100% Occupancy Just One Trend Emerging From Realcomm 2003!
Each year, a great deal of energy and intellect comes together at Realcomm to share insights and innovations related to technology, building automation and business solutions for the Commercial Real Estate industry. This year proved to be a banner year as Realcomm celebrated it’s 5th anniversary.
The last five years have each had their own distinctive story. 1999, our first year, was in many respects the beginning of the Commercial Real Estate “tech” industry. Before this, there were a number of property and facility management software solutions but no real industry. In 2000, our new found marketplace was thrust into the chaos of dot.com. This quickly faded, and in 2001 we began to feel the meltdown of the dot.bomb phase. By 2002, the tech sector had hit the wall. Many of the get rich schemes and fads imploded and most in the Commercial Real Estate industry had lost their interest in the topic.
During this same period of time an interesting thing was occurring. The true believers, the early adopters, the very smartest in our industry kept going. In many respect they were contrarians, but as history would prove, they were right on. They knew that the true power of technology was not in unproven business models or get rich schemes, but rather in a pragmatic reengineering of time-intensive and costly business processes within their own organizations and buildings. Just when the majority was giving up on technology and automation, these true believers were intent on redefining themselves.
At Realcomm 2003 it became apparent what these leaders and innovators have been doing. They discussed their case studies, the lower expenses, the higher revenues, the streamlined processes, the improved client communications, the connected buildings and more. For those of us involved in the conference, across the board, we felt that this was in fact the best Realcomm ever. The vendors were solid, the solutions tested, the case studies real and the results staggering. In our opinion, history will show that 2003 was the year that the Commercial Real Estate Industry really began to embrace technology, the Internet, business solutions and building automation.
We knew the topic was getting serious when vendors such as Cisco, Intel, Hewlett Packard, Oracle and Unisys showed up with their own ideas on how technology and automation can impact our industry. Next year, we expect IBM, Microsoft, Yahoo and eBay to join in on the conversation. With so much paper being exchanged in our industry, it is not hard to understand why these giants see so much opportunity in streamlining our business. If in fact we are a 4 trillion dollar industry, a 10% increase in productivity could result in a $400,000,000,000 savings.
The most exciting aspect of Realcomm 2003 was that there were fewer discussions about technology and more about business. Of course we have to use the technology in rebuilding our organizations and building operations. However, the real transformation occurs when the result is better business, higher occupancy, better retention, lower costs, better communications and happier clients. One interesting trend that became apparent the second day of the conference was 100% occupancy. On many of the panels dealing with Intelligent Buildings and Property Operations, the speakers discussed how their projects were 100% occupied and running at higher margins than ever before. While many around the country are trying to figure out how to deal with 20-25% vacancy rates, our speakers were discussing why their buildings were full. Can technology truly differentiate these properties? Can business processes be so automated as to become automatic and extremely profitable? The answer is yes!
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Over the next four weeks we will attempt to identify and summarize the top trends that emerged from Realcomm 2003. We believe that we are truly at a point where accelerated adoption by the innovators will lead to an extreme recalibration of our industry. Every aspect of how we design, build, lease, manage, transact and use Commercial Real Estate is going to be impacted by technology and automation. If you attended Realcomm 2003, you know what it feels like to be in the eye of a storm. For those of you who did not attend, hopefully our Advisory will help you to better understand what is in store for the next 12 months.
Next Week: Top Trends For 2003!