“Computers are useless. They can only give you answers.” – Pablo Picasso
Happy 4th of July to all! Boy when our founders signed the constitution do you think they could have imagined where we are at now? Of course, life changes and evolves. Who would have thought that the mechanical pencil company, “Sharp” would now be a giant electronic and TV manufacturer? Who would have thought that an online book seller (Amazon) would become the dominant retailer they are? What can we expect in the future from the like of Uber, Google, and Facebook. A few clues to ponder – Walmart Stores has dropped “stores” from it name. Microsoft has added AI (artificial intelligence) to its name and Google has dropped “don’t be evil” from its long-time motto (and the first thing they did is lie and say the didn’t change it. – Gizmodo 5/18/18).
The heck with “Fake News,” it looks like we might be moving forward in a “post truth” world. According to the infamously secretive Bilderberg elite (about 120-150 of the worlds political elite, industry, finance, academia and media), the most pressing issues in global affairs are:
- Populism in Europe
- The inequality challenge
- The future of work
- Artificial intelligence
- The U.S. before midterms
- Free trade
- S. world leadership
- Russia
- Quantum computing
- Saudi Arabia and Iran
- The “post-truth” world
- Current events
Well since I said I was going to write about it last month and seeing the Bilderberg elite list has it at #4, I guess it is important to address Artificial Intelligence (AI). Most of us grew up hearing that jobs will be replaced by robots. Well that time is here, and it is going to affect our jobs, our real estate and our bank accounts. Forty-seven percent of U.S. jobs could be automated in the next two decades. There is an 83% chance that workers earning less than $20/hour will have their jobs replaced in the next 5 years. Those in the $40/hour range face a 31% chance of having their jobs taken over by machine. Clearly, robots are coming!
Imagine what it might look like to a commercial real estate broker. You go to a website and type in your size, space requirements and financial and location parameters. Moments later a recommendation list and map are produced along with a virtual tour of each site. Market intelligence tells you what terms and incentives to expect (free rent, cpi, cap, etc.), you put in your bid along with an upload of your financial info, credit check and an intelligent assistant checks out your Linkedin and Facebook profile, Uber ride history and determines you have only a 2% chance of not fulfilling your obligation. It also determines that your business should grow to need more space in 3 years, but the space next door will be expiring then. It asks if you would like to pay now for an option or “buy it now” to lock in the space. You are asked if you need insurance, utilities transferred to your name, movers arranged. With all of the boxes checked, you summon your driverless Uber to take you to the golf course for some exercise.
Adapting to change is going to require us to understand how man-machine partnerships are going to evolve. HUMAN + MACHINE = FUSION SKILLS (or in Star Trek – Cyborg!). I like the quote, “AI – use it or be used by it.” If you would like an in-depth dive into the effects AI will have on commercial real estate, I highly recommend the following YouTube video.
If you don’t have time, here are the 17 real estate work flows in the crosshairs of AI;
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On average, it costs about $60,000 to replace a departing employee. Furthermore, it takes 3-6 months to get a new employee up to speed. Knowledge transfer of a departing employee is a difficult and typically not well documented process. How do you transfer experience, context and interpersonal relationships? I used to say, “I wish I could clone myself” so I could get twice as much done. Businesses are now looking at ways to use AI to clone you so as to retain a departing employee’s knowledge and experience and allow a new employee to come up to speed almost instantly (or completely replace said employee!). If you don’t think that’s realistic (and if you need an AI friend), check out Replika in the app store. You can upload text messages, social media posts and create you own chat bot who will text with you any time and not judge – plus your chat bot can stay around after you die and text with your friends and family…hmmm…
On the National front, I continue to worry a bit about the yield curve and the message it is sending (It is about where it was in 2007). Locally, inventory is continuing to absorb, new buyers are upgrading old buildings, rents are rising. I also notice more construction cranes in the sky (usually a sign of prosperity).
Well as real estate values rise, and you enjoy family pictures around the barbeque this 4th, just remember some things change, some things evolve but if you don’t want to pay an arm and a leg we’re here to help you with your real estate needs. Hope you enjoy the story…
In George Washington’s days, there were not cameras. One’s image was either sculpted or painted. Some paintings of George Washington showed him standing behind a desk with one arm behind his back while others showed both legs and both arms. Prices charged by painters were not based on how many people were to be painted, but by how many limbs were to be painted. Arms and legs are “limbs,” therefore painting them would cost the buyer more. Hence the expression, ‘Okay, but it’ll cost you an arm and a leg.’ (Artists know hands and arms are more difficult to paint).
