Sustainability and social networks are transforming the way the real estate industry operates, according to Mark Gilbreath, CEO of LiquidSpace, a provider of on-demand office space operating in the United States, Canada, and Australia. In a keynote address at the recent ULI Europe Conference in Paris, Gilbreath said that these two factors are driving a major economic revolution.

While this revolution may seem to threaten the real estate industry—whose buildings contribute to over 50 percent of our carbon footprint and whose practices have not significantly changed for 50 years—Gilbreath argues that it also presents the industry with an opportunity to radically reform its business models.

Available for Download: Mark Gilbreath’s Presentation

Many companies have embraced this opportunity, said Gilbreath, leading to a boom in the corporate real estate (CRE) technology sector. CRE tech is now a recognized portfolio category: more than 75 new CRE tech companies have emerged and $2 billion (€1.7 billion) has been invested in the sector in the last five years. The technologies created by these companies can improve efficiency and profitability in the following areas: visualization, analytics, lease administration, operations, and online rental/optimization.

Gilbreath’s company, LiquidSpace, falls into the latter category. Described as “the Airbnb of office,” LiquidSpace is a digital marketplace that connects individuals, startups, and growing teams to space on flexible terms. The platform fills a void left by traditional lease models, he said, which are too rigid for companies in the “awkward adolescent phase.”

Two key innovations were necessary for LiquidSpace to be successful, said Gilbreath. First, there was a need to move away from the time-consuming lease model to a click-through license model that can be transacted instantly. Secondly, LiquidSpace had to rework the real estate transaction process, with features like exclusive access to inventory online, the ability to follow and “favorite” neighborhoods and properties, and direct communication with hosts without middlemen.

According to Gilbreath, the LiquidSpace model takes advantage of the extraordinary amount of capacity and densification opportunity within the existing built landscape. Notably, one-third of the LiquidSpace marketplace comprises private occupiers monetizing excess space. Gilbreath explained how this model could lead to improved sustainability in the industry. “If we can increase the sharing of the built landscape, there are dramatic building-based sustainability impacts,” he said.

Gilbreath concluded his remarks with two predictions: that half of all office transactions will be conducted online by 2020, and that we will reach “peak office” in the next four to five years.

“We will see . . . a transition from an asset-driven approach to the built landscape—where capital was relatively accessible, debt was available, and profit was based on putting inventory out onto the planet—a shift into what I like to refer to as a ‘great era of unbuilding’ where user-centric development strategies are the driver, practices are developed from an architectural standpoint and developer standpoint that bring efficiency to us, reharvesting the existing built landscape,” said Gilbreath.