Yardi Executive Summit Special Report: The State of CRE

Where is commercial real estate headed? At the recent Yardi Executive Summit in New York City, industry leaders analyzed shifts in patterns and shared need-to-know insights about different sectors, as well as technology and AI.

Office

We’re six years out from the pandemic, but don’t think we’re still not feeling the ramifications. Companies continue to offer remote or hybrid work. That said, many businesses are promoting a return to office. “A lot of predictions during Covid were doomsday,” Barak Sahar, CIO of Silverstein Properties, said. “But now we’re seeing a shift back to office.”

What’s new in office? According to Soheil Pourhashemi, EVP of Brookfield Properties, to draw workers back, companies are highlighting the tenant experience, with a push for amenities and a focus on branding. Pourhashemi recommended building events and even appointing ambassadors from the building. He also suggested creating an app for the building. Sahar also agreed with this. “The tenant experience will be our main differentiator,” he added.

Coworking

The coworking industry is still going strong, even with the push to return to office. But gone are the days of ping pong tables at coworking spaces. John Santora, CEO of WeWork, explained that the company is pivoting to leasing space to corporations.

Santora also emphasized that companies should focus on flex space in offices, which can be used as coworking offices.

“If you had long-term leases, you’re trying to sublet them,” he said, explaining that “smart heads of real estate” are putting aside 25 percent of their property space for flex space so that they can avoid having unoccupied office space.

Technology

Tech has continued to take a centralized role in commercial real estate. That said, the experts warned not to take over every aspect of the job. “We try not to be central IT,” Sahar said. “We try to focus on what matters.”

And, of course, AI is on everyone’s minds. But figuring out how to use it to make tasks easier, rather than using it for the sake of using it, can be an issue.

“The proliferation of tools is very distracting,” Justin Segal, president of Boxer Property, said. “I find that to just be noise.”

The key is to find areas where it’ll make your teams’ lives easier. Pamela Larin, CFO of Arden Logistics Parks, mentioned that her company is trying to use it in small ways to help with property management, and she makes sure her team has time for people to learn and use it efficiently.

In terms of getting their teams to adapt to the new technology, real estate leaders are finding success by making the process democratic and allowing buy-in from their teams to figure out the best usage cases.

“We allow everyone in our company to utilize AI training,” Sahar said.

Other ways to get the team invested, according to Sahar, can include nominating AI champions in each department, as well as gamifying it to make the process more fun.

But while it’s important to get to get buy-in, it’s equally important to realize that not everyone will be willing—or able—to participate.

“We do need to recognize not everyone is equipped to use AI now,” Sahar admitted. “There’s always going to be people who are hesitant.”