It is a basic rule of real estate that developers should understand their potential customers and attempt to customize their buildings or proposals to match their needs and desires. This is typically based upon the historical tendencies of the customer and can be a tremendously effective method, assuming that the tenant is on a consistent course.
This trend of personalization is developing quickly in the Internet industry as well. For example, if two people sitting side by side at Starbucks search the same term on Google, they will likely receive very different results. Google now tracks past usage, tendencies, site searches, etc. and offers back to each person a different response in a customized format based upon these varying factors.
If England, for example, were the search term, one person might receive a screen full of travel tips, fashion trends, and visitor locations, while the second person might see a listing that includes political stories, economic news, and business articles. The search engine assumes it knows what users want based on their past and provides it to them; at the same time, it limits what they will see and access.
As some have brought to light, personalization may seem like a positive, but basing it on past habits may not prove the best solution. In a highly fluid environment where companies are quickly changing their products and services or their recruiting needs, making an assumption of future needs based on past actions can often lead to a mistaken offering.
The same is true in real estate. To base a proposal for space needs for the next 10 years entirely on the tenant’s needs in the last 10 years could make for a huge miss. The decision maker in the corporate office may be a Baby Boomer with one set of defined tendencies, but the heart of their business future might well lie within the group of Echo Boomers who are (or are being recruited to be) the future of the company.
What each of these demographic groups value in an office location or environment is likely different. Where as proximity to home may be the priority of the Baby Boomer, walkability to dining at lunch and proximity to after-work retail, dining, and entertainment may be a more important to the future leadership of the company.
This same logic has escalating impact on retail (just visit an Apple Store), and, even more important and timely, multifamily real estate. (Ask any Echo Boomer if they would rather have free wifi and a built-in flat screen LED TV or a slightly larger bedroom).
How we work, shop, and live continues to evolve at an ever accelerating pace based on changing values, globalization, technology, and the economy. As these changes happen, we have to ask ourselves if we are evolving our buildings, proposals, and services at an equally accelerating pace.
