Productive Industries & Farms: Malls as Maker Spaces

A picture of a mall with vacant retail spaces. The text 'The Development of Productive Industries & Farms' is overlaid. This references one of the tenents in NAR's Code of Ethics preamble.

People around the country are working to revitalize malls. What moves do you see in your community?

This piece and thoughts around it were inspired by my hometown of Muscatine, Iowa. It’s a town of 20,000 that’s relied on manufacturing labor for decades. It also has a mall that was a fixture of my formative years and was my town square. It’s where you went to see and be seen. Movies, music and books, a connection to the outside world. My internet before the internet. The problem today, however, is malls like the one I grew up with are experiencing hard times. As an example, Muscatine Mall, had 30+ stores in its heyday. Today, that’s been reduced exponentially. I asked my dad to document it and below are photos from a Saturday a couple weeks back.

Main hallway of a mall. A majority of the stores are vacant

The main hallway for the mall. We used to do many laps around this space on Friday and Saturday nights, waiting for movies to start or friends to arrive. (Photo courtesy: Tom Curry)

A vacant glass storefront in a mall.

You’ll see some natural light in these pictures and that’s one of the attractive features of this space. It provided a connection to the outside world in this built space. (Photo courtesy: Tom Curry)

A row of vacant stores in a hallway of a mall.

These stores were national chains and brands. Some of the stores in the mall today are local merchants. (Photo courtesy: Tom Curry)

Glass-walled store that is empty.

This was the first video store in town. I remember going here to rent films. (Photo courtesy: Tom Curry)

A former flagship store at a mall that is vacant

This was an anchor store for the mall since its opening. It closed several years back. (Photo courtesy: Tom Curry)

Honestly, it is tough to see a place I used to frequent look so underutilized. Understand, I’m not critiquing the owners of the mall. They are interested in seeing this space succeed. It’s not their faults. Retail is taking a hit and small markets like Muscatine are suffering. The New York Times recently had a feature on a man who’s documenting the demise of malls. So what to do with the space?

A recent article of On Common Ground from our Smart Growth group at NAR points out various efforts around the US to repurpose malls. It’s a great piece. From community colleges to transitional housing, there are some really innovative efforts taking shape. But I’ve had an idea that I am certain someone is attempting and I just haven’t heard about it. What if malls became maker spaces?

What is a Maker Space?

By now, you may know that CRT is building our own environmental quality sensor for members to use as closing gifts. We were able to get this project started at our offices in Chicago. We have a 3D printer, equipment for soldering and building sensor boards. But then, we started to hit the limits of our equipment and space. Rather than asking our Budget Committee for hundreds of thousands of dollars of equipment we may only use a few times, we decided to look for a space we could work on this type of thing in. We were lucky to find a space called mHUB.

mHUB is 63,000 square feet, and over two million dollars worth of light manufacturing equipment. It’s a non-profit that was launched out of public and private partnerships with the City of Chicago through an organization called World Business Chicago and an awesome 8,000 square foot maker space called Catalyze Chicago. They joined forces with a number of businesses and created an amazing space.

In mHUB, we have access to a Woodworking Shop, a Metals shop, a 3D print lab, electronics lab, laser cutting machines and several other types of equipment. Things as simple as hammers, screwdrivers and wrenches. Not only that, we have access to the mindshare of mHUB members. Engineers, industrial designers, software developers, and hobbyists with an amazing idea. It’s a village of great innovation.

We pay a monthly membership and it allows us to access any of that equipment. It also gives us access to others working on projects that could overlap with our work or who could help inform what we’re doing and learn from them. We can prototype rapidly without incurring the traditional costs of manufacturing. mHUB consists of groups, like NAR, people who are trying out a new idea with no previous manufacturing experience, industrial engineers, artists and large companies, like GE.

Now imagine if cities like my hometown Muscatine, could use this to revitalize its industry and help workers who may be out of work, or people with an idea without a lot of capital, find a new way to make a living. It makes sense to me when I think about towns like Muscatine because of the workers’ skill sets.

Malls as Maker Spaces

In taking our experiences at mHUB, I see hope for the malls like the one in Muscatine. They can become communities of industry and innovation. Here are some potential uses for the space:

  • The former shoe store becoming a woodworking shop
  • The bookstore a 3D print lab
  • The music store a tool library
  • The cinemaplex of 4 theaters a space to hold presentations and meetups
  • Job training could happen in the larger anchor stores and could be sponsored by the local companies
  • The food court becomes a place to restaurants in the city to have pop ups or a cheap kiosk to sell lunch to the workers at the space
  • Another storefront could become a server room and a local ‘cloud’ created for participants in the space
  • Yet another space becomes a place to grow food

It could become a place to attract new business, a place to let the local business and manufacturing companies sponsor, and let the makers sell their wares.

My statement above about growing food is not a crazy one. Recently, a company called Plenty received a $200 million dollar investment from Jeff Bezos of Amazon fame, and other investors. Plenty creates systems for growing food indoors. Imagine if the food court became the place to grow food. Fresh food could be harvested and sold in an indoor farmers market.

