REAL ESTATE NEWS

No matter what field you're involved in today, adapting to trends and innovating is vital. This is something that's emphasized each year for the annual event at CREtech New York.

At a panel for this year's event R-Zero CEO Jennifer Nuckles and Hines senior managing director of leasing, Jonathan Pearce, discussed the importance of leveraging automation and technology to meet customers' needs and drive business growth.

KEEP CUSTOMERS HAPPY

When it comes to investment decisions, Hines puts returns near the top of the list. However, how do you do that? The easiest answer is keeping existing customers, given how expensive it is to acquire new ones. That's business 101 and is even explained in Season 2 of The Office

"The cheapest tenant you have is the one that you get to keep," Pearce said.

"Customer acquisition is the most expensive part of our business, and so investing in our assets to make sure that they're on the right side of where the customer wants to be, typically will drive a higher tenant retention rate, which in turn drives asset value."

SOLUTIONS FOR MAXIMIZING ROI

And the other question, is how do you keep customers happy? One solution is energy-efficient buildings, which not only benefit the customer — but it drives ROI.

They "command a higher value, they typically would trade at lower cap rates," said Pearce.

"Typically, what we've seen over the last three or four years, sort of post-pandemic, has been that they're often materially higher occupancy, which results in materially higher asset values as well."

Another solution is improving buildings for convenience.

"Think about all the buildings that you brought in that are a little bit too old," Nuckles said.

"You can't find a conference area, you're walking around. These are frustrating things."

Also, Nuckles spoke about utilizing artificial intelligence, which she calls the "biggest trend across the board." It's helping companies learn more about their portfolios and how each building is operating.

It's "based on sensor data to understand how people work, how they're using it, and what the different collaboration levels are," she said.

Meanwhile, Pearce highlighted some problems with technology. For one, they may only be just "solving one small piece of the problem," rather than offering an A to Z type of solution. The other thing is the need for flexibility.

"You need something that's sort of completely open source," he emphasized.

"It's almost like this isn't just a solution that's going to get solved now, it's continuous improvement."

Source: GlobeSt/ALM