In a recent interview, Jon Gray, the head of real estate for private equity giant Blackstone, spoke about the role technology is playing in the commercial real estate world. Gray stated that despite expectations, technology actually plays a major role in how capital is deployed. One major shift Gray identified was the rise in online retail. More online retail means less brick-and-mortar stores and more warehouse space. For this reason, Blackstone, the world’s largest real estate investor, has purchased over 400 million square feet of warehouse space in North America, Europe, Asia, and Brazil over the course of the last seven years.
Gray also discussed the rise of cities and regions that successfully appeal to millennials, citing Seattle, Northern California, West Los Angeles, Austin, Manhattan and Boston-Cambridge in North America as well as Stockholm, London, Dublin, Amsterdam and Berlin in Europe. Gray pointed out that the cultural opportunities in these cities, such as food, music and art, attract millennials, and thus become fertile ground for low-cost tech companies and job creation. Commercial real estate firms can then make investments based on this trend.