosvenor has Serviced Offices already. And very deep pockets, from family wealth going back to the 17th Century.

CORE PaaS : will be those spaces needed by organisations over longer time-frames (like HQ space)

FRINGE PaaS : will be spaces for people to work around their territory, and closer to home – knock on effect being improved sustainability, and choice of workspace for employees and contractors.

Watch PaaS……it is time to change the world of ‘places’ for organisations and users. Who will drive this forward? We wait to see…..

{ 2 comments }