18 May 2017

Industry Leaders Focus on ‘Disruptors’ Changing the Industry at IREM SoCal Conference

IREM-SoCal-PanelThe Orange County chapter of the Institute of Real Estate Management (IREM) hosted its 27th-annual Southern California Real Estate Conference and Trade Show on May 11 at the Hilton of Orange County in Costa Mesa. The one-day event welcomed a capacity crowd of nearly 300 property management professionals and industry vendors.

Highlighting the event were two educational sessions providing a mid-year economic forecast by Dr. Mira Farka of California State University Fullerton, as well as a sector-specific panel focusing on disruption in the marketplace.

Moderated by George Meyer, Vice President of Operations for Irvine Company, “Working Through Change” featured a panel of executives representing the retail, office, industrial and multifamily sectors. Panelists, including Coreland President Chris Hite, Granite Properties Managing Director Tom Miller, Goodman National Director of Asset Management Mike Kent, and Equity Residential Executive Vice President Barry Altshuler, focused on market trends and business strategies to navigate ‘disruptors’ we face professionally and personally.

“When we started this discussion we framed it as ‘disruption’ because disruption is more than ‘change.’ A disruptor is something that fundamentally alters the way things are done, and this is what many factors our forcing us to do today,” shared Altshuler.

As one of the “most disrupted sectors,” Meyer asked Hite to begin the discussion with an overview of challenges in the retail marketplace.

IREM-SoCal-Panel_2“Yes, the internet, among other factors, has indeed created disruption in the marketplace. As an industry we are actively trying to figure out what is a healthy tenant mix for brick-and-mortar destinations. However, you see new strategies every day from retailers trying hard to keep the customer engaged. Walmart is a prime example, having recently announced that it would start discounting merchandise bought online and picked up in store, incrementally increasing sales value. Seems like a no-brainer and I’m not sure why it took so long.”

“Industrial ‘box’ tenants are equally challenged with trying to keep up with technology. We have clients preparing for the day a blimp serves as the next warehouse, drones as delivery service and driverless trucks transporting goods. We must be evaluating how these change will affect all segments of our business,” shared Kent.

California legislation and its impact on small business was also a significant part of the discussion. Panelists urged the industry to stay informed and involved regarding issues such as split roll taxes, stringent rent control, minimum wage increases and large gasoline taxes.

“We have incredible talent, technology, transportation and diversity in this state,” commented Miller. “There is a lot of entrepreneurship, and entrepreneurialism supports small business. We have to protect that.”

While discussing various distruptors, including drones, Uber/Lyft, driverless cars, Airbnb and online retailing among others, Meyer concluded the discussion by asking if any of these should be cause to “freak out.”

Hite began by sharing: “The real estate industry has always been slow to respond to change, but I also think it’s because fundamentally (property management) jobs are not about apps – they are about people. Our jobs are not to collect data, but to look beyond the numbers and figure out what they mean. Be encouraged that there is a role for you and retail, for example, is not dead… it’s just changing.”

“One of the best investments you can make is when you make what you have better,” said Altshuler. “No matter the disruptor, you must stay educated to be able to pivot. Today’s Airbnb will be something else tomorrow. You have to learn to deal with disruptors and figure out how to work with them.”

For more information on the conference, visit: http://iremocconference.org/.

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