December 21, 2019

WeWork, Millennials, CRE, and The Modern Workplace

Millennials are changing how companies use office space. WeWork is addressing these changes, and the rest of the CRE industry should take notice.

My name is Kurt Chisholm and I am the Founder and CEO of LeaseUp, a platform providing sales and marketing tools to help commercial real estate brokers complete transactions faster and more efficiently.

By 2025, Gen-Y, also known as millennials, will make up 75% of the workforce. As they have taken over the direction of modern companies, they have changed the state of work, and their effect on the commercial real estate industry can’t be ignored. Companies today are seeking a new type of office space, one that reflects their corporate culture and social consciousness, blends worklife balance, and helps attract and retain millennial talent. This has had a widespread effect on the CRE industry, and helped fuel co-working and the general ‘space-as-a-service’ trend (I consider PropTech luminary Antony Slumbers’ series on ‘Space-as-a-Service’ required reading on the topic). WeWork has tapped into the workplace needs of millennials at nearly every turn, and it is part of the reason for their massive growth. Where they have succeeded in addressing the changing needs of clients, the commercial real estate industry has fallen short. Below highlight some of the fundamental needs of the modern workforce, how WeWork has addressed them, and how the brokerage industry can adapt to keep up.

Mobile-first experience & Immediacy

Millennials are the first generation to grow up alongside technology. It is therefore critical for businesses to design platform relevant, intuitive, and contextual mobile-first experiences. Companies not doing so are catering to the wrong generation and will see their products and services mirror the declining percentage of decision makers making up their current product target audience.

How WeWork addresses this:

WeWork’s entire platform is mobile first. Booking desks, rooms, events, all are mobile and at your fingertips. WeWork highlighted their mobile capabilities on the first page of their recent S1, indicating the importance they place on it to their overall offering to and highlighting how it provides value to member companies:

“Our WeWork app enables our members to easily book space, connect with other members for advice or services and discover events and activities. To create the best member experience, we strive to pair human judgment and creativity with algorithms that amplify ideas quickly and globally.”

How Brokerage can adapt:

The brokerage community has a long way to go to transform itself into a mobile first experience. Tenant experience platforms such as HqO and Lane are beginning to bring this to tenants occupying space. The brokerage community is responsible for advising clients on their next office opportunity. This information should be funneled through mobile first experiences, allowing clients to access this information instantly and share it freely.

A selfish plug: LeaseUp will help brokers modernize their leasing process through client facing mobile first experiences.

Hyper-personalized experiences & Socially Conscious Employment

The biggest differentiator between Gen-Y and previous generations is their craving for hyper personalized experiences. Millennial workers want to be recognized, valued, and provided custom solutions to suit their individual needs.

Millennials also want workplaces with social purpose. 81% of Millennials expect companies to make a public commitment to good corporate citizenship, 91% of Millennials would switch brands to one with a cause, and 40% of Millennial employees would take a pay cut to work for a company practicing sustainability. Companies not putting social responsibility at the forefront of marketing and business practices stand to lose out as millennials increasingly take over decision making positions.

How WeWork addresses this:

All of WeWork’s branding, design, and mission are geared toward social responsibility and individuality. Look no further then their mission statement provided on their recent S-1 “We are a community company committed to maximum global impact. Our mission is to elevate the world’s consciousness”. It’s directness and grandeur may border on pandering, but it displays the depth to which they understand the importance these two pillars hold on their company’s future success in attracting clients.

How Brokerage Can Adapt:

What brokerage firm has a socially conscious mission at the forefront of its branding and marketing? None come to mind from this end. The data presented above is significant in value, millennial clients will choose a different real estate partner if it perceives a lack of social awareness. From this perspective, a fundamental shift in the nature of the industry must take place. Brokers themselves must adopt a new vantage point for their businesses, away from “block and tackle” lease transactions to a more holistic, full service advisory approach.

Final Thoughts

WeWork is not just a plug and play space for companies, it is a plug and play “SPaaS”, allowing its members to absorb the sustainability practices, social consciousness, and personalization provided by WeWork’s design and product offering that is so craved by millennials today. Someone belonging to a WeWork space belongs to the WeWork community, giving them a sense of community, individuality, and purpose. This is the biggest piece of value WeWork brings to its members.

The brokerage community must examine the wants and needs of the millennial and Gen-Z generations, and adopt new business processes and practices to keep up with these changes today. This is important not only for brokerage firms to maintain client relationships, but should be a focal point in attracting and retaining millennial talent for their own organizations.

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