Categories Narrative, Tech Industry

World’s First AI Lawyer Hired

Artificial Intelligence (AI) used to be the stuff of science fiction. But today, it’s becoming a rapidly-evolving technology with massive implications for many industries. Below is an article about the world’s first AI lawyer.  Why would this make me think about commercial real estate?  We represent a large number of law firms. (Check out our Law Firm Experience.)  This is a game changer for them in terms of space allocation.  

Outside the reduction of space, I have many questions: 
– How will billing change?
– If it takes an AI lawyer 1 hour instead of 10 to do the work, how will that disrupt the system in terms of the number of clients a firm can handle? 
– How many firms will go under? How many will shrink?
– What will the new desired skillset be for lawyers?

I look forward to watching and working with our clients as these questions get answered. We are just now thinking about it. Call me to meet and kick this concept and the ramifications around. 

Craig
602.954.3762
PS- Andrew moderated a panel on the “Office Of the Future” at the SIOR World Conference in New York last week. If you want to hear more about it, or see some of his slides, I would be happy to share.

Artificially Intelligent Lawyer “Ross” Has Been Hired By Its First Official Law Firm
Futurism 2

stock-photo-abstract-character-shattered-into-pieces-298266413

ROSS: A VERY SMART ARTIFICIAL CO-WORKER

Law firm Baker & Hostetler has announced that they are employing IBM’s AI Ross to handle their bankruptcy practice, which at the moment consists of nearly 50 lawyers. According to CEO and co-founder Andrew Arruda, other firms have also signed licenses with Ross, and they will also be making announcements shortly.

Ross, “the world’s first artificially intelligent attorney” built on IBM’s cognitive computer Watson, was designed to read and understand language, postulate hypotheses when asked questions, research, and then generate responses (along with references and citations) to back up its conclusions. Ross also learns from experience, gaining speed and knowledge the more you interact with it.

“You ask your questions in plain English, as you would a colleague, and ROSS then reads through the entire body of law and returns a cited answer and topical readings from legislation, case law and secondary sources to get you up-to-speed quickly,” the website says. “In addition, ROSS monitors the law around the clock to notify you of new court decisions that can affect your case.”

Ross also minimizes the time it takes by narrowing down results from a thousand to only the most highly relevant answers, and presents the answers in a more casual, understandable language. It also keeps up-to-date with developments in the legal system, specifically those that may affect your cases.

THE LEGAL INDUSTRY ENHANCED

AI Lawyer Video 2

Baker & Hostetler chief information officer Bob Craig explains the rationale behind this latest hire: “At BakerHostetler, we believe that emerging technologies like cognitive computing and other forms of machine learning can help enhance the services we deliver to our clients.”

“BakerHostetler has been using ROSS since the first days of its deployment, and we are proud to partner with a true leader in the industry as we continue to develop additional AI legal assistants,” he added.

c2-webbutton-Share-04
Categories Economy, Narrative, Office Market

Metro Phoenix is Getting Better…Slowly

Steady net absorption (more space being leased due to job growth) continues to chip away at Metro Phoenix’s office vacancy as we head into Q4 2016. This quarter, Phoenix benefitted from medium-sized companies expanding. We hope these companies continue to grow. The metro Phoenix office market is on pace to perform roughly the same as 2015, i.e. just above average.
 
The market experienced 845,000 SF of net absorption in Q3, lowering vacancy down to 18.6%, and closer to equilibrium levels of 15% – 17% (neither a Landlord’s nor a Tenant’s market). What does this really mean?  It means there are hot spots across the Valley, like Tempe and South Scottsdale, where vacancy is in the single digits, and it’s tough to find Class A space for less than $30/SF/YR.  It also means there are areas like Midtown Phoenix and the Superstition Corridor starting to see more leasing activity due to their discounted pricing and large availability of space. Most importantly, it means that Metro Phoenix is doing well.  Local businesses here are growing and out of state companies are relocating here to take advantage of the great resources Arizona offers.
 
