Real Estate Markets & Demographics - Technology and the Internet Effect on Real Estate

On a macro level, RE execs are not calculating the affect of technology and the internet on the asset class. Included are a few examples i.e.;

1) Turmoil in the selling of books. When Amazon started selling books over the internet it was a switch from pricey retail real estate in urban/suburban areas to industrial warehouses in semi-rural areas. A net decline in SF I am sure also occurred. When they introduced the Kindle - their e-reader - no longer need as much warehouses to store the books or industrial space to print the books (printers, binders, etc;)

2) The media industry – Newspapers and magazines are being delivered on the web and on the Kindle – the needs of office space, printing plants, warehouse distribution are significantly reduced. Demand for retail space will also be reduced - i.e; the magazine stands.

3) The recording music industry –Like book publishing has made a similar transition - from expensive retail locations to websites to electronic delivery of the music i.e.; Apple Itunes,

4) The distribution of event admission tickets – Broadway shows, baseball tickets, concerts are all being delivered electronically.

5) Cloud computing and the creation of virtual data centers. From corporation's office space and back office space to massive data centers, some of it outsourced. Will also result in a negative decline in total RE utilized.

6) Record Storage - the paperless office - i.e; Many medical offices are scanning in their documents which takes up signficant amounts of space in their office. This is freeing up space for more examining rooms or they are reducing their needs.

For these companies and other industries it will be necessary for the real estate executives to parse the growth in these companies' real estate needs vs their business on the web-based or what they can deliver electronically.