The wonderful world of commercial real estate…Musings from the road

One of the best parts about my job is that I get to travel around the world meeting with and speaking to the smartest people in real estate. Rather than keep all the goodness I learn bottled up, through my own lens, I will share some of my observations and thoughts. This are my personal views.

· The music will stop. The question is who will be left without a chair. But for now, the party rages on. Investors and developers are highly focused on how much they can do in the remainder of this cycle. The older guard knows the music is slowing and are keeping a keen on the chair’s that are disappearing, while the newer (i.e. younger) cohort are charging full steam ahead.

· LP’s and allocators seem to be focused on consolidating investments with fewer, high quality managers where they can have more control and in many instances invest directly. I remain amazed at the gap between those with money and who wants deals and those with deals and who want money. If you have an established relationship you’re in, if not, the matchmaking is harder that it should be. This is an opportunity that many are trying to solve for, yet I am not sure anyone has made a lot of headway.

· Corporations, now more than ever, are interested in creating authentic experiences to attract and retain employees. From new urban and suburban campuses, to creative workspace to co-working companies, that old, staid office building will no longer cut it. If you want to grow, you need to know what your employees want. Flexibility, creativity and customization are king. It doesn’t need to cost a fortune nor do you need to commit to long leases any longer.

· Big Data is the next frontier. Our industry has so much data, and we all use and aggregate it differently. Companies and software focused on identifying, aggregating and analyzing big data (both proprietary and third party) will get a significant leg up on the competition. Keep in mind, there are same great companies already doing this, just not for the real estate industry.

· Corporate Venture for real estate companies is back. In the past few months, I have been in touch with several newly launched corporate venture firms (i.e. making VC investments into technology companies) focused on returns both through their venture investments and by getting a competitive edge by being early adopters of new technology they can roll out across their organizations. This is either a new wave of VC funding or a signal the market is bubbling up. Only time will tell.

What are you seeing and hearing? I’d love to hear. @bsedloff or Brandon.sedloff@uli.org. Leave your comments below.

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