The built environment reflects culture which is constantly changing. The central question in my mind is, “How is real estate changing in light of significant culture shifts, especially when those shifts are accelerated by new technology?”
First, a little history to provide context. The broad categories of Western thought can be broken down into understanding and thinking. People have different relationships to authority, faith, and work at different times. For example, people viewed themselves as a person during the medieval period. Their community members Instead of as individuals. This was reflected in the built environment, which featured larger-than-life structures that pointed to a greater power and smaller individuals.
This view was not the Renaissance’s. It was replaced by a more positive one. Humanistic perspectivea critical attitude towards institutions and a preference for individualism. Architecture, such the Medici Palace of Florence, reflected this, with intricate details entwined in larger-than-life structures that infused both the secular and the sacred. The built environment became an art form that showcased the power of human capability.
Later, Enlightenment thinking shifted further toward the individual. Rational change, progress, separation of church & state became possible. Principal themes. My understanding of this period shows that real estate became more individualized, but also functional and practical. Individual spaces were created for different types of work. The built environment was simplified as more common structures became popular, reflecting a modernizing economy.
We are witnessing a shift. “Make it new” was the calling card for modernism, the era I believe we are in the process of leaving, which ushered in an optimistic view of human potential clearly visible in buildings like the Guggenheim Museum in New York City. There seemed to be certainty about objective truth and belief that reason is a powerful tool for understanding the world. The future was full of possibilities and society was constantly improving.
Real estate responded by offering practical solutions that were often based on technology (the means for production). Office towers were transformed into inspiring sculptures of art that changed the skylines. There was also a strong emphasis on productivity and practicality in the built environment. People measured real estate’s success on productivity and transactions. A lease contract was the foundation of an entire industry. Everything was measured, priced, and defined.
I believe that this era is almost complete and is giving way to postmodernism. While postmodernism has been portrayed as having taken hold in the 1960s I see the shift just beginning in buildings such as Markthal in Rotterdam. There’s been debate that if modernism was optimistic, then postmodernism is pessimistic.
There is a lot of cynicism about science and society, as well as the idea that society is improving. However, there is an increasing emphasis on the negative side of many advances. There seems less desire to get bigger and better and more focus on sustainability and balance. The zeitgeist has shifted to a new value of experience over accumulation.
Based on my perspective, real estate is becoming less about productivity or what it offers a city’s skyline and more about how a person feels while in the space. I believe that spaces that encourage creativity and help people thrive will be more valuable than those that maximize output and efficiency.
So what does this mean in terms of real estate in a postmodern age? Here are my predictions
1. Trust is a commodityBlockchain as a technology (with crypto- and NFTs being its applications) will commoditize the trust landscape in real estate investing and leasing. Blockchain will eliminate the trust gap that has, in many ways historically, defined the space.
2. Experience versus practicality: Real estate will be judged more on how the person feels in a space than on how practical and efficient it actually is. Technology has made it easier for workers to seek out the most productive locations. This will be more important that the number of employees per square foot. This will be possible only by allowing the metaverse to raise the bar for what in-person will have to add.
3. Blurring of lines The lines between home, work, and play will continue to blur, affecting the traditionally separate investment allocations made among the office, industrial/logistics, and living/housing sectors. It is crucial to view real estate opportunities holistically.
4. Decarbonized economyThis is a great opportunity for business, as the built environment is known to be one the largest contributors to blind spots and blind spots on the market. Tech-enabled solutions will be developed to this problem.
5. Public-private partnerships: The tension that existed between these two groups in relation to the built environment will diminish as more attention is given to solving the growing problems cities face. It is likely that players who can better work with civic leadership are the winners.
David Steinbach – Global Chief Investment Officer at Hines
