CCIM Institute Brings Global Real Estate into Focus
More than 400 commercial real estate professionals gathered Oct. 8 to 9 in Chicago at the CCIM Global Commercial Real Estate conference to explore pivotal issues in today's market -- from workforce shortages to legislative challenges to incorporating technology in the workplace.
In “Leadership in a Time of Historic Change,” Dr. Kevin Elko, performance consultant and author, spoke of leading from the inside using three steps of leadership.
First, he says, is to get people “excited through connection.” See them as a person; next, lead through vision; and last, don't quit, he says. “Successful people have to finish everything they start,” Elko says.
In a session discussing “Top Legislative Issues Facing Commercial Real Estate,” Adriann Murawski, state and local government affairs representative for the National Association of Realtors, spoke about the importance of infrastructure on our quality of life and the local economy. “There's this huge gap from where we can go and where we are today. Would our existing infrastructure right now accommodate the future? I think if I were to answer that honestly I might say no.” In a future of self-driving cars, deliveries by drones, and having all these systems work together, she says we have to determine if our transportation system has sustainable funding for the future.
NAR and CCIM are working together, Murawski says, to encourage members to contact local legislators to think beyond the 2020 extension to the Highway Trust Fund. “We know that there is this looming deadline where we need a sustainable funding mechanism, especially for surface transportation.
Examining the “Shrinking Commercial Real Estate Workforce,” a panel of senior executives gave advice on how to prepare companies to thrive in the face of a workforce deficit and the need for increased productivity.
Moderator Dionne L. Edwards, CCIM, vice president of corporate real estate and workplace at SunTrust Bank, asked panelists how they're feeling about the current talent pool.
“Across the board, we're having a real challenge finding talent,” says Jeff Lyon, CCIM, chairman and CEO of Kidder Mathews.
Panelists emphasized the need for the industry to show a path to success, since seeing success in a commission-based industry may be hard for some.
To encourage new talent, Collete English Dixon, executive director of Marshall Bennett Institute of Real Estate at Roosevelt University, says attracting talent is “looking at how young people see a path and how we get them on it, keep them on it, and get them on the other side.”
Some of the workforce shortage is due to the recession. “We need to differentiate ourselves to appeal to talent. Many people during the recession went to other industries and never came back,” says Brian Murray, CEO of Ryan Cos.
In the future, panelist agreed that technology will change the workforce, but uncertain as to how. “We've been hearing for so long that technology is going to get rid of the real estate broker. Is there an Amazon that's going to disrupt everything? Tech has helped us be better at what we do,” Lyon says.
Further complicating the workforce shortage, the industry is lagging on diversity, Dixon says. The brokerage side of his business is only 10 to 12 percent women, Lyon says, but property management is about 50 percent women.
To achieve cultural diversity, Dixon says, “it's in the colleges, it's in the high schools to get in the pipeline. Diversity and inclusion are different. Everyone in the industry that feels it's important has an opportunity to move the needle. Let's mentor young people to pursue that."
The fact that the book “Blockchain for Dummies” exists proves it's in the near future. In “Who's Afraid of Blockchain?,” K.C. Conway, chief economist at CCIM Institute, reported on the benefits this technology will bring to the industry. “Over 40 percent of global institutions have already converted to blockchain,” allowing elimination of fraud in transactions, and for more efficient transactions.
While understanding blockchain can be intimidating to some, Conway says it's just an operating system on which transactions are housed. Soon, “Every bit of your technology is probably going to have to go through an upgrade, so be thinking about what kind of capital budget to start putting away because … there will be a capital expenditure that you need to plan for.”
How commercial real estate firms are integrating technology and remaking the business was the subject of the following “Transformation through Technology” panel discussion moderated by Michelle Felman, adjunct professor of business at Columbia Business School.
“A fair amount of our business still needs transformation. We're still stuck in email and Excel. That's how a lot operate in the business, says Dan Spiegel, executive vice president of U.S. operations at Colliers International. He also shared how clients often are overwhelmed with their choices when they look at tackling the integration of all their data into a usable tech solution.
In determining whether to create those solutions in house, Richard Sarkis, CEO of Reonomy, says that “it's not just the building the software, it's maintaining it. It's a full-time job for a full-time company.”
In “Managing Risk and Unlocking Value,” Navin Nagrani, executive vice president at Hilco Real Estate, says “We now have these opportunity zones that exist across the country that allow investors to defer the taxes on the sale of properties if they invest in properties in one of these zones. The opportunity to become a big player in that arena is wide open.” Additional opportunities exist in repositioning real estate in secondary and tertiary markets, he shared.
The Business of Real Estate
In the keynote address by Walter Robb, former co-CEO of Whole Foods Market, moderator Conway asked for the key to Whole Foods' success. “Speed and agility are required to compete across the board. Your ability to adjust and evolve will help you compete” Robb says. Leaders should cultivate a willingness to change through partnership.
Good entrepreneurs, Robb says, believe that if they can image it, they can do it. “These folks are not even phased by Amazon. They see themselves coexisting and believe in themselves.”
Going forward, staying on top of the generational change is crucial, since 60 percent of millennials are driven by their values, Robb says. “They are animated more by experience and values than by money. Do you have your purpose or values in a way that they can understand what you stand for?”
The retail market is changed forever due to the oversupply of space. “Even with repurposing, there's going to have to be a rationalization of that space. We also have the fact that in retail today the customer wants an integrated experience” Robb says. “The customer expects to be served 24/7. You've got to design the space to serve how the customer wants to be served today. The grocery store of the future will be smaller, more perishable focused."
But will physical retail stores exist in the future? Robb says that “what you see now is businesses are starting digital first and then going physical. You're building businesses up and now they want to come lay out their stores,” Robb says.
Opportunity zones will bring even more opportunity, he says, with the economic incentive to do something meaningful, citing the opening of Whole Foods locations in low-income neighborhoods in Detroit and Chicago.
Most important, remember that real estate is built on relationships. “We're [Whole Foods] not a transaction company; we're a relationship company,” Robb says.