My Best AI Predictions for Commercial Real Estate for 2024
I haven’t been at this long but have so enjoyed researching AI and its effects on the commercial real estate industry this year. From the Boston ICSC Tech PanelI moderated in July to the seven new AI in CRE articles I published, it’s been very interesting and educational. AI is such a fun (yet slightly terrifying) topic to follow but we must continue to learn about what it can do and how it can help us.
Below are my AI predictions for 2024 as they relate to commercial real estate.
1. New Marketing/Tech AI Positions
We’ll see commercial real estate owners and brokerages dedicate dollars to an AI specialist that understands how to integrate AI at a tech level to streamline processes but also someone in marketing that understands and digests AI data and predictive analytics. Partners can’t expect everyone to understand the ins and outs of AI so they’ll need to call upon new AI leadership. This leadership will also set guidelines for utilizing AI at the corporate level, especially as copyright issues will continue to be raised. From a marketing standpoint, It’s important/helpful/wonderful to lean on AI but make sure that we modify content and use our own creativity and branding as a baseline.
2. More Smart Buildings
As AI advances, all things that utilize it will as well, like various building systems. The integration of AI technology with building systems will enable owners and operators to optimize energy consumption, reduce maintenance costs and most likely, improve tenant satisfaction. Smart buildings will be able to adjust lighting, temperature, and ventilation systems based on occupancy, weather and other factors. Now, we just need some robots to snow plow all of our shopping center lots! But…with global warming this will probably be less of a budget strain….EEEK!!!
3. More International Retailer Interest with Improved Virtual Tours
This year, I’ve seen a number of international brands come to Newbury Street, Boston (Hublot, Breitling, Sezane, Byredo, Blundstone, ba&sh) but I’m thinking that as AI advances, so will international interest in our top retail districts. AI will continue to enhance the virtual and augmented reality capabilities. Potential tenants will be able to better virtually visit properties/vacancies and visualize design concepts. I imagine this tech will also be used in the design and construction. We’ve obviously seen very high-end brands come to top US cities but would love to see other international brands come too, I mean some of the craftsmanship and products are unreal but not everyone can afford a $25,000 watch or $50 mascara.
4. Marketers Crank Out More Content
Now that AI basics have blanketed the marketing community, I think we’ll see more in-house marketing teams rely on AI to crank out content for social media. This isn’t a good thing as I worry that some in-house teams will lose their creativity and brand voice as they try to do more but we have to remember to be content strategists, not content vending machines (per WordPress at HubSpot’s INBOUND marketing conference this year).
5. More Leads with Smarter ChatBots
I’ve written about this before but I have been blown away by the amount of leads you can attain from a chatbot. Yes, you have to filter through the junk aka things that have no relevance to your company or answer straight up weird questions but I do think as this tech evolves it will get even smarter with AI. Chatbots will and are currently able to now understand more human dialogue and behavior and also digest large amounts of content like your complicated website. I think those that don’t add a chatbot to their websites are missing out big as they’ll continue to answer easy questions that were taking time from staff and create more leads. If you can create a system that takes these leads and inputs them into a CRM system with an automated lead nurturing campaign, that’s the ideal.
This is my last AI in CRE article of 2023! Thank you for reading, whether this is your first read or you’ve read all seven this year. Come 2024, I’ll continue to research, write and review AI and its impact on commercial real estate with our AI in CRE LinkedIn newsletter, which drops every Friday at noon.
ICSC New England 2024 Recap
The ICSC New England conference concluded this week with great success at the ever so floral-glamorous, Encore Boston Harbor.
As a member of the Program Planning Committee, I wanted to reflect on the event and share some insight for those that weren’t able to make it, or for those that only attended certain sessions or events.
We curated a program filled with outstanding speakers, varied sessions, and amazing networking events. The highlight for many, including myself, was the keynote by Boston Celtics head coach Joe Mazzulla, whose insights and wisdom certainly left a lasting impression.