Below is a link to our Lee & Associates 3rd Quarter Report and as usual, I’ve included my top takeaways below:
 
1.       The Camelback Road Corridor Comeback- After being negative over the past several quarters, the Corridor finished 2nd in net absorption this past quarter, only behind Tempe. The demand for Class A space with tons of amenities has resulted in the highest average asking rates in Greater Phoenix at $30.14/SF/YR
2.       Spec Construction Doing Well- In addition to the build-to-suit projects, there are eight speculative projects underway. They all have great activity.
3.       Substantial Renovation Construction- In an effort to appeal to today’s tenants, there are four projects totaling 827,000 SF, all undergoing major renovations, all near Tempe and the airport. 

While this quarter saw minimal large (100k SF and bigger) leases executed, there are a number of large users in the market today which will help us finish 2016 with strong momentum. If you have a question on your lease, want to find out how much your building is worth, or just want to talk about the market, please give me a call.

AC for VR

602.954.3769
acheney@leearizona.com

P.S.- This October, Lee & Associates AZ is celebrating our 25th Anniversary. Coppola-Cheney is proud to have been here from the start, and we look forward to what the coming years hold. 

25th Anniversary - Post Card_WEB 2  25th Anniversary - Post Card_WEB2

Click Here to Read the Full Office Market Report 

Q3 Report

c2-webbutton-Share-04

Categories Narrative, Tech Industry

Where VC Money is Flowing For CRE Startups

Despite a drop in funding, tech startups are still disrupting the market at a fast rate. Below is a great article highlighting the biggest disruptive startups in commercial real estate. Read on to see what segments of the market VC money is flowing to. 
 
Not totally surprising, the tech market is down from 2015. Though there was $25.5 Billion globally in VC funding in the first quarter of 2016, it was still a drop in funding from the previous year. This information comes from the KPMG and CB Insights’ Q1 2016 VC report, which highlights the latest trends in venture capital funding globally. (Click here to read the entire report.)  

 
Some reasons why funding is down:
  1. Investors want more information and protection.
  2. Early-stage companies need a stronger business plan now more than ever.
  3. Late-stage companies are shifting their focus towards sustainable operational improvements rather than growth.
There is now even a tech company that actually completes the entire real estate transaction…online. We believe you still need a broker to represent your interests. We are the best in class and would love to handle your renewal or relocation. Give me a call today. 
Craig
602.954.3762

Office Space: 53 Tech Startups Reshaping Commercial Real Estate

The commercial real estate tech market map spans emerging categories like data analytics, investment, and property-management software, among other categories.
May 10th 2016

In May 2016, leasing- and asset-management software startup VTS raised one of the largest financing rounds for a commercial real estate tech startup to-date, a $55M Series C financing led by Insight Venture Partners. The commercial real estate tech startup industry isn’t as large as the residential real estate tech scene just yet, but it’s certainly growing.

Using CB Insights and analytics, we identified 53 startups working in commercial real estate tech, and categorized them into a market map spanning key emerging categories such as analytics and crowdfunding platforms.

As noted in other real estate tech posts, our real estate technology category encompasses all the software tools and platforms used by different participants in the real estate industry, including brokers, investors, real estate-focused lenders, commercial property owners and managers (including multi-family buildings), as well as buyers. The category includes online real estate-rental and -buying guides, but excludes startups primarily focused on in-building services, e.g. office management.

Some startups span both the commercial and residential real estate markets.

Click here to enlarge map.

Listing & Search Services – This was the largest category in our market map, and includes startups that help users search for commercial real estate. This section includes 42Floors, which has raised from the likes of Bessemer Venture Partners and NEA, among others.

Marketplaces – This category helps match commercial real estate buyers with sellers, among other services, and includes startup VivaReal in the section. VivaReal focuses on Latin American markets, and has raised $61.7M to date.

Virtual Viewing – Startups that provide virtual property viewing, i.e. the opportunity to use cutting-edge tech such as 3D video to view properties remotely. Companies attacking this area include Matterport, which has raised over $58M to date. Some backers of theirs include Rothenberg Ventures, Greylock Partners, Felicis Ventures, and Qualcomm Ventures.

