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Jim
Young, the CEO of RealComm (www.realcomm.com)
is a man on a mission. He puts on trade shows,
seminars and best-practice tours devoted to the
application of technology to the commercial real
estate sector. The United States, he warns, is
losing the race for technological supremacy, and
nowhere is the decline more evident than in
commercial real estate. “Network of Space”
caught up with him earlier this month, and he gave
us an earful. If you’re looking for happy talk,
skip this interview and move to the next story.
NoS: You’re very worried, aren’t you?
JY: When we came back from China in early 2004,
I wrote an article for our newsletter (See How
High Will Oil Go? ). The world produces 84
million barrels of oil per day. The U.S. uses 25
percent, and we’re just 300 million people. China
is four times bigger and uses five million barrels a
day, and a massive economic expansion is taking
place there. The question I ask is, when the price
of oil hits $100 per barrel, what happens to the
value of your building? The whole reason we built
office buildings originally was so a lawyer and
banker could be in close proximity when they needed
to sign a contract. It’s almost insane how we live
our lives today. We drive to work, work in an office
building and make phone calls to people around the
world. Less than one percent of people in that
building have cause to do business with other people
in the building. Why burn all that gasoline driving
when you could work just as well from home? Why heat
and air-condition all those big buildings? What a
drain on productivity!
The next 10 years are going to be difficult. The
perfect storm is coming together.
NoS: You say that owners and operators of
commercial buildings in the United States are
falling behind in the application of technology.
Which countries are ahead of us?
JY: Which countries aren’t ahead of us? There
are a handful of innovators in the United States but
the average small developer is building a product
reminiscent of 1985. Go to the Middle East and Asia
and you see digital signs in the lobby, escalators
that turn off when nobody’s using them, and
paperless lease transactions. The list goes on and
on.
It’s not just commercial real estate. We’re far
behind in everything. Go to South Korea, Shanghai,
Singapore, Dubai – see what people are doing.
Medical electronic records. Paying for soft drinks
with their cell phones. Wireless transactions at
parking lots – no paper tickets. Electronic fund
transfers. I know a guy from Finland who laughed
when he came to the United States – Europeans
haven’t used paper checks in 20 years.
In Korea kids go to school at 6:00 in the morning to
7:00 at night. Take an American “A” student in
4th grade, that’s the equivalent of a 2nd grader
in Korea. What do we do in the United States but
manage the wealth created by our parents and
grandparents? We don’t even know what we don’t
know. We’re at a beach drinking margaritas.
NoS: What technologies, in your estimation, offer
the greatest potential Return on Investment in the
real estate field?
JY: Conceptually, there are three groups: First,
automated work order maintenance and electronic
lease submission. Second, building automation of the
infrastructure – getting everything onto the
Internet, managing one network from a central
location. Third, general technologies, like using
Google Earth before you jump on a plane to visit a
place.
NoS: What potential do you see for tele-work and
hoteling?
JY:: Huge. It’s going to become mainstream.
The timing is right. We’ve got this big motivator
coming behind us calling $100 oil. This is not like
the telecommuting experiments of the late ‘80s,
early ‘90s. They were failures. The motivation
wasn’t high enough, the technology wasn’t good
enough. But there are a lot more people working from
the home now. You’re going to build that telework
center and get four or five employees to share that
facility five minutes from their homes. They’ll do
videoconferencing with other workers.
Videoconferencing is going to be huge in this.
RealComm has a meeting Monday. One of our people is
in D.C., one is in Raleigh. It’s not important
enough to fly them here. We’ll connect with
Microsoft Messenger and an $80 video camera.
You need to find your employees’ proximity to the
office, calculate the miles they drive and gallons
of gas they consume, then multiply times $1.50,
$3.00, $4.50 per gallon. There’s a financial
impact to the employee. Unless they’re teleworking,
that cost will get passed to the employer one way or
the other.
NoS: If you don’t mind us asking – we’re
not asking for endorsement – but what do you think
of AgilQuest’s idea of tracking capacity
utilization?
JY: One hundred dollar-per-barrel oil is the
best thing that will ever happen to John Vivadelli.
I can’t wait until I see gas at $6 a gallon! How
can we afford to maintain buildings at 50 percent
utilization during the work week? Don’t forget,
buildings are empty most of the time. Add it up:
eight hours of work out of 24 hours in a day. Five
days of work out of seven in the week. Overall,
we’re getting about 25 percent utilization out of
our buildings. Yet we have to cool heat them, cool
them and light them. As energy costs go up, this
isn’t going to be an option.
NoS: Compared to other countries, how well do you
think the U.S. will respond to the challenge of
$100-per-gallon oil?
JY: Well, with cheap oil going away,
everything’s going to change. The good news is
that, even though the U.S. isn’t innovative
technologically, it is adaptable. In China, with its
authoritarian culture, you have to put people in a
place where you can manage them. And the homes are
so small, people can’t work out of them. Tele-work
isn’t as attractive to them as it is to us.
It’ll take us a couple of years to figure out, but
the message is getting through.
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January 22, 2007
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