Why the blockchain won’t save CRE Tech

I’m a fan of altcoins, crypto currency, digital tokens, etc. Bitcoin, ether, litecoin, and their like have a new business model for how they work and what they can do for people and businesses. The blockchain itself has so many possibilities as to be maybe the biggest invention since the iPhone. You can find new articles every single day on applications for the blockchain – insurance, contracts, credit/loans, purchases, etc.

Adoption of the blockchain will slowly occur across many industries and use cases. But I suspect that it will not be taken too seriously in real estate for a long time.

Why? Because real estate brokerages are struggling to use such simple tools as SalesForce. Convincing them to move to a researchable, relatively open, standardized deal tracking system will be a Herculean task. The sharing of any information is a hurdle that too many in the industry are struggling with which is hampering even commonly used tech in other industries. Trying to move to a platform that makes everything theoretically researchable would be a difficult sell.

Maybe there will be a sea change in CRE (commercial real estate) but it isn’t likely in the next several years. The way money works in the industry will continue to hamper technology innovation and adoption. Until someone disrupts the commission model I have little confidence in radical innovation being adopted.

What’s the difference between Commercial Real Estate and Corporate Real Estate?

This is a topic that has bothered me ever since I first got into this crazy CRE industry. CRE is used as the abbreviation for both Commercial Real Estate and Corporate Real Estate with very little differentiation. As far as I can tell, from common usage in various environments, Corporate Real Estate is used when you are dealing with everything about how space is used – workplace, lease admin, project management, facilities management, transactions, financials, insurance, taxes, etc. Commercial Real Estate is most often used when talking about landlords and the leasing of space.

Normally this wouldn’t cause any real problems, but in our industry it actually does. The real profits and money come from transactions. Real estate firms and many of the top professionals are attached predominately to the leasing side of the business. This is fine other than the primary need of most corporations is around everything but the transactions. See the tension that can cause?

Many professionals on the transaction side of the business have learned to talk the corporate real estate game while playing the commercial real estate game. Anytime words don’t match actions there are problems.

Many very smart people make their living as 100% at risk, commissioned brokers. They know that their best way of getting in with large companies is by helping to address the real problems that they face – usually not transaction focused. There are many that actually try to do the right thing and spend real time and money to support the non-transaction side of the business. But there are also many that talk the game without providing the appropriate action – not always because they don’t want to but just as often because they either don’t have the organizational support.

I know I’m going to tick a lot of people off with this post because many in CRE don’t really believe there is a disconnect on this point. But I’ve seen it from both sides at this point and know it to be real.

It’s something worth thinking about as you try to figure out who is best positioned to support your CRE needs.

Existing on the periphery of other people’s decisions can be difficult

All of us are impacted by the decisions of others. When we are children our lives are dictated by the decisions of parents, teachers and other adults. When we first start working, we are pushed by the decisions of managers. As we grow in our careers, we are still impacted by managers but often we also become impacted by the decisions of others outside of our direct line.

In real estate, this particular phenomenon is acutely experienced. If another group decides to grow by 100%, our job is to accommodate it. If HR decides there will be no more work-from-home, we have to ensure we still have enough seats. If a business decides that they need to open internationally, we’re on the frontlines helping find sites.

Our role is not to be directly part of these decisions and often we aren’t even consulted beforehand. These decisions directly impact our daily experience. It can be uncomfortable being at the whims of others that you neither report to or manage.

This discomfort is powerful because it is correct. Working for the decisions of others is more challenging than being fully accountable. At the end, your success is tied to the correctness of the original decision. Consultants and other service providers operate this way at all times. It actually enhances their authority in certain situations while allowing them to play the role of neutral arbitrator.

This discomfort from being driven by the decisions of others puts you in good places. The role of the neutral arbitrator is one of the most powerful in an organization. Yours becomes the voice that justifies and endorses the decisions or nudges them toward greater correctness. Embrace the role and you may find amazing things happen.

