The COO of one of the UK’s largest corporations told me recently: “The problem with our real estate function is that it has too many real estate people.”
The point, albeit deliberately provocative, really resonated with me in the current environment. The perception is that as real estate professionals, we’re too focused in our own world of leasing, assets, rents etc and we don’t really understand the real business needs related to the resource we manage.
Of course, this isn’t a new perspective. We’ve said for decades that real estate needs to ‘speak the language of the boardroom’ if it is to be taken seriously by the C suite. However, the pandemic has dramatically increased senior executives’ focus on real estate and has exposed and exaggerated this need more than ever.
Corporations increasingly do not see real estate as a standalone discipline but as part of an integrated, dynamic, ‘physical, human and digital (PHD) infrastructure’ that enables the organisation to operate.
Real estate professionals need to have a PHD in the language and business agendas associated with an expanding range of topics related to real estate’s role as part of this holistic enabling infrastructure.
Let’s start with talent. Perhaps the core function of this ‘PHD’ infrastructure, especially in offices, is to attract, retain and make productive the critical talent the organisation needs. Decisions about location, mix, format and design of corporate portfolios are increasingly driven by strategies to serve the organisation’s existing and future talent.
Real estate professionals need to be comfortable working with multiple data sources and research and analytical tools to track and predict labour patterns, then draw conclusions to advise on strategy.
This human-centric thinking is driving the evolution of the workplace – another area where today’s real estate professionals need to be experts. New ways of working are changing the purpose of the office, accelerating the move away from traditional ‘desk farms’ to designs that energise collaborative working in multiple, flexible formats.
The talent is increasingly demanding consumer experiences that match their personal lives, so the whole area of user experience in the workplace is developing rapidly into a core real estate topic.
This includes understanding the needs of multiple employee ‘personas’ and providing the full range of amenities and services for the employee value proposition the ‘PHD infrastructure’ provides.
Wellness is also a growing focus, from healthy building design and systems to a range of programmes and facilities to support the diverse physical, social, and emotional needs of employees in the workplace.
Broadening ESG agenda
Another consideration is the increasing importance corporate organisations are rightly placing on ESG. This is moving on from holistic sustainability and net carbon zero strategies and expanding to include social, diversity and inclusion agendas. These are important topics for the organisation’s brand and talent and the workplace plays a key role – hence it must be a key area of expertise for real estate.
Enabling and connecting these topics is a fast-developing array of digital components of the PHD infrastructure that real estate professionals need to understand.
Platforms such as CBRE’s ‘Host’ include an app allowing employees to schedule office visits; align schedules with colleagues; check room occupancy and reserve meeting space; order food or book fitness sessions; connect to services; report faults and more.
This isn’t to say that expertise in the traditional elements of buildings isn’t still important. But even the conventional ‘comfort zone’ of leasing, rents, availability, etc are changing.
Corporate occupiers can now ‘consume’ offices in an expanding range of formats: serviced offices, co-working, ‘club’-style memberships and even bespoke occupancy partnerships with flex providers. Radical solutions are emerging, where organisations forgo leased offices altogether and allow employees flexibility to work from multiple locations, purchased and connected with digital technology apps.
It is not that businesses need fewer ‘real estate’ people, it is just that the pandemic is accelerating the redefinition of the skillsets required. We need to seriously evolve our thinking and mindset to embrace and learn the new knowledge the future demands.
Otherwise, at the very time when real estate is called onto the stage as a key strategic voice, we will have the wrong lines and others will take our role.
Guy Holden is managing director of advisory and transaction services, EMEA at CBRE