Page Header

The Democratization of Commercial Real Estate

Posted By Mark Rosenthal | Apr 12, 2021 8:30 AM
The Democratization of Commercial Real Estate

Boston’s Seaport has undergone a radical transformation over the last 10-15 years. What used to be relatively dead space made up mostly of parking lots has turned into one of the most desirable locations in the city to live, work, and play. 

One of the big developers of the Boston Seaport is WS Development. Over the years, I had the chance to meet and spend time with Jeremy Sclar, the President of the company. It is a forward-thinking company that is equal parts real estate, branding, and experience.

When I worked at Google, I brought Jeremy in to meet with the Real Estate & Workplace Services (REWS) team. He and the WS team gave an incredibly compelling presentation focused on moving Google from Cambridge to Boston’s Seaport. Their pitch was data-driven, including the time saved on commuting from every direction (it was an average of 10 minutes each way) and the increased productivity gains. They offered a build-to-suit, brand new building with plenty of room for expansion.

The REWS team was blown away. In our debrief after the meeting, they shared how excited they were about the prospect of the move. The next thing that happened shocked me. 

REWS sent out a survey to Cambridge Googlers asking them about their office preferences. Considerations like Boston vs. Cambridge, food and beverage optionality, modes of transportation, and more were all part of the survey. The overwhelming response from the employees supported staying in Cambridge. 

Conversation over. There was no next step with WS Development. 

This is the democratization of commercial real estate. Many companies are now seeking input from their employees — even those that aren’t are likely hearing it anyway. Consumers have become accustomed to having a voice. Whether they use social media platforms or find other pulpits from which to preach, they expect to have their voices heard. This is particularly true of millennials. 

Considering that the most valuable resource for any company is its human capital, and since millennials make up the largest portion of the workforce, it seems pretty clear that a relationship with those constituents is more important than ever. In fact, according to JLL, the average company spends $3 per square foot on utilities, $30 per foot on rent, and $300 per foot on people. 

In the conversations I’m having across the market, there is a clear shift in focus happening. Commercial office owners and investors are moving to a more hospitality-driven approach, hiring new team members with new skill sets to meet the new demands of the market. Those will be the winners in the long run, as it will help them to win the hearts and minds of the people who work in their buildings every day.  

Google has been a leader in workplace experience for a while now. It is a bellwether brand that others follow. Not every company thinks like Google today, but in the war for talent attraction and retention — the most important battle employers fight every day — eventually, they will.