The conference featured several other standout moments. I had the pleasure of collaborating with Julie T. Fox and Lindsay Corsino on the Women’s Networking Breakfast with Pipeline, which brought in a full room of ladies. Additionally, the AI in Commercial Real Estate Workshop, where I worked alongside Stephen Harrill, CCIM, Michael Branton, Retail Growth Strategist , and Jill Szymanski, was super fun and I believe successful, shedding light on the transformative impact of artificial intelligence in the industry. Andrea Simpson‘s session on the brand creation of the new development, Lyrik Back Bay, was another highlight, speaking to the inspiration behind the brand. The boat cruise hosted by Marcus & Millichap and the post-event reception, hosted by The Wilder Companies, Hinckley Allen , and CohnReznick LLP, provided great opportunities for networking and just cheers-ing with industry friends.
Keynote: Beyond the Bench with NBA Boston Celtics Coach, Joe Mazzulla
Joe’s speech was both inspiring and thought-provoking.
He emphasized the importance of alignment and building a philosophy centered around employees, or in his case – the players.
According to Mazzulla, effective communication and breaking down barriers are crucial to achieving this alignment. He encouraged us to embrace vulnerability, confront challenges head-on, and maintain a balance between selflessness and personal ambition.
Mazzulla also discussed the significance of having interests outside of work, leveraging adversity, and inviting distractions as opportunities for growth.
His perspective on treating everyone fairly while recognizing individual differences was particularly ensuring as a strong leader.
He also shared his approach to dealing with media pressure, viewing it as an opportunity rather than a burden and even said they need the media.
He also stressed the importance of staying grounded and focused on what truly leads to success.
AI Workshop for Retail Real Estate — From Leads to Leases
Throughout the Workshop, several AI tools were discussed, each catering to different aspects of CRE. Tools like ChatGPT and Claudeoffer robust alternatives for generating content and automating communication.
Perplexity.AI, an “answer engine” similar to Google, provides precise answers sourced from a vast database.
Scranton.AIoffers intelligence from city and county council meetings, a valuable resource for understanding local regulatory environments.
Additionally, tools like Fireflies.AI, Read.AI, and Otter.AIwere highlighted for their capabilities in transcription and meeting summarization.
Stephen Harrill, CCIM emphasized the importance of crafting precise prompts when using these tools, like giving clear instructions to an intern. This approach ensures that the AI delivers the desired outcomes, making the user experience more efficient and productive. More to come on the AI session in my AI in CRE article coming out on Friday Aug. 2nd so stay tuned or sign up here.
Lyrik Back Bay: A European-Inspired Mixed-Use Plaza Transforming Boston
Representatives from Samuels & Associates unveiled the much-anticipated Lyrik Back Bay project. This European-inspired mixed-use plaza, described as both unique and vibrant, promises to be a transformative addition to Boston’s urban landscape. Moderated by Thomas Phillips of Brown Rudnick LLP, the session featured key insights from Greg Contente, Rachael Diharce, Emily Simard, Andrea Simpson, and Joel Sklar.
The Lyrik Back Bay development is built on a foundation of reconnecting neighborhoods, a concept that has been 25 years in the making, per Joel Sklar. The project aims to create a vibrant community space that ties together different parts of the city.
The team discussed the strategic acquisition of air rights over highways and parcels of land on both sides, which allows the site to serve as a gateway to Boston, not just for Back Bay but for the broader community. This legacy project has been meticulously planned, with input from local residents over the past decade, emphasizing the need for open, inviting spaces, particularly space focused on enjoying their local sunset.
Scheduled to open next week on Monday, July 29th with citizenM hotel (408 Newbury Street), the Lyrik Back Bay plaza includes notable features such as the hotel, which will boast a rooftop bar and views of the sunset from a second-floor viewing space.
The development also hosts a variety of retail and office spaces, including 1001 Boylston Street, which will house CarGurus’ new office with 1,000 employees moving from Cambridge. The retail component seeks to attract high-end tenants from places like New York and Miami, with 37,000 square feet of retail space already 65% leased. Notable tenants include Pink Carrot, Rivian, Avra Estiatorio, Chicha San Chen tea, and George Howell Artisanal Coffee. Emphasizing the project’s cultural and artistic inspirations, the Lyrik brand draws from Boston’s rich musical heritage, featuring an 80-foot piano installation that played over 4.3 million keystrokes across one month.
The project’s ethos is encapsulated in the statement, “We didn’t build a building; we built an invitation.”Lyrik Back Bay is the first development of its kind in 40 years, following in the footsteps of Copley Place. This bold and confident project, inspired by the creativity and energy of Berklee and Tower Records, aims to create a soulful, inviting and musical atmosphere.
