Is human experience the top driver of asset value today?

How peo­ple are chang­ing the face of real estate 

The arti­cle rep­re­sents sub­jec­tive opin­ions of Hines, the spon­sor of invest­ment vehi­cles offered by Hines Secu­ri­ties. Oth­er mar­ket par­tic­i­pants may rea­son­ably have dif­fer­ing opinions.

It appears the tra­di­tion­al decades-old dri­vers of com­mer­cial real estate asset val­ue are final­ly shift­ing. Hines believes finan­cial fun­da­men­tals and day-to-day man­age­ment prac­tices are con­verg­ing around the human expe­ri­ence, and investors and own­ers must find inno­v­a­tive ways to blend space with ser­vice. Hines believes cre­at­ing a peo­ple-cen­tric envi­ron­ment focus­ing on human needs and envi­ron­men­tal sus­tain­abil­i­ty may con­tribute to a healthy bot­tom line.

Managing experiences, not just properties and facilities 

The four pri­ma­ry func­tions of most com­mer­cial real estate orga­ni­za­tions — invest­ment man­age­ment, asset man­age­ment, prop­er­ty man­age­ment and facil­i­ty man­age­ment (the four ​“Ms” of man­age­ment) — have for decades pro­vid­ed those orga­ni­za­tions with a pre­dictable play­book for achiev­ing finan­cial performance.

But the expe­ri­ence of peo­ple rarely fac­tored into the big­ger pic­ture of asset value.

Now, with a pal­pa­ble shift in the expec­ta­tions of cor­po­rate occu­piers and their employ­ees, Hines believes it is time to put humans at the cen­ter of it all. Real estate can – and should – cre­ate val­ue beyond the eco­nom­ics of rent.

“Every space needs to enhance people’s lives, fos­ter cre­ativ­i­ty and well-being,” said Ronen Journo, Hines senior vice pres­i­dent of man­age­ment ser­vices in Europe. ​“Build­ings are phys­i­cal assets – and cost, loca­tion, and invest­ment are all key con­sid­er­a­tions – but deliv­er­ing for peo­ple is the dri­ving force behind work­ing and liv­ing in the future.”