Tech-enabled Brokerage – One of the smaller categories in our map, startup here employ in-house brokers with their own listing services. This category includes TheSquareFoot, which raised $2.1M to date and counts RRE Ventures and Primary Venture Partners as backers.

Leasing-Management Software – Companies that provide tools to brokers and owners and streamline the leasing process, among other things. Companies in this space include the aforementioned VTS, which has raised over $85M to date.

Data, Valuation, and Analytics – This was one of the larger categories in our market map and includes Reonomy, which does commercial real estate analytics and has raised over $40M to date. The map also includes other well-known commercial real estate tech analytics startups like Compstak and Honest Buildings.

O-2-O Services – Companies here are primarily Asia-based online-2-offline (O-2-O) businesses where users complete their real estate transactions online. China-based Haozu.com is the only startup in this category and has raised $39M in financing to date.

Mortgage Tech – this was a large category in our residential real estate tech market map and we suspect more companies will emerge in the commercial real estate mortgage space in the coming months. The category includes peer-to-peer commercial mortgage lender Fruitful Finance as the sole company in the section.

Property/Building Management – These startups offer tools for property managers, landlords and tenants. Startups here include ClickNotices which helps landlords manage late rent payments and has raised $2M of disclosed funding from Super G Funding, Sopris Capital Associates, and Westlake Ventures.

Investment – One of the largest sections on our market map, the category includes crowdfunding platforms that allow investors to participate in debt or equity financing for commercial real estate, or both. Cadre, which has raised over $67M to date, connects investors to commercial real estate opportunities.

Property Information – Startups providing information and data-driven insights about commercial properties; Real Matters has raised over $127M from various investors, including Whitecap Venture Partners.

c2-webbutton-Share-04

Categories Narrative

American Malls Are Changing

With recent massive growth in online shopping, retailers are making drastic changes to their in-store strategy. Currently, one-third of all malls cannot afford to pay for just the maintenance of their properties. This is causing a huge shift in how tenants change their value proposition.
 

– Brands are putting more of an emphasis on in-store experiences.
– Tenants are converting space that was once used for merchandise to areas for social and physical activities.
 

It’s working. For some of these tenants, revenue has doubled and customer/brand loyalty is way stronger. Below is a good case study on Bandier, one of those tenants who has made drastic changes to their in-store strategy.

Want to know more about how to utilize your space in a creative way? Give me a call.  

Craig
602.954.3762

In the Graveyard of American Malls, Bandier is Re-Imagining the Brick-and-Mortar Store
Retailer Bandier created a space where people could hang out, take a barre class, and grab a juice. Buying yoga pants is an afterthought.
By Elizabeth Segran
 
http://www.fastcompany.com/asset_files/static/logos/fastcompany/fc-fb-icon_big.png
June, 2016
<p><a href="https://www.bandier.com/" target="_blank">Bandier</a>, the two-year-old upscale activewear boutique, has recently put its own spin on the hybrid store.</p>

America’s malls have been dying for years. Of the nearly 1,200 enclosed malls in the U.S., one-third are doing so poorly that they aren’t generating enough money to pay for the maintenance of the structures themselves. Part of this decline can be traced to the Internet. Now that consumers can easily buy products online, brick-and-mortar retail stores can’t afford to simply serve as showcase rooms, only to see visitors buy the very products they offer from Amazon at lower prices. They need to offer exceptional in-person experiences to keep customers coming, buying in, and returning to their stores.

In the midst of this graveyard of malls, new retail concepts are emerging. In New York, for instance, there’s been a rise in multi-use stores. At Molasses Books, you can leaf through coffee-table books while drinking a beer. At Community 54, you can play vintage video games while buying mens’ streetwear. At Blind Barber, you can get a cocktail before you get a shave.

