Members of four of ULI’s product councils discuss how technology is changing development in their sectors, how growing up with technology has influenced the millennial generation, how the greater availability of data can benefit property owners and developers, how technology can support more sustainable development, and what potentially game-changing technologies lie ahead.
What technologies are changing real estate development most significantly?
Brian Edwards: The technology that has had the most impact is the cloud, because it allows so many things to happen. It allows people to interact with the internet and with each other on their phones and tablets. We can direct experiences to people coming into our clients’ buildings, empowering their mobile devices to have a significant impact on their experience.
Wellington “Duke” Reiter: The most significant change in higher education is the ability to deliver a high-quality, effective, measurable education to people at a great distance, at lesser cost, and on a time schedule that works for them. Scale will matter, and at Arizona State University, we are in the process of building the most comprehensive online curricula for undergraduates. As a demonstration of accessibility, we’re offering a pre–freshman year that lets students see if they’re capable of doing university work at minimal cost. Students all over the world are taking advantage of our global freshman year. They’re working with our faculty in all of our colleges on real courses in real time.
John Hempelmann: Seattle and Bellevue have become one of the country’s main tech corridors. Amazon and Microsoft are still dominant influences, but this is also one of the largest gaming development centers in the world—every conceivable kind of software, hardware, high tech, clean tech, biotech that you can imagine. Amazon and Microsoft alone are building millions of additional square [feet]—there are more construction cranes on the horizon in Seattle than ever before. The population here is not only highly educated, but also highly wired, so every real estate developer is thinking about technology in every project, whether it’s office or commercial or residential or retail or institutional. They’re building for a very tech-oriented, highly educated, savvy clientele.
Steve Coyle: The most important change is that the millennial population today is already larger than the baby boomers and will continue to increase dramatically over the next 15 years or so because of immigration. These are folks who have grown up with technology. It’s changed the way they grew up, how they interact day to day, and how they choose to live. The technology is wireless, it is portable, and it is often handheld. It is becoming more and more integrated into all aspects of daily life and affects how people work, commute, live, shop, play, and interact with others.
How has growing up with technology influenced the way millennials live?
Coyle: There is a tremendous migration of millennials to knowledge-based innovation centers where the job market is dominated by science, technology, engineering, and mathematics. The millennials also tend to be less car-dependent. They’ll use car-sharing apps like Zipcar and Uber. They will use public transportation more, and they can depend on public transportation more because they use apps that tell them when the train is coming and when it’s running late.
Edwards: Millennials don’t like to talk to people as much as older generations do. They don’t want to wait in long lines to check into a hotel. So new apps will let you check in with your phone and get your room assignment. Your phone will open the door and trigger the TV. The TV will have some idea [of] who you are because you’re signed into, say, the hotel’s loyalty club. So the TV can deliver content that’s relevant to you.
Hempelmann: The millennials are highly wired. They would rather use technology than get in a car to go do something. They would rather use social media than go to a bar to meet people. The technically savvy also tend to be very oriented toward sustainability and are big proponents of high-quality, readily accessible public transportation. That has led to the creation of the 2030 District in Seattle, where private commercial building owners are working together to use technology to achieve sustainability goals. The objective is to reduce energy consumption in the downtown office core by 50 percent by 2030, and it’s working.
Hempelmann: In the Seattle 2030 District, dozens of commercial landlords are sharing all of their energy consumption data with each other in ways that help all of them reduce their energy consumption, reduce their carbon emissions, and reduce the costs associated with heating and cooling their buildings. They’re jointly investing in research, both in hardware and software. And that district has expanded to include hospitals now as well as office buildings and parking garages. Other cities are now adopting the 2030 District concept.
Reiter: Academic institutions have been providing online learning for quite some time. But before, you didn’t know if you were achieving high-quality results and how to make midcourse corrections as required. Now, you can achieve unbelievable understanding of student success through the data that you collect in these processes to determine if what you’re doing is effective. There’s no more hiding from the data, whether you’re offering a great living experience in a building, or a high-quality office experience that’s increasing productivity, or a great educational experience.
Coyle: I wish that there were more data available in real estate. The data in real estate have improved dramatically, but a lot of data are in the hands of a few data providers or individual owners. I’d love to see those data more available. It would be great if you could go on Google Maps and see the square footage of every building and see what space is available. That’s where we’re headed. Already on Google Earth, you can click on certain buildings and see a 360-degree panoramic photo of the interiors.
What are some of the challenges of incorporating technology into real estate development?
