Retail will all be online. New York is dead. Yay suburbs, Boo urbanity. Everyone will work from home always. We will live anywhere (literally) and work from there. Malls are dead. Business travel and hotels will never come back. As we have all heard many times since the start of this health pandemic—COVID is just accelerating existing trends in real estate.
“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten. Don’t let yourself be lulled into inaction.”Bill Gates
This simplistic sound bite is directionally correct, but as Bill Gates’ quote illuminates, it may be a little, or lot, off on the timing. As they say, “in the end we all die”…. but there is a lot of time between now and then, hopefully!
I think the important part of Gates’ quote is, “Don’t let yourself be lulled into inaction.” Another way is to take the opportunity when disruptions occur to adapt and innovate to meet changing needs.
I have been lucky to be in the real estate game for a long time, and it has been fun to see the many leaps forward in the industry.
- The capital formation became further institutionalized with the advent of securitization, public REIT’s, Private REIT’s, and other financial vehicles.
- Development always advances with the creation of new materials and construction techniques–a six-story tilt wall, give me a break! One million square feet of warehouse under one roof–come on. Timber construction for office buildings–oh my!
- Technology has impacted all businesses, including real estate, for a long time. I don’t want to give my age away, but I had the coolest “bag phone” you can imagine (look it up folks–one of the first “mobile” phones). Now, a whole computer fits on a device the size of my hand. How about leaps forward in using mobile phones for geocaching to determine traffic patterns, and then applying machine learning to the massive data sets for conclusions?
- From self-driving cars to Uber Air taxis like the Jetson’s, changes in transportation were depicted five decades ago. (Look it up–the opening song “Here comes George Jetson, his wife, Jane”).
The point is simply while our world is moving fast, which is awesome, we should all take time to understand the underlying fundamentals and benefits of the changes. This likely takes more time than it feels like we have, but we have time to experiment and innovate.
I am excited to see all of the great Dallas Real Estate Community innovations to develop new products, locations, services, and capital during this current time of disruption!
Michael Dardick is chief executive officer or Granite Properties.