Bandier, the two-year-old upscale activewear boutique, has recently put its own spin on the hybrid store. At the start of this year, it opened a three-story, 10,000-square-foot store on Fifth Avenue. However, only the ground floor contains racks of apparel and sneakers for sale. The entire mezzanine is a lounge space for customers to hang out, listen to music, and attend events or concerts. Go up another flight of artfully graffiti-tagged stairs, and you’ll arrive at Studio B, where well-known fitness instructors from the city, such as Nicole Winhoffer and Akin Akman, offer yoga, barre, boot camp, and dance classes for a fee.

In the middle of New York Fashion Week, on some of the most frigid days New Yorkers had experienced all year, hordes of well-dressed people were looking for some respite from the cold in between shows. And while many flocked to trendy coffee shops and hotel lobbies, a few hundred congregated in the Flatiron district at Bandier’s newest retail location, which specializes in designer yoga pants. The second floor of the building had been decked out with mats and pillows for people to meditate. Throughout the week, different DJs and yoga instructors were brought in to the space. Customers mingled over drinks from the Butcher’s Daughter cafe, which had set up a temporary juice bar.
 
http://b.fastcompany.net/multisite_files/fastcompany/inline/2016/04/3058697-inline-i-1-bandier-studio-time.png

“Our goal is not to make the studio a primary revenue stream,” says Ashleigh Hults, Bandier’s director of marketing and communications. “We’re really interested in creating a reason for customers to come to the store several times a week. We’re seeing people spend their entire Saturday at the store.”

Bandier is part of a larger trend of activewear stores offering classes to encourage customers to come in regularly. Lululemon and Yogasmoga, for instance, have been inviting people to come in for free yoga classes or group runs for years. But Bandier is keen to take things a step further by creating even more opportunities to foster a community around its brand. Some of us, after all, want the virtuous feeling of working out at the gym while we’re actually shopping for shoes.

http://a.fastcompany.net/multisite_files/fastcompany/inline/2016/04/3058697-inline-i-1-bandiers-new-store-is-a-stylish-community-center.jpg

While many brands have found a way to create a sense of community on Instagram or Facebook, Bandier seeks to translate this experience into a living, breathing community in New York. “Given that you can do so much from your computer or smartphone, one of the great questions of our time is, What are the experiences you actually need to leave your home for and go see for yourself?” Neil Boyarsky, Bandier’s CEO, says.

He points out that a brick-and-mortar store needed to offer more than a mere physical space for selling products. Boyarsky wants people to associate his brand with not only fashionable activewear, but also a whole world of experiences connected to wellness surrounding fitness, nutrition, and special activities. “We want to be seen as a curator of the fitness world,” Boyarsky says.

By shifting the focus away from retail alone, Bandier has seen a huge increase in revenue. Boyarsky says that first-quarter sales in that location have doubled since last year, back when Bandier’s Flatiron store had a much smaller shopfront. Foot traffic there has also doubled, he says: Of the hundreds of customers who come in for an event or to attend a class, a significant proportion will pick up a new sports bra or T-shirt.

Bandier regularly partners with brands that are aligned with the company’s own. During Fashion Week, for instance, the company hosted activities in partnership with Serene Social, an organization that focuses on wellness and conscious living. More recently, Bandier collaborated with the fitness community Tone It Up to offer a morning workout followed by a breakfast that drew in more than a thousand visitors to the store. High-profile activewear brands have also used the store to preview their collections to fashion editors.

These efforts to create a lifestyle brand appear to be paying off for Bandier. Besides the growing sales figures, Hults says that customers are increasingly more engaged and loyal to the brand. One customer came into the store wearing a gold necklace that read “Bandier Girl.” “She had it made on her own,” Hults says. “People have been known to get tattoos of the logos of iconic brands. For us, this was similar: This woman really wanted to identify herself with the Bandier community.”

 

c2-webbutton-Share-04

Categories Narrative, Tech Industry

Driverless Trucks

A few weeks ago, I shared my thoughts about driverless cars hitting the roads and the issues office space will be facing (click here to read). Now, that technology is working with the trucking industry, and as the below article shows, it’s going to have a huge impact on many parts of our lives. Recently a platoon of driverless trucks drove across Europe. Click here for an article with a video of these trucks on the road.  

