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“Real Estate Fracking” panel

CHICAGO—Uber, Airbnb and WeWork have been some of the most notable companies in the sharing economy, but what possibilities do they present real estate entrepreneurs? Look to the technological and cultural shifts, suggests Steve Weikal of the MIT Center for Real Estate. He hosted a panel last week on what he calls “real estate fracking” for the IREM 2017 Global Summit.

As Weikal explains it, real estate fracking involves using technology to break or open up a real estate asset and monetize it in entirely new ways, much like the process of injecting rock formations with high-pressure liquids to release the oil inside. But doing so requires more than creative entrepreneurs. People need to adjust their attitudes as they adopt new ways of doing things. A few years ago, not many people would want to take a ride in a stranger’s car, but now it’s considered the most normal thing in the world.

And for those who say companies like WeWork are a fad, Weikal points out that even large, blue-chip firms have begun joining the freelancers and start-ups that once populated co-working spaces. “This is a wave that will probably continue for quite a while. It’s going to be the new normal.”

Jason Fudin, CEO of Washington, DC-based WhyHotel, said his firm monetizes the unoccupied units of new luxury apartment buildings by turning them into pop-up hotels. And just as some neighbors objected to nearby homes being turned over to Airbnb, some people aren’t comfortable with bringing guests into their new buildings for overnight stays. But done the right way, developers, neighbors and potential customers can get comfortable with this new idea.

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