Technology: Great Expense, Greater Asset

NEWPORT COAST, CA—Technology is one of commercial real estate‘s greatest expenses, but it’s also one of its greatest assets, said panelists at last night’s 2014 Orange County Executive Forum here, hosted by the USC Lusk Center for Real Estate and Allen Matkins. The impact of technology on their business was one subject the panelists tackled during the evening as members took the industry’s pulse and discussed their greatest opportunities and challenges in the current environment.

When moderator Gary S. McKitterick, a partners with Allen Matkins, asked Patrick S. Donahue, chairman and CEO of Donahue Schriber, “Is the shopping center dead?” now that e-commerce has taken off, Donahue responded, “Heavens, no! The scale of the Internet represents only 6% of retail sales. Catalog sales have always been between 1.5% and 3% of retail sales, and the Internet doubled that. The Internet is big because of its breadth of inventory, not because of customer service. We think of it as tremendously additive to our business.” He added that providing services to people, which cannot be done over the Internet, will always be important for brick-and-mortar stores.