real estate ?sells? square feet. what are investors and tenants buying ...

Posted on | November 29, 2012 | No Comments

This is a good time to challenge our assumptions about what the world will be.?In mid-October of 2012, the executives of NAREIM member firms gathered in Chicago?to discuss changes in capital, operations and real estate usage likely to profoundly?affect the industry for many years to come.

Consider a simple question, ?Are you selling what your customers are buying??

To illustrate the importance of this question, consider what happened at the turn of the?20th century when the music industry was selling CDs, cassette tapes and records. Not?understood by that industry, however, was that their customers were only buying those?products in order to acquire what they actually wanted: songs. In 2000, the global music?industry enjoyed sales of $36.9 Billion. But in 2003, Apple Computers introduced iTunes?to sell individual songs on-line. In 5 days, they sold a million songs. By last summer, they?had sold 15 billion.

By 2010, the music industry?s sales of records, casettes and CD?s was less than?$16 billion. In other words, in less than 7 years, they lost over half of their business to?a competitor that wasn?t even on the radar. As tempting as it might be to look down?on the music industry for not taking the Internet seriously, it?s important to note that?commercial real estate could be just as vulnerable to this kind of existential threat.

Commercial real estate is an industry that sell reliable returns to investors and square feet?to tenants. But is that what investors and tenants are actually buying?

To find out, read the full report, by clicking here.

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Source: http://www.bransonpowers.com/?p=668

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