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.”