Upcoming events include the opening of citizenM as noted, a series of sunset viewing events, and the launch of an Urban Forest in December. As the project continues to unfold, Lyrik Back Bay is set to redefine the urban experience in Boston, blending culture, community, and commerce in a harmonious and engaging setting. Can’t wait to check this place out in-person!
Navigating the Evolving Landscape of Retail Real Estate: Insights from a Capital Markets Session
At the Capital Markets session, industry leaders gathered to discuss the current state and future prospects of capital markets in the sector.
The session, moderated by @Michael Riccio, Senior Managing Director at CBRE, featured a panel of notable experts including Chris Angelone, Co-Head of National Retail Capital Markets at JLL; Barry Carty, Senior Vice President of Acquisitions at Federal Realty Investment Trust; Katie Grissom, Head of Retail & Mixed-Use Americas at Nuveen Real Estate; and Eric Smookler, CFO and Co-Chief Investment Officer at WS Development.
Their insights painted a picture of a dynamic, competitive, and evolving market landscape.
And hats off to sub-committee volunteer chair, Aaron Huntley, whom made creating a diverse panel for this session a priority, all speakers were fantastic.
One of the primary takeaways from the session was the intense competition for high-quality retail acquisitions. As Chris Angelone noted, retail is currently a hot asset class with significant interest from investors. However, there is a shortage of high-quality assets available, leading to consistent transaction values. Angelone predicted an uptick in transactions as more capital, transitioning from “retail curious” to “retail serious,” enters the market. Barry Carty emphasized that while the fundamentals of retail real estate are healthy, success requires the right team and strategic approach, as the market is far from commoditized.
The discussion also touched on the impact of inflation and rising construction costson the retail sector. Barry and Eric highlighted that building new retail spaces has become nearly impossible due to the high costs, making smaller, less complicated deals more attractive.
Katie Grissom pointed out that the preferences of consumers, especially millennials who have migrated to the suburbs, are driving demand for convenience and immediacy. This shift necessitates a deep understanding of the end-user to ensure survival and success. Grissom also mentioned that Nuveen Real Estate had a record year in leasing, despite challenges in the full-service restaurant sector and the high costs associated with big box spaces.
Overall, the session underscored the resilience and adaptability of the retail real estate market post-COVID. Eric Smookler observed that both landlords and operators have emerged stronger, with the pandemic having weeded out weaker players.
The panelists agreed that a long-term view is essential for navigating the current landscape, which is characterized by high competition, significant capital inflows, and evolving consumer behaviors.
As the market continues to change, staying attuned to these dynamics will be crucial for investors and operators alike.
Fitness Event: A Workout with Planet Fitness
I wasn’t able to attend this one but heard really good things. It’s so nice having a fitness event to kick-start the day of dealmaking. Here are some pics I got from sub-committee member, Kass McInnis. And I believe it did not rain on, despite the scary sky.
This event was with National Lead Trainer, Teddy Savage, a rise and shine warm-up workout session. He moved the group through both a physical and mental mojo to increase strength, stamina, and endurance, and who doesn’t need that?!
Retailer Runway at the ICSC New England Conference 2024
Retail experts were brought together for the highly anticipated “Retailer Runway,” presented by Michael Branton, Retail Growth Strategist of Conviser Property Group. Michael served as the MC, guiding the audience through a series of presentations with one common family story that jumped from one retailer to the next based on their lifestyle and needs.
Retailer Runway participants included:
- Ace Hardware– Jason Hipskind, Corporate Vice President, New Business
- Aroma Joe’s – Dave Tucci, President & COO
- Celebree School – Chris Kelleher
- First Watch– Jordan Murga, Real Estate Manager
- Harbor Freight Tools – Bill Gerhardt, Director, Real Estate East
- Moxies Restaurants– Glenn Moon, VP of U.S. Development
- Panda Express– Dorothy Fleishman, Real Estate Manager
- The Fresh Market– John Harmon, CCIM, Real Estate & Development Manager
- The Picklr Inc.– Chris Walker, Chief Development Officer
- Saatva – Chad Lundeen, VP, Real Estate
- Volta Oil and MPG Corp – DBA/ Garrett’s Family Market– Peter Garrett, President
- World Market – Brian Crossen, VP of Real Estate
For those who missed the session or wish to revisit the presentations, the detailed slides are available on the ICSC website here: https://www.icsc.com/attend-and-learn/events/details/new-england-2024/presentations.