So rather than going to the mall to buy manufactured goods, they become places to manufacture.

Revitalizing spaces in Muscatine is not a new idea, or for other communities for that matter. I’m very aware of the impact malls had on downtowns. In fact, in Muscatine, our downtown was decimated by the mall. But today, there are efforts to revitalize. One building in particular now has a great coffee shop and other specialty shops and is a destination for community members. Muscatine is not unique for this. Groups like Recast City are helping local governments think about how to do this type of thing.

The Challenges of this Idea (To Be Continued)

This is a long piece, so I’ll end with the presentation of the premise and say that I see challenges. I’m also looking for your ideas around what the challenges would be. Here is what I see as some immediate challenges:

  • Cost
  • Community buy-in
  • Business buy-in
  • Building Infrastructure
  • Zoning
  • Space utilization
    • Does it all need to be filled at once?
    • Does it all need to be a maker space?
  • Covering ongoing costs
  • Who owns it?

So, what do you think? Does it sound feasible? Definitely submit ideas and thoughts in the comments below. Thanks!

Facebook Live Office Hours: CRETech Takeaways, Summer 2017

Join us with Jacob from NAR’s Commercial division! He recently attended a #CRETech summit, and is here to fill us in on what he learned while there. He covers some takeaways from the summit, including embracing technology in the commercial real estate space. Join us Fridays at 3PM Eastern for Office Hours on our Facebook page, where you can ask questions as you watch and we’ll comment back to answer!

Facebook Live Office Hours: Commercial Tech Key Takeaways from CRTLabs on Vimeo.

Three Key Takeaways from Chicago Panel on Commercial Real Estate Technology

This week on the CRT Labs blog, Jacob Knabb from NAR’s Commercial division writes about some much-needed advancements in commercial real estate technology.

Four industry leaders met recently in Chicago to discuss the state of commercial real estate technology, exploring what disruption might mean for the future of commercial real estate.

Emily Line, Vice President of Commercial Services, Realtors Property Resource® (RPR), Constance Freedman, Founder and Managing Partner, Moderne Ventures and the Moderne Accelerator, and Karin Kraai, Senior Managing Director, Newmark Grubb Knight Frank, joined moderator Ginger Downs, Chief Executive Officer, Chicago Association of REALTORS®, for an informative discussion of commercial real estate technology to a packed room of Chicago-area real estate practitioners.

(L-R) Kraai, Line, & Freedman. (photo by Jacob S. Knabb)

Ready or Not Here Comes Commercial Real Estate Technology

 The first major takeaway is complexity inhibits technology adoption, as does fear of change.

Line pointed to a 2016 Forbes survey, which found only 11% of respondents consider themselves on the leading edge of technology. Yet the same executives also believe that technology is “revolutionizing the industry.” A similar survey by KPMG revealed that over 94 percent of commercial real estate executives identified complexity as their greatest challenge, Line noted, with 84% identifying ‘information management’ as one key solution. “Despite the fact that 84% recognize the solution, 89% are still not willing to step out of what’s comfortable,” Line said.

It is impossible to ignore the fact that new technology companies are entering the industry at a rapid pace, creating cost-efficient products designed to simply workflow. Most of these companies offer supportive data in a more digestible fashion. One great way for REALTORS® to establish yourself in the tech sector is to sign up to test new products “At Moderne, most of the companies we fund asked to create pilot programs where users can try a new company’s product for free in exchange for user feedback,” said Freedman. “Get involved and you may build a real relationship with a company.”

Commercial Real Estate Technology Isn’t Exactly Disruptive

The second key takeaway is that commercial real estate hasn’t had a true disruption yet. “We’ve had embellishers and enhancers [in commercial real estate technology] but not a disruptor,” said Kraai. Commercial real estate still hinges on human expertise at its core and as a result “brokers don’t want to be disrupted,” Kraai argued. Freedman agreed, noting the importance of human relationships. “Deals can take five or more years to complete [and] clients want an advisor or a consultant,” Freedman argued.

“Disruption is separate from the individual,” echoed Downs. “And the products need to make the broker more efficient.”

Technologies created for other markets will penetrate commercial real estate, enhancing how the industry functions. There movement towards smart buildings in smart cities is undeniably changing the way brokers and investors think about properties. “Buildings are becoming greener and offer far more smart tech options for tenants,” said Kraai. “Here in Chicago’s riverfront we are seeing a definite desire on the part of tenants and firms to have a smaller footprint.”

Intentionally Cultivating a Growing Workforce

 The final takeaway is three-fold: Diversity creates better companies, the key to building diversity is through mentorship, and this matters to the incoming millennial workforce. Line argued the “Work, Live, Play” movement is unavoidable.

