Adopting the Resource Based View of the firm and using an overview of the Information Economics and business literature on Transaction Cost Theory of the Firm this paper describes two information age characteristics which are essential to the transformation of the way real estate is used by firms:
- Recombinant Real-estate Supply-chain networks and
- Bundled, material, human and informational, resources and capabilities.
This literature is then used to support the Work-architecture model. Finally the Work-architecture model is applied across examples of traditional and innovative offerings in which real estate plays a part. These include:
- Airbnb, an offering which bundles residential real estate with the information technology of an app and which bundles residential real estate with the information technology of an app and dis-intermediates hotel companies completely out of their supply chain networks;
- Plug 'n' Play or serviced offices which can be leased on very short minute or hourly leases and which bundle a commercial real estate space booking app with utilities, furniture, and concierge services and which sit on a supply chain network which intermediates between sub-tenant and end user whether firm or individual; and
- Cross Docking, developed by Walmart and as recently announced by Amazon for its China operations, in which warehousing real estate - an erstwhile secondary activity frequently outsourced, is brought back within the firm, acknowledged to be a primary activity just long enough for it to be completely dis-intermediated from its supply chain network by an app which enables the tracking of incoming goods to be transferred from transport mode to transport mode across the dock, avoiding the warehouse real estate altogether.
The significance of the Work-architecture model for the real estate professional is that it involves skills which cross between material, human and information resources and capabilities but does not necessarily exclude the need for specialist expertise in any one category. So long as humans continue to have corporality, have not been replaced by cyborgs or robots, and continue to have the need for shelter, real estate is not going to suddenly dematerialize. However real estate professionals require a better understanding of the new space for real estate in order to anticipate, adapt to, create value through, or even be the innovator of new Work-architecture offerings.