A huge thank you…
…goes out to Nadine Cunningham, DES, and Amy Ferrone at ICSC, as well as my fellow committee members: Travis Ginsberg , John R. Pariseault, Lindsay Corsino, Michael Branton, Retail Growth Strategist, Jill Szymanski, Barry Porter, Aaron Huntley, Matthew Nadler, Sam Kallmerten, Thomas Phillips, Jamie Sullivan, P.E., Kimberly Sluter, Kass McInnis, Chris McMahon, David Steinberg, and Scott Warner. Their dedication and hard work were instrumental in making this year’s show a memorable and impactful event. We look forward to bringing even more innovative ideas and opportunities to next year’s ICSC New England conference.
This recap was written by Diana Perry of Rumphius Marketing, a modern boutique marketing agency focused on modernizing, beautifying and growing commercial real estate related brands.
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7 Ways to keep your corporate culture healthy during COVID-19
Feeling the quarantine fatigue yet? I’m pretty sure we all are at this point. We miss our friends, family and (most of) our co-workers. It’s such a strange time and this crisis is truly putting us and our businesses to the test. We’ve gone from chats at the watercooler to a new fully digital workplace but being sure we all still feel connected is really important right now.
I’ve put together some ideas on how to keep your corporate culture strong while in quarantine.
Communicate often and make yourself available: By now we’re all pretty familiar with Zoom, GoToMeeting, Microsoft Teams, Skype, Google Hangouts, FaceTime, and maybe even HouseParty. Whichever video conference site or app your company prefers–make sure you’re meeting frequently. Sometimes one of the best things you can do is simply to listen as some staff have family suffering, are scared, frustrated, or sick of feeling isolated. It’s important for the team to feel a connection to the business and its values as a whole in order to keep up motivation and productivity. Because everything is still changing so quickly, plan a weekly video call with the entire staff – even if you don’t have much to say. Simply seeing everyone’s faces can be extremely uplifting. I’d suggest branding the call so that it’s more memorable – some ideas: Town Hall, Fireside Chat, AMA (ask me anything), Friday Findings…you get the picture. From a team perspective, have each manager reach out to their team members with a daily text to check in and see how people and their families are doing. This is a time where it’s perfectly acceptable and appreciated to over communicate.
Build on relationships: Some companies recently hired new staff and then COVID-19 hit, how challenging it must be to be new and still learning a company and your role in it and then be forced to stay home. Create some team bonding to help make those newbies feel welcome and learn more about each other. Some ideas include; start your call with what the best part of everyone’s day is so far, try show and tell with a story tied to a childhood toy, hold a “ballads and beers” meetup where each person submits a song and others have to guess who choose it – while drinking beer of course, play a silly game like two-truths-one-lie, or have your CEO share their quarantine Spotify playlist.
Show appreciation: If a staff member or even a department is going above and beyond, have the CEO make a personal phone call to say thank you. Send staff a surprise like flowers, Milkbar cookies or something from a tenant. Send a donation to No Kid Hungry or another nonprofit on behalf of an employee that participated on your recent call. Another idea is to reimburse employees up to $50/month if they get takeout from a tenant and share it on social media.
Encourage education: No matter what’s going on in the world, we can all benefit when from education. Make sure your staff is up to date on new happenings within your market, encourage them to attend webinars, start industry calls within their niche, and join the new ICSC virtual community.
Have fun! Just because we’re stuck at home doesn’t mean we can’t have fun. Switch things up every now and again and surprise the staff with a comedian one day on your Zoom call. Try TGIFriday’s with virtual happy hour where each member changes their zoom background to a favorite location or where they wish they were. Or, perhaps the best way to have fun is to implement summer Fridays and shut down the digital office early or better yet, four-day workweeks.
Provide a safe environment for when staff returns: Though we continue to push the date on physically returning to work, there is planning you can do now to get ready. Aside from the obvious cleaning and sanitation, add directional signage for walking paths that limit risk, drop a “Welcome back” bag on each desk with a note, antibacterial and maybe even a branded bandanna facial covering.
Fun Fact: Companies that exhibit a winning culture, that have a strong internal compass and inspire their employees, are, we have found, 3.7 times more likely to be business performance leaders. Source: Bain & company blog.
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