Some of these changes are great:

— Far lower shipping costs which will lead to the lower cost of goods.
–Decrease in traffic deaths.
–Increased speed to market. Driverless trucks can go 24 hours/day.
 
But like with any industry being disrupted by automation, the job loss will be substantial. This technology is coming with very little standing in its way. We’ll be watching it carefully in the coming years, and observing the ripple effects it brings. I will be curious to see how they refuel, stop bandits from stealing the goods, and other questions that still need to be answered. 
 
Stay tuned for more.  

Craig
602.954.3762

P.S.- Mentors can be found in the most unlikely places. Click here to watch this week’s video and learn about one of Craig’s most trusted mentors: his dentist.

Wisdom_Root_Canals_converted
(Having trouble viewing the video? Click here)

The driverless truck is coming, and it’s going to automate millions of jobs

By Ryan Petersen
TechCrunch

Driverless Truck

A convoy of self-driving trucks recently drove across Europe and arrived at the Port of Rotterdam. No technology will automate away more jobs — or drive more economic efficiency — than the driverless truck.

Shipping a full truckload from L.A. to New York costs around $4,500 today, with labor representing 75 percent of that cost. But those labor savings aren’t the only gains to be had from the adoption of driverless trucks.

Where drivers are restricted by law from driving more than 11 hours per day without taking an 8-hour break, a driverless truck can drive nearly 24 hours per day. That means the technology would effectively double the output of the U.S. transportation network at 25 percent of the cost.

And the savings become even more significant when you account for fuel efficiency gains. The optimal cruising speed from a fuel efficiency standpoint is around 45 miles per hour, whereas truckers who are paid by the mile drive much faster. Further fuel efficiencies will be had as the self-driving fleets adopt platooning technologies, like those from Peloton Technology, allowing trucks to draft behind one another in highway trains.

Trucking represents a considerable portion of the cost of all the goods we buy, so consumers everywhere will experience this change as lower prices and higher standards of living.

In addition, once the technology is mature enough to be rolled out commercially, we will also enjoy considerable safety benefits. This year alone more people will be killed in traffic accidents involving trucks than in all domestic airline crashes in the last 45 years combined. At the same time, more truck drivers were killed on the job, 835, than workers in any other occupation in the U.S.

Even putting aside the direct safety risks, truck driving is a grueling job that young people don’t really want to do. The average age of a commercial driver is 55 (and rising every year), with projected driver shortages that will create yet more incentive to adoptdriverless technology in the years to come.

While the efficiency gains are real — too real to pass up — the technology will have tremendous adverse effects as well. There are currently more than 1.6 million Americans working as truck drivers, making it the most common job in 29 states.

The loss of jobs representing 1 percent of the U.S. workforce will be a devastating blow to the economy. And the adverse consequences won’t end there. Gas stations, highway diners, rest stops, motels and other businesses catering to drivers will struggle to survive without them.

The demonstration in Europe shows that driverless trucking is right around the corner.  The primary remaining barriers are regulatory. We still need to create on- and off-ramps so human drivers can bring trucks to the freeways where highway autopilot can take over. We may also need dedicated lanes as slow-moving driverless trucks could be a hazard for drivers. These are big projects that can only be done with the active support of government. However, regulators will be understandably reluctant to allow technology with the potential to eliminate so many jobs.

Yet the benefits from adopting it will be so huge that we can’t simply outlaw it. A 400 percent price-performance improvement in ground transportation networks will represent an incredible boost to human well-being. Where would we be if we had banned mechanized agriculture on the grounds that most Americans worked in farming when tractors and harvesters were introduced in the early 20th century?

We often discuss the displacement of jobs by artificial intelligence and robots in the abstract, as something that we’ll have to eventually tackle in the far distant future. But the recent successful demonstration of the self-driving truck shows that we can’t afford to put off the conversation on how we’re going to adapt to this new reality.

c2-webbutton-Share-04