What unspoken skills do you use all the time that could use sharpening?

One of the main attributes of self-reflection is that you need to constantly question and evaluate how you do what you do. No task is so simple as to be accomplished through only a single skill. Listening effectively requires empathy, patience, analytical thinking, and self-control (just to name a few).

Many people know that they need to practice having more empathy or self-control. Others practice patience. But usually, this practice is generalized and not necessarily with the goal of becoming a better listener. Practice should be done with purpose. You should know the outcome you are trying to achieve.

Recently, I’ve been consciously practicing writing more effectively. I’ve been working on my construction of ideas, providing greater clarity, and expressing an idea correctly the first time – stopping to think before committing the thoughts into words (see what I did there).

Through practice, I believe that my writing has gotten cleaner and more focused. A side effect of this has been increased depth to my thinking on topics. Because I’m not just dashing off anything in 15 or 30 minutes I need more prep with my subconscious. It doesn’t actually take more time to write, the topics simply need to be more fully realized before I move into writing.

Conscious practice does us each wonder. It teaches us what we should really practice. It teaches us what we are actually good at. It builds up our fundamentals. What should you be practicing?

Do you remember the iPhone release and how the world changed?

Probably not, because the world did not change with the release of the iPhone. There was no immediate shift in ability. There was no sudden realization that the world was different. In fact, many thought that the initial iPhone was a very imperfect device (which history has proved out). It was only years later that the world really started to noticeably shift. The iPhone was the lever that enabled the shift but the lever was pulled by others.

The world rarely changes overnight. Even when war is declared, it was usually a long time coming. America’s Declaration of Independence is celebrated every year as a day that the world changed but, again, the act was a long time in coming. It did not simply spring into existence.

In real estate, this is truer than in most other areas. Any act we make usually has months or years of planning behind it. Any sudden reaction could have been foreseen with the right information to hand. Our world is one where change is slow and hard fought.

But when change starts in slow moving fields, it comes all the stronger when the lever finally gains purchase.

As I look out at the real estate landscape, I see the move of agile working to be changing the world. Slowly the definition of what corporate real estate is is changing. Our world in 10 years will be almost unrecognizable from 10 years ago.

It’s impossible to have perfect understanding.

Many people strive to understand. We seek to understand ourselves, others, the problem in front of us, the solution we were given, how a situation came about. There are many things that we may wish to understand.

Perfect understanding is not possible. All problems have too many variables to truly grasp everything in significant detail let alone with perfection. We can’t understand ourselves because we cannot understand our subconscious desires. We cannot understand others because we cannot even understand ourselves. We cannot understand the problem because entropy means any decision made today will no longer be perfect tomorrow.

The moment that you believe you have understanding, you immediately lose it. How can you understand when the simple act of observing changes both observer and subject?

Yes, this is philosophy but it is also actionable every day. If we believe that we have complete understanding, we will act on that belief. We won’t hedge against the risks, we won’t make contingencies to revisit the solution later, we will believe that our comforting words really were comforting and not painful. Believing you really understand is a fallacy few can afford.

Recognition is not always worthwhile.

One of the lessons I learned early in my career is that if you make the cover of a magazine, you’ve done something wrong. Doesn’t matter if you make the cover for good reasons or bad. Making the cover means that you did something completely new or different (or wildly wrong and a roof fell in…).

Since then, I’ve come back a little from this being an absolute truth. Sometimes you make the cover because you simply were in the right place at the right time. Or because you accomplished something new in one place that is actually well practiced in another.

Recognition can be a great thing. It can springboard your career, it can introduce you to new people, it can put you in a position to see other new things coming down the pipeline. It’s tough to beat positive recognition.

But for all the good it can bring, sometimes it can hurt. That same positive recognition can bring new expectations that are unachievable. It can diminish the contributions of the team that did a lot of the work. It can misrepresent the entire project. Sometimes it is important to realize that working from the shadows is often the best choice.