March 31, 2020
Several months ago, I was interviewed for this article, Threats to CRE, for the spring 2020 edition of the SIOR Report magazine. My, how times have changed. Since then, the entire world has effectively collapsed due to the COVID-19 Pandemic, the economic machine has ground to a halt, and even prior, WeWork was on the verge of total collapse.
In some ways, this article rings truer for me now more than ever, at least from the vantage of our boutique firm. In preparation for the interview, I thought a lot about the different challenges our firm faces, and the clear winner was technology. From our view, technology is not going to render our advisory services useless by employing bots, though a few apocalyptic theorists disagree. Rather, we feel the need to have data, tools, and analytics, and the costs therein cause us concern. Technology is RCR’s second largest operational line item and it is consistently more expensive than the per-user cost of other companies we work with.
Interestingly, as everyone works from home during quarantine, technology is more important than ever. Just take a look at the tech stocks and Zoom’s [conferencing calling platform] stock price! That said, we are in an environment where every company has to be extremely prudent in their operational expenses, or they risk not surviving. At RCR, we have quickly slimmed our costs to the essentials, though technology remains a challenging expense to minimize. Though I do not see that changing, I am hopeful that this lesson – which affects our entire industry – will open the door for fairer cost structures, better software, and a more consumer-friendly environment.