Insights from Ben Humphrey at Cushman Wakefield: COVID-19 and the shifts in the CRE mindset
The global pandemic has dramatically shifted the way we view commercial spaces, how they function, and how they’re managed. Companies like Cushman Wakefield, a commercial real estate services firm, are playing a key role in keeping health and safety top of mind. I recently met with Cushman Wakefield's Digital Buildings Practice Lead Ben Humphrey to learn more about the firm's perspective on the state of the CRE industry as well as the role that technology plays in safely returning to the office and how it will drive future value.
Cushman Wakefield is a large commercial real estate services firm that provides, among other things, brokerage, valuation and appraisal, and property management services for both commercial landlords and corporate occupiers. I’m based in Palo Alto, California, and I’m a member of C&W’s Digital Buildings Practice. My primary duties include leading our team’s vendor management activities, as well as managing and delivering in-depth evaluations of building and workplace technology categories.
When it comes to technology delivery in our managed buildings, it’s helpful to recognize C&W’s partner-first strategy. By and large, C&W does not build its own technology solutions. Instead, we partner with best-in-class solutions across various technology categories. So in many ways, our team acts as a gateway for building and workplace technology vendors to enter C&W’s ecosystem of recommended client-facing solutions. Our team evaluates solutions’ capabilities based on programmatic use cases and requirements identified by C&W’s various service lines. Then, through advisory sessions with clients, our team makes technology and process recommendations based upon our client buildings’ unique set of goals and challenges.
Tech trends for commercial spaces, circa 2019
From a technology perspective, the pandemic hasn’t changed many of the principles and best practices we’ve been recommending and implementing over the past several years. These include programs built around improving operational efficiency and overall occupant comfort:
Internet of Things (IoT) – Smart devices designed to analyze information to intuitively adjust temperatures, ventilation, lighting, air quality, elevator wait times, and more
Building data – Information collected from building systems to inform capacity and traffic guidelines, guide strategic plans, and fuel the work of IoT connected devices
Automated sequencing – IoT devices and data used to automate modes and sequences of building systems (building access, HVAC set points and schedules, etc.)
The hard shift in 2020
Today, with the pandemic influencing the way we think about commercial spaces, there’s a new sense of urgency around implementing technologies that analyze data, automate processes, and redesign key operations. We’ve seen a definite uptick in inquiries about retrofitting buildings to raise the bar on health, safety, and efficiency.
From our experience, venture capital has never been hesitant to focus investment on real estate technology start-ups. Paradoxically, building owners and real estate managers have been slow to invest and implement building technology. Going into 2021, our group is interested to see if the initial inquiries during COVID materialize into legitimate demand.
What comes next for real estate management?
Bringing real estate management fully into the post-COVID reality won’t be easy. Everything right now is a moving target, and if someone figures out the silver bullet, they’ll be well-positioned to make a fortune.
We think reimagining floor plans could play an important role in maintaining healthy commercial spaces moving forward (both in a safety sense, and also from an asset/investment perspective). We foresee a few options:
Static space: Keep the same footprint, but commit to having fewer employees onsite
Expanded space: Growing the space to achieve a bigger footprint and accommodate all workers onsite
Staggered schedules: Rotate groups of workers in and out between in-office and telework
Hybrid workforce: Some employees work onsite full-time, while others are full-time remote workers
As more people return to the workplace, building owners will need to work with their tenants and property management professionals to execute the right plan for their buildings.
How technology will frame the future
As I mentioned earlier, one of the focuses of our team at C&W is evaluating building technology offerings. Our recommendations to clients are always delivered with a brand-agnostic, outcome-first mindset. This ensures that we find the best-in-class solutions for each client without any bias or influence attached to a specific vendor or solution.
But most importantly, we try to not recommend technology for technology’s sake. We understand successfully deploying technology requires well-defined processes. We outline our methodology as follows:
The strategic “why” - Focus on goals, outcomes, and capabilities
The tactical “how” - Focus on use cases and data driven approach throughout the ecosystem
The operational “what” - Digging into specific solutions, platforms, and system/integration points
Maintaining investments, creating value
The pandemic will drive a lot of much-needed improvements in commercial real estate. Until now, many building owners have been complacent, viewing their spaces as static assets rather than active investments. When their perception shifts from assets to investments, there will be a much bigger business imperative to maintain, upgrade, and retrofit buildings in order to keep their value. Configured using data insights from technology innovators, commercial spaces of the future will be more agile than ever, delivering on mandates for health and safety for workers, and on tenant retention rates for building owners.