Edwards: Technology isn’t a commodity. It’s not like buying bricks or windows, it’s like buying an experience. However, you have to think through the experience you’re providing. The quality of the interactiveness has to be exceptional—seamless and effortless. You have to put up compelling content on your screens and walls and do things that people will find cool. And you have to refresh your content so it stays relevant. Otherwise, people will just tune it out. Also, let’s say that you decide to open a hotel or a shopping center. You have decided which tech features you’re going to offer on day one. But those features have a limited shelf life and will eventually be replaced with newer, more exciting features. So you need to create a roadmap for the technology. It’s not like you build a mall for five years. You build it for 25 or 50 years, and you have a roadmap for how it will evolve physically over that time. You need to have a similar roadmap to manage how the experience will evolve.
Reiter: Not every university or college needs to build studios for online teaching and set up its own infrastructure for it, any more than every university has to have its own book publishing enterprise. So smaller universities and colleges may want to consider partnering with other institutions to gain access to online teaching resources and infrastructure. Every institution should concentrate on its strengths. That’s true in the development world as well—there are different levels of scale that work for different companies.
What technologies or technological advances on the horizon should developers be paying attention to?
Edwards: TVs are going to radically change. Let’s say I come into a hotel. I’m from Los Angeles, so maybe the TV will tell me there’s a Dodgers game on, or a Lakers game. If it’s a slow night in the hotel restaurant, the hotel might use the TV to say, by the way, come downstairs, we’re going to offer you a discount on dinner. We’re trying to use technology to maximize revenues by enhancing the experience for guests using their phones and their hotel TVs, which become extensions of the phones.
Coyle: In the next 15 to 25 years, the biggest change is going to come from the introduction of driverless cars. Another potential game-changer is robotics, especially as it pertains to the industrial space and logistical markets. Amazon and others have already started relying on robotics, and that will only continue to grow. That will lower parking ratios, and it will lower the amount of workers who are necessary. The final one is 3-D printing. Already, the capability to 3-D print a house exists, and human organs have been 3-D printed as well. This printing technology promises to create faster, more uniform, and more local production of all kinds of things, and one of these impacts will surely be on real estate and the creation of new and reused spaces.
Reiter: As autonomous vehicles are adopted in the decades to come, that will dramatically reduce the number of people driving and parking on campuses, which will free up a lot of land. Telemedicine will also enable all kinds of relationships that weren’t possible before, between doctors and patients and between researchers at different locations across the globe.
How is technology influencing the sustainability of the built environment?
Coyle: I think that there’s a long way that we can go in terms of adopting technology toward further greening of buildings, such as automatic light controls, water retention, and graywater treatment and reuse.
Hempelmann: The way Seattle building owners are reducing carbon emissions is very tech-intensive. One of the most energy-efficient buildings in the country is the Bullitt Center in Seattle. The roof extends out from the perimeter of the building, and it’s covered in solar panels. It’s feeding electricity back into the grid. Every office in the building is monitored for electricity consumption. Automated blinds and operable windows minimize the need for heating and cooling. Wastewater is treated on site.
Reiter: Some of the change is not technological. We need to address larger issues such as air quality and the availability of water. These issues are not going to be solved by simply making our buildings more efficient. We have to think about lifestyle changes in a bigger way. That’s going to involve buildings, transportation, governance, policy, technology, and innovation.
What other trends are you seeing?
Reiter: In spite of the impact of technology and the ability to deliver education online, we are enhancing the on-campus experience and our facilities at Arizona State. It’s all about creating flexible spaces for team-based work. These rooms look like a mix of a laboratory, a coffee shop, and a tech startup, with all the technology you could want and any kind of seating arrangement you could imagine. We’re putting these spaces everywhere—the library, residence halls, and academic buildings. If you are going to have people coming to campus as well as taking hybrid or online courses, you need to demonstrate the value of being on campus. It’s all about creating effective convergences.
Edwards: We already have concierge technologies for hotels that help guests get to places or experiences around the hotel. The concierge desk is a large touch screen. Say you find a restaurant you like—rather than have the concierge pick up the phone and make you a reservation, you can have a coupon sent to your phone, and it directs you to the restaurant. Another big thing is digital art in the lobbies. In Japan, I’ve seen track lighting fixtures that are video projectors. The brightness is not there yet, and the price is not low enough yet, but this will be a big thing.
Hempelmann: To take advantage of the technological revolution requires a huge circle of collaboration, coinvestment, and synergistic behaviors. It involves the real estate community, government, businesses, and entrepreneurs. For example, Seattle has teamed up with major utilities to put fiber-optic, high-speed broadband systems in the streets, because startup companies and particularly gaming companies need ultra-high-speed internet service to do their work. Also, the state building code council is considering amending the building and electrical codes to require buildings to be “electric vehicle–ready” so that charging stations can easily be added.
Coyle: Technology is changing not just where we work, but also where we play and live. You have to look at technology, but you also have to look at demographics and how the two intersect—because those two factors are driving demand and will continue to drive demand.
Ron Nyren is a freelance architecture and urban planning writer based in the San Francisco Bay area.