Q&A | Ilene Goldfine, Hines
The chief digital strategy officer at Hines tells PlaceTech why the company is a bit like Jaws when it comes to innovation and why the floodgates could open to adoption in the coming year.
Hines is a real estate investor and developer with $92.3bn of assets under management around the world. Ilene Goldfine oversees the company’s global digital strategy office.
What stands out to you in what real estate is – or isn’t– talking about?
I think there’s a lot of talk around a subject, but we haven’t hit it directly yet, which is the changing nature of proptech right now. You’ve had a tonne of entrants, but they really have been: ‘I’m giving you this solution’, and they have not been as focused in my mind on: ‘What are your needs? What are the customer needs’.
These proptech firms need to start listening better about what we all need, and then giving solutions related to it, rather than almost giving what they think that we need.
I get it’s hard because the real estate industry is so, so different. Right? It depends on, are you talking about this product type? Are you talking about this geography? Are you talking about a company like Hines that has as many people as we do, or are you talking about a company that’s smaller that has 1,000 people?
I think some of them try to go after it all but then fail, because they’re not actually solving true customer pain points, and I think it’ll be interesting to see how this shakes out in a bit.
How do you approach innovation at a company that’s as big and global as Hines?
What we’ve been talking about lately is splitting it up into sustainable innovation – which is really about doing things better every day, every week, every month – and then disruptive innovation. What’s the big thing that’s out there that we should be thinking about now to position us for the future or the industry for the future?
My world is really about the sustainable innovation, which is how every day we’re trying to do things better.
We start first by saying: ‘Okay, we have to focus on different business lines’. If you try to do them all together, you won’t be able to. Somebody’s always gonna feel like they’re not getting priority. And then within that, we spend time with the business and find out what’s really happening. What are the pain points? What do they need help with?
On top of that is – it’s not a fancy idea or anything like that – but I kind of look at things like a graph. And so on your horizontal, you say return on investment, and on your vertical, you say ease of implementation. So, we say: ‘Okay, we should be here’: something that is giving considerable value back to the organisation and it’s easy to implement. That’s where we should be focusing our time.
If it doesn’t provide a lot of value to a group of people or a big enough group of people, and also it’s hard to implement, is that where we should be spending our time? We’ve got enough bigger fish to fry.
How do you go about finding solutions that work for you?
We do it in a lot of different ways. One, we have an investment in [VC firm] Fifth Wall, so we are currently working with them. We have different consultants that we work with in different ways.
But a lot of it is we’re lucky because of our size that we can we get a seat at the table of any discussion. So, either we’re hearing something that’s coming, or we say: ‘Here’s our problem, and we’re gonna go out and start actively finding out what’s the solution to bring to the table.’
The harder thing is when you see something, and you basically know it’s a good product, but it’s so small they won’t be able to support our organisation in a way yet that we want. So then we have to decide, okay, is it worth it to try to work with them?
Our organisation sometimes, we can feel like Jaws. I have told a vendor that once, like: ‘You don’t understand. We’re Jaws, and you’re gonna need a bigger boat.’
How does the wider economic environment affect your innovation strategy?
I do think it’s actually a little counter-cyclical with the economy.
Of course, you have to be smart about what you spend your money on. In my example of quadrants, you really want to be higher up on that ROI/ease of implementation.
But what actually is going to happen, and I’m slightly fearful of this, is with the economy slowing down, a company like Hines that really wants to go and do and be active, they’re going to turn their attention inward. And so I’m actually a little nervous that the [digital innovation] floodgates are going to open. Our folks are going to completely want to push even harder, faster on ESG, which is great. But it’s also, you know, what does that do to the ecosystem that we have in place to be able to go and deliver on that?
I think real estate, in general, has a group of people in it that want to do. They want to go; they want to do. So when you aren’t going and doing and building a building, or buying a building, what’s going to happen? They want to go and do in other areas, which is great. I love it. I welcome it. But it is scary from the standpoint of, you know, how many hours are in the day?
What do you prioritise around ESG?
First of all, I believe the G is interwoven with the E and the S. I don’t necessarily consider it as something separate. It’s not anything other than: do what you say you’re gonna do and be able to support it.
If you’re talking about the E and the S, we’re focusing a lot of time on E right now, specifically the operational part of E. We put out a net zero operational carbon commitment by 2040. We put out an embodied carbon playbook, and we’re starting to move industry to do some things related to [that], like in our Salesforce building in Chicago [Hines’ Salesforce Tower was the first building in Chicago to require and measure environmental product declarations to quantify embodied carbon emissions].
But the embodied carbon part of E is hard. It’s the whole supply chain, right? You can’t necessarily control the whole supply chain; you have to influence the supply chain, which is what we’re doing.
So now we focus on the operational part of carbon. We are in the middle of building out the pipes to get the data. We don’t necessarily need somebody to aggregate the data for us or report on the data for us. We have a data science team do all that. But the lowest level of how to get the data is hard. It’s hard because it’s 20 different countries, over 280 different cities.
What we’re also doing right now, and this is the big focus, we are actively building a carbon model. When you go to investment committee, you have an underwriting model, and you should have a carbon model that goes with this. And that should be industry standard, just like an underwriting model is. You should go to investment committee and say: ‘This is what I’m going to do financially, and this is what I’m doing for carbon.’ And then you hold yourself accountable to that.
How do we get to a point where that becomes an industry norm?
We’re working with some software providers to start at the beginning – point zero – of capturing data, things related to it. Then it’s socialising it a bit. It is through influence, it is through discussions, but it’s going to be hard, right?
But I think most firms will end up at some point doing something like that. It’s more about, how do we create some standards so that if I’m handing my carbon model to you, is everybody going to sing from the same sheet of music?
We’re using the CRREM model as a basis for this, based on the scientific pathways. And in addition to that, there’s an initiative with OSCRE right now that we’re going to be working on with some of the other real estate firms like Blackstone, Brookfield and Bentall, and it’s about data standardisation.
What role do you think government policy should play in this?
I think government plays a part, but it’s not the be all and end all, because policy doesn’t mean everybody naturally is going to do it – as well as, they’re not all naturally going to do it well, or they’re not going to be transparent about it.
It’s incumbent on all of us in real estate to have more dialogue. Real estate, historically, has been: ‘You are my competitor. I’m here, you’re here, we’re not sharing.’ And we need to break those walls, because we all need to be working through this and talking about it and getting to the right answer together, not because somebody has said: ‘You must go do this.’
There might be a little bit of top-down, but I think that you need the bottom-up approach and more – not necessarily conferences, summits – but more workshops, like us getting together on this OSCRE thing. What are the things that we need to do together as an industry, and start building and talking about doing, to get us there?
What do you think is going to be different in real estate in 18 months?
Hopefully, we’ll be coming out of this economy. I mean, right now things are just locked. Things are not moving at all. So by 18 months’ time, I’m hoping things are moving. If not, that’s a scary, scary scenario to me.
I do think you’re gonna see consolidation of product vendors. And then, I think you’re gonna see significant progress on the ESG side. One of the things that I’m fearful about is that it stagnates. [But] I’m bullish that we will see significant change, and we will be in a different place, and we won’t be just sitting here talking about how hard it is. We’ll actually be doing something.
Julie Hirigoyen, CEO, UK Green Building Council
José Pellicer, head of investment strategy, M&G Real Estate
John Alker, head of sustainability, L&G Capital
François Lacoursière, senior VP of innovation, Ivanhoé Cambridge