Solomon McCown hosted its inaugural panel event in New York City, dubbed “Square Footage.” Held in a historic brownstone in Greenwich Village, it was a fitting location for a timely discussion about the companies and technologies that are shaping the future of the commercial real estate business.
Solomon McCown CEO Helene Solomon moderated the event, which was co-sponsored by Splacer, the Manhattan Chamber of Commerce and Solomon McCown. Real estate brokers, investors, and property managers noshed on breakfast sandwiches and coffee during a lively discussion with Adi Biran, CEO/Co-Founder of Splacer, Eugene Lee, Head of Property Acquisition & Business Development for Knotel, and Dror Poleg of DP&CO.
Splacer is a technology platform connecting people to carefully curated event spaces in New York, Chicago, Miami, Los Angeles and San Francisco. Much like Airbnb, Splacer doesn’t own or manage any of their spaces, but serves as a convener, creating demand for under-utilized real estate assets and providing a full range of event services support to their clients.
Conversely, office headquarters on-demand experts Knotel manage commercial real estate spaces and deliver corporate tenants who need more flexibility in their lease terms. Though the two companies have very different business models, both are part of a new class of companies in the commercial real estate industry that help property owners maximize their space and position themselves for success with a new generation of business owners. Companies are increasingly run by younger, millennial decision-makers, who are focused on the present and what they need right now versus leasing more space than they need for anticipated growth, months or years down the road.
According to Eugene Lee of Knotel, owners and brokers have been too focused on larger commercial tenants, leaving small- to medium-sized businesses underserved. Technology now allows organizations to “buy” the amount of space they need for right now, rather than five or 10 years from now. Another millennial trait shaping the future of real estate is this generation’s focus on experiences and its disinterest in owning physical space or material things like cars and bikes. Splacer credits Airbnb with disrupting the idea of how we share space. “There’s a beautiful synergy that happens when you open your space to shorter-term rentals and opportunities,” said Adi Biran.
“There’s less and less distinction between what is a hotel and what is an apartment,” Dror Poleg said of the shared space trend that has shaken up the hotel and real estate industry. “If you stay in an Airbnb for two weeks, are you living there or are you on vacation?” To the new generation, the distinction doesn’t seem to matter much.
The same is true for office space and corporate headquarters. Eugene Lee of Knotel says that what has surprised them is the speed of decision-making for their services. They attribute this to offering a premium service, taking on much of the risk associated with long-term leasing deals and allowing CEOs to focus on running their business.
The ways that landlords offered a space seven years ago are no longer relevant today. One thing all the panelists agree on is the certainty of change. “Socioeconomic changes drive people to look at more flexible solutions that are suitable to them,” said Poleg. With innovators and great collaborators within the sharing space, like Splacer, Knotel and Dror Poleg paving the way, we think the future looks pretty bright.