Office Space Abundance
Plus 4 Financings, 1 Piece of News, 12 Worthwhile Reads, and a Podcast
Well, I asked for a thoughtful piece on the future of work and Dror delivered. Twice.
And good-old CB Insights did what they do - visualizations galore!
I would encourage you to read both of Dror’s posts as well as Ben Thompson’s Never-ending Niches, because they both work on the same point.
Abundance is a problem for those who rely on scarcity. News Media/Music found out the hard way.
Duh, I hear you saying, but look in the mirror, CRE.
How do you charge those premium rents and retain those credit tenants? (Hint: It’s not your work ethic or charm!)
You have a prime location (rare) with high-quality amenities (rare) and the best tenants will pay for that. That’s the very core of why new office buildings get built.
Now, look at the world post-COVID.
As Dror points out, many people have been forced to look at being productive outside their shiny office walls. What would have happened over the course of years has happened in months.
And it’s kinda worked.
Uh oh.
Now, as any coffee shop, hotel lobby, restaurant space, warehouse, storage unit, or pretty much any other space that has both quiet and wifi can be a workplace, quality work space is no longer scarce.
And when people don’t need your scarce resource as much, they don’t pay as much for it.
To be clear, I’m absolutely not claiming the end of office space and I totally ascribe to the value of in-person office space.
But I am detecting a tidal shift towards abundant work space options and that is a huge problem for office landlords who depend on core, high-rent property.
If I were in that position, I’d be acquiring right now.
Not properties.
Coworking operators.
Because, in a very real sense, you are offering the same thing - a place to work.
In fact, right now I’d be bargain hunting.
I can’t imagine that Industrious, Convene, Knotel, and yes, even WeWork, are commanding anywhere near the sky-high valuations they did before the pandemic since very few people are coming into offices regularly.
I’m betting a Hines, Tishman, Boston Prop, Blackstone, etc could (should?) acquire one of these operators and run them as an inexpensive and thoughtful hedge to that market-premium office rent exposure.
Food for thought.
On to this week’s deals and data:
Fundings:
Propeller, a Denver-based 3D mapping and site analytics startup, raised an $18m Series B led by Blackbird and Costanoa Ventures.
Cohesion, a Chicago-based smart office building startup, raised $6.5 million in seed funding led by Hyde Park Angels.
MeetElise, a New York-based provider of leasing agent software, raised $6.75 million in Series A funding led by Navitas Capital.
Admittedly, this one isn’t directly PropTech, but any time Lightspeed, Kleiner, and Obvious Ventures are in the same deal I think it’s worth noting.
Funds:
Paid Subscribers Only.
News:
Autodesk is acquiring construction workflow startup Pype.
Worthwhile Reads:
You probably already know that I admire the content put out by NfX. Their latest piece on How CEOs Think is no exception.
CB Insights did what CB Insights does - made a long, detailed overview of the future of workplace technology. (Gesture detection is interesting . . .)
Kudos to my friends at Corigin for this.
I like this inside look into the turnaround at WeWork.
D2 and SmartRent put together a report on smart apartment technology.
CBRE released a survey of how the future of office looks according to CRE execs.
Check out this article from Gridium on how to break open energy efficiency.
MotleyFool joins the party with their own piece on CRE tech and trends.
Forbes highlights Logical Buildings in a multifamily-during-COVID piece.
Starbucks new walk-thru concepts could be interesting in terms of retail site layouts and footprints.
Goodwin’s take on post-COVID hospitality.
Dror Poleg’s weekly piece draws parallels between the fall of Tower Records and the CRE industry.
Listen:
Make sure you check out this miniseries of podcasts on buzzwords in PropTech from our friends at PropModo.
Thanks for reading!
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