Commercial real estate brokerage and management company Cushman & Wakefield has joined the likes of Amazon Web Services, Booz Allen Hamilton, Deloitte, Hitachi, Microsoft, Prologis, and Visa by participating in Stanford University’s Disruptive Technology and Digital Cities Program, a collaboration aimed at identifying, developing and launching transformative technologies within the commercial real estate space. They hope that this will help them identify some of the most advanced technologies that can be applied to their property business in a program by participating in research and meeting with faculty regularly to share industry developments.
Research and development numbers for commercial real estate have been a topic of conversation lately, as commercial real estate companies lag behind most other industries. But, according to Michael Steep, Adjunct Professor and Executive Director of the program, it isn’t the only industry to see a decline in research. “Corporate R&D funding worldwide has been declining with the mix increasing on applied research while outside venture and other monies now exceed total corporate spending,” he told us recently.
So, how does he plan to bridge the gap between the two very different cultures of academia and commercial real estate? “We identify commercially viable disruptive technology from the 400+ labs at Stanford then match them up to our 27 corporate affiliates to create a possible monetization opportunity. We create a business model then help the corporate affiliate member figure out a strategy. The Stanford faculty then get research support and market feedback.”
While many universities are more interested in grant funding or alumni donations, Stanford seems to have a very “private sector” view of their role in real estate. When I asked him what his organizations metrics for success are Steep told me that, “Funding and acquisition of technology that gets applied in a big way to change a corporate model. We have three startups financed already and have identified entirely new business models for different industries. In the end, monetization will be the key metric.” That certainly sounds like it could have been plucked out of a VC’s press release.
Echoing that point when I questioned him about what technologies, in particular, his team was excited about he said, “We cover everything from advanced material sciences to persuasive technology. We have no one are of excitement. We prioritize on understanding how the industry business model will be disrupted. Financial ROI is top priority in selecting the technology of interest.”
Large firms working with Universities to bring some of the top technological talents to the real estate industry is a good sign of a maturing industry. Even the biggest companies are starting to learn that choosing technologies requires a huge amount of expertise and is often best done with a technology partner. Now we will see if the academic partnership model gets duplicated by other big firms and if the research landscape for the commercial real estate industry will start to more closely resemble other profitable industries.