Why real estate is becoming a monthly subscription service (and that's a good thing)

Hey friends- here's another piece I just published on our company blog, enjoy!

Buildings are the ultimate symbol of permanence and stability. They shape the skylines of cities for generations. However, the way people are interacting with buildings and their workplaces is changing at a rapid pace. It’s 2016, and the age of the “company man” is fading. Today an average worker stays at his or her job for just 4.4 years. This means increasing competition to keep good employees. And, even when we have great employees, corporate real estate teams are competing with coffee shops and living rooms to provide the best working environments. 

At the same time, we are seeing more companies moving towards open plans and fewer sq ft per person (from 250 sq ft per person in 2004 to 185 sq ft per person today). We have many clients who come to us because they need to offset the downsides of this shift with new perks and amenities.

Put all of these trends together, and we see radically shifting expectations in real estate. Ever since our panel on The Future of Building Management at Greenbiz VERGE last year with our friends at WeWork, I've been continuing to talk with them and others in fascinating discussions about the emergence of what we are calling “month-by-month” real estate. Both of our companies are in the business of providing services on a month-by-month basis, and we are seeing that it produces fundamentally better experiences for our clients.

Here at Building Robotics, we provide Comfort-as-a-Service, which means that we have an ongoing responsibility to make folks comfortable at work, every month, every week, every day. Since we charge monthly and have no minimum contract, just like WeWork, our customers could choose to leave us if we didn’t provide consistent - and, in fact, increasing- value for them over time. Compare that to the HVAC equipment manufacturing industry. They install hardware, leave it in your building, and walk away. Or maybe they charge you for a maintenance contract so that you can get something fixed if it breaks. WeWork doesn’t lock tenants in with a 3-year lease. They just keep doing things to make you happy. We do the same thing. Using these new approaches to commercial real estate, we are meeting the higher expectations of today’s workforce- you don’t need to expect poor service and long contract terms anymore.

The monthly subscription model also creates a faster feedback loop between the post-occupancy evaluation of spaces and the opportunity to use that knowledge to design better. For a typical company, the cycle between new major tenant improvements can be a year or more. For WeWork, it’s a matter of weeks. As any researcher will recognize, any time you can radically reduce the time span of an experiment, the quicker you can learn, iterate and improve.

If you're excited as I am about all the emerging changes in workplace trends, tech, and managing real estate, subscribe to the Building Robotics blog. In an upcoming piece, I’ll be discussing how these trends are creating a need for sensor-based, dynamic real estate management.