Feb 11, 2020, 2:41 AM ETPanel

Being the Disruptor, Not the Disrupted

The central mandate for real estate leaders is to be "the disruptor, not the disrupted" by maintaining reactionary speed against change originating from technology, global politics, and shifting demographics.
A "new deck of cards" representing new investment windows is dealt daily, with young people holding the greatest advantage in leveraging emerging trends.
Successful investment requires matching capital and cash flow to the resilience of "gateway cities" to smooth out local market cycles, such as the high-end residential glut in New York.
The industry is shifting from a focus on traditional asset ownership to a business model where technology and data are the primary drivers of value creation and customer retention.

Demographics: Millennials constitute 25% of the global population and demand products that facilitate collaboration, copying, and sharing of information; this mindset dictates product design in leisure, residential, and office sectors.
Urbanization: Investment is heavily concentrated in gateway cities (London, Madrid, New York, Los Angeles, Miami) to capitalize on the migration of populations away from rural areas toward global hubs with high activity and leisure density.
Technology Occupancy: Major technology companies (e.g., Google, Facebook, Salesforce) are replacing traditional financial firms as the primary occupants of office buildings in major global cities.
Flexible Workspaces: "Flexible office" take-up has surged significantly between 2011 and 2015, evolving from the "Starbucks model" of informal work to dedicated co-working spaces.
Wellness and Lifestyle: There is a strategic pivot toward businesses addressing the "time-poor but health-conscious" demographic, including large sporting complexes (St. James), women's empowerment co-working spaces (The Albright), and experiential leisure concepts (Swingers mini-golf).

Digital Transformation: Kean Group shifted marketing spend from print (under 1% of budget) to digital (90% of budget) to align with customer acquisition behaviors.
Data Analytics: Kean utilizes social media data and local demographic modeling to predict business viability, successfully identifying Washington D.C. as the optimal location for a new "Swingers" mini-golf concept based on median income and population mix.
Customer Lifecycle Management: DMACC focuses on data lakes to manage long-term customer relationships, noting that property interactions can span 4 to 15 years, allowing for deep data monetization if ethics are maintained.
Operational Efficiency: Technology is deployed to reduce friction in the "back of house," such as automating customer service interactions so clients no longer need to visit offices post-purchase.
Privacy Risks: While data monetization offers significant value, panelists warn that selling consumer data to third parties is increasingly unethical and legally risky, particularly as US and European regulations tighten.

Asset Pivots: Pretium moved from traditional "vanilla" office spaces to specialized biotech and life science labs, and pivoted retail investments from brick-and-mortar to last-mile logistics hubs for e-commerce.
Geographic Shifts: Investment focus is moving from traditional hubs like New York to growth markets with favorable tax environments and quality of life, such as Austin, Salt Lake City, Charlotte, Lisbon, and Barcelona.
Luxury and Brand Licensing: There is a strategic embrace of luxury brand licensing (e.g., Lamborghini, Cavalli, Oberoi) to create unique real estate experiences that align specific demographics with premium products.
Hospitality Redefinition: The Equinox Hotel in Hudson Yards is cited as a disruptive model that integrates fitness, sleep science, and wellness directly into the hospitality experience, moving away from traditional hotel amenities.
Regulatory Lag: Physical real estate development is hindered by regulations that are years behind technological reality, such as obsolete parking space requirements that conflict with the rising use of ride-sharing services.

Financial Deregulation and Volatility: The panel highlights the danger of relying on cost-cutting strategies (e.g., Kraft Heinz) over consumer insight, which led to significant value destruction ($60–$70 billion) compared to agile disruptors like SweetGreen and Beyond Meat.
Black Swan Events: Unpredictable events like Brexit and the coronavirus pandemic pose significant threats to global trade, particularly China's relationship with the West, necessitating that capital structures assume the "worst-case scenario."
Cultural Requirements: Successful organizations require a culture where bad news travels fast to the top, preventing complacency and ensuring rapid reaction to negative market indicators.
Funding Strategy: Real estate funding must be matched to the duration of asset realization, ensuring liquidity exists to survive potential downturns rather than assuming continuous growth.
Human Element: Despite technological advances, the physical experience of gathering and human interaction remains irreplaceable, requiring new developments to prioritize tangible community spaces over purely digital utility.