Gail Kalinoski’s piece in Commercial Property Executive focuses on a big adaptive reuse story in Chicago. At 317,000 SF, the Chicago Sun-Times newspaper built for the future, but not the future of newsprint. Its printing presses fell largely silent and its need for logistics fell away as demand for daily news printed on paper was obliterated by the world wide web.
The continued revolution in distance working / telecommuting is fundamentally altering commercial real estate’s traditional office space measures of economic health. Once, vacancy rates and square footage outlays per employee were widely assumed key indicators of performance. Today, the economic power of the office worker is being spread out around the globe. This is contributing to stubborn vacancy rates, but it is also driving explosive demand for data centers.
Staying informed about the operations space needs of technology companies gets harder as technology evolves. Let’s take a look at a recent announcement for a recognized tech brand and try to process what it means in terms of commercial real estate and data center space.
Netflix is a movie rental and media powerhouse that has, over the past few years, moved the bulk of its business from DVD rentals-by-mail to streaming movies across the internet on a subscription basis. In an announcement today, the company said it was going to “gut” its data center and shift its operations to “the cloud”.
If there’s one common thread to the huge number of different technological changes roiling commercial real estate, it’s standardization. Standardization looks for ways to treat different things in the same way, and build efficiencies as a result. Standardization is behind all the software tools we use and increasingly depend upon – the web, your desktop, your phone, all need to run the application you need. The listings data you depend upon has to meet certain standardized criteria or it won’t publish. In finance, standardization of debt instruments gives us CMBS and other tools to increase credit and liquidity (sometimes too much!)