“Shifting lifestyle preferences are prompting major changes in the real estate landscape, forcing developers, investors, and REALTORS® to dive deeper into research and think about the full picture for a community,” Line referenced a study commissioned by NAR and conducted by Swanepoel T3 Group called the Commercial Real Estate ALERT. According to the report, Millennials will make up 75 percent of the workforce by 2030. “One of the most pressing challenges for commercial real estate is to plan for where this important segment of society will live, work, and play,” Line reasoned.

This incoming workforce brings a different set of expectations about diversity. Freedman noted a particular lack of diversity when it comes to the investor space. “The managing partners in firms across equity is roughly 7%,” she said. “In real estate, it’s closer to 3%.” Freedman bemoaned the fact that hardly any women have their own fund despite the fact that almost all want to.”

That said, Downs noted a marked shift in company culture to attract younger employees and improve the happiness of current ones. “Millennials will soon be the largest demographic in the work force, so it’s important to consider what they are looking for in a work place and find spaces to make those dreams a reality,” said Downs. “Because so many of us live tech-heavy, fast-paced lives, we need our work places to be innovative and efficient.” The entire panel strongly believed that practitioners should commit to the old-school method of mentorship to support millennials, particularly women and minorities, entering the commercial real estate and technology space. A diversified industry creates much stronger returns. As Kraai succinctly put it: “All of the Top-20 Tech firms have women in at least 20% of their key positions. It makes better thinking and increases profitability.”

Jacob S. Knabb is Commercial Communications & Member Services Associate for the National Association of REALTORS®. He works frequently with CRT Labs, keeping us informed of the latest and greatest in commercial real estate technology trends.

These Three Commercial Real Estate Tech Companies Are All About Connections

This week on the CRT Labs blog, Jacob Knabb from NAR’s Commercial division writes about some much-needed advancements in commercial real estate technology.

For years the commercial real estate sector has been allergic to technological advances. Data-sharing and easy access to listing information made no sense in a business where proprietary information, in-house data, and brokers who are hush-hush about who might be in their rolodex were the norm. This reputation for lagging behind the field is fast becoming obsolete, however, as commercial real estate has proven ripe for disruption. Over the past few years tech startups have been breaking into this market, changing the status quo and capitalizing on weaknesses in protocol and needlessly opaque communications between investors, brokers, and client reps. It’s suddenly fun to follow the commercial real estate tech market.

Floating Through Space by Ryan Tang

Today I want to look at three of the more exciting, noteworthy commercial real estate tech companies that have come onto my radar recently: VTS, WeWork, and CommissionTrac. The common theme for each of these products is a dynamic ability to leverage technology to speed up traditionally time-consuming, costly processes and to facilitate connections.

Let’s start with VTS, a platform Forbes touted for its ability to enable “real estate professionals [to] track deals and manage space in real-time, and collaboratively.” VTS is made for property managers, brokers, and tenant reps. This is what makes it revolutionary: VTS centralizes property portfolios, making them accessible to all of the key players in real time. “High quality, visual, actionable data gold,” as Duke Long called it in NAR’s magazine Commercial Connections earlier this year. Leasing data is delivered in an intuitive, visually pleasing display. Even for massive portfolios or team members spread around the globe.

WeWork excels because it can “[b]uild, acquire, and manage assets with technology” by streamlining construction, acquisition, and asset management. I attended a panel discussion on technologies serving the built environment at DisruptCRE in Chicago this May that featured Megan Dodds, WeWork’s Midwest director of community. Dodds was able to convey WeWork’s focus on maximizing square footage by creating shared office scenarios that are proving to be quite appealing to millennials eager for community and companies hungry for space to house their untethered workforce. In other words: they create killer office environments that hum along at maximum occupancy, generating strong ROI for investors. WeWork will be exhibiting in the Commercial Marketplace at NAR’s REALTORS® Conference & Expo in Chicago and I can’t wait to learn more about them in November.

I’m going to end this with a bang by taking a quick jaunt into bookkeeping technology. Almost lost you there, didn’t I? Most commercial practitioners detest this part of the job for a reason. It’s complicated to do and expansive to pay to have done. Atlanta-based ComissionTrac is disrupting accounting by providing a platform able to handle invoicing, deposits, commission distributions, and general ledger reports. You send them copies of all the paperwork, or your Quickbooks files, and they do all the heavy-lifting. You can run reports on any device from any location with a signal. CommissionTrac is customizable for agents, ‘back office,’ and principals and the full-service package is $9.99 a head (aka: affordable).

Commercial real estate pros love monitoring trends and here the lines are fairly straightforward: technology will only continue to blossom and grow. Baby Boomers are aging out of the workforce and notions of proprietary data and technology are becoming increasingly obsolete. With IoT establishing a firm foothold in commercial real estate, the next round of breakthroughs are likely to address security solutions. But for the time being connectivity is the word of the hour, and just like with other industries, the commercial real estate industry will thrive as it keeps that connectivity at the forefront of its technological advances.

Jacob S. Knabb is Commercial Communications & Member Services Associate for the National Association of REALTORS®. He works frequently with CRT Labs, keeping us informed of the latest and greatest in commercial real estate technology trends.