The resurgence of the experiential element in real estate

The latest in real estate technology

March 7th, 2025

Hot off the press: Brendan Wallace, Fifth Wall's CEO and Chief Investment Officer, penned an op-ed in Fortune on how AI will impact real estate, beyond asset classes like data centers. Queue that up in a new tab, enjoy the read below, and have a great weekend.

From Operational to Experiential: Real Estate's Next Evolution

While not historically the fastest industry to adapt, real estate has experienced significant shifts in recent decades, transforming from an almost entirely passive asset class to one laser-focused on achieving new operational efficiencies, leveraging data in novel ways, and integrating advanced technologies:

In multifamily: Property managers are using new technologies to facilitate leasing, maintenance, management, and smarter building control systems. They're also exploring flexible rent models and "fully-serviced" living concepts that blur the lines between home, hospitality, and membership-based communities.
In office: Landlords now compete on hospitality-driven services, tenant engagement platforms, on-demand flexibility, and even brand.
In industrial: Logistics operators prioritize efficiency, automation, and tenant-driven solutions to keep up with e-commerce demand.

The result? For developers, owners, and investors, PropTech is top of mind across the board.

So, what’s next? How else can developers and operators delight occupants and all people who move through, live, work, and play in and around their properties? That’s where Brendan Wallace, CEO and Chief Investment Officer at Fifth Wall, sees the next real estate paradigm shift happening, namely towards a renewed emphasis on the experiential, as he discussed in his recent appearance on the “From Where I Sit" podcast with Tom McGee (tune in to the full episode here).

"More and more landlords are going to see themselves in the experience business. The retail industry got a taste of that first, and now the office industry is getting a taste. Then we'll see it in other asset classes over time."

Of course, user experience has and will always matter in real estate, whether with respect to occupant satisfaction, lease renewals, or attracting new business. However, stakeholders across the value chain have historically prioritized location, existing or ease of adding infrastructure, and demand. Placing greater emphasis on exceptional experiences and delighting customers will become increasingly important, as what were once thought of as "new features" turn into everyday expectations for tenants.

1. The Experiential Paradigm Shift

CBRE—one of Fifth Wall’s strategic LPs—acquired Industrious, one of Fifth Wall’s earliest investments and a leading provider of flexible workspace–earlier this year. This represented a watershed moment in commercial real estate's shift towards an experience-first strategy. Nor was it just any other transaction; it’s a signpost for how the industry's most recognizable players are positioning themselves for a paradigm shift in real estate.

Jamie Hodari, Industrious co-founder and CEO, who is now CBRE's Chief Commercial Officer, offered color on this shift in a video interview with Brendan Wallace:

"...people are looking for something more out of their day at work. They're looking for a place that enriches their lives, where it's not just about being productive; they want to join a young parents group or a book club, be exposed to new ideas, new people.”

Industrious’ focus on the customer went above and beyond the baseline, helping it set itself apart in the flex workspace market, outlast competitors, and offer an attractive acquisition target.

As Brendan noted on ICSC's "From Where I Sit" podcast:

“CBRE did that deal because they believe that, as the largest operator of real estate space on earth, experience is what matters. Experience is very hard to create. It touches on many things: operations, technology, branding, and people … it's almost like the hotel model but applied to office real estate. So, we're going to manage the space for you. We're going to create the experience for tenants. We're going to market it. We're going to operate it. We're going to keep the coffee hot.”

To be sure, this isn’t just an office space story. There are lessons here for all property owners, developers, and investors. Built environment stakeholders will need to create and maintain compelling experiences that align with or, better yet, set higher bar for what occupants and building users expect and enjoy.

2. The Experiential Expansion Across Asset Classes

Beyond office space, this the experiential paradigm shift is influencing other asset classes:

Retail's experiential renaissance: Retailers that survived past proclamations of the sector's demise weren't only those with prime locations or rock-bottom rents—they recognized that shopping centers needed to transform from transaction hubs to destinations to do more than shop. In the age of Amazon, convenience is the name of the game in e-commerce. Retailers learned if they wanted to thrive in this new environment, they had to offer experiences—whether nostalgic or novel—that can't be packaged and delivered.
Hotels vs. Airbnb: Digging into hospitality, as it has always had to focus extensively on customer experience for success, the Airbnb-versus-hotels competition has often been framed as a pure-play price war. That obfuscates a deeper story. Airbnb has seen some success by offering hyper-local experiences. Whereas traditional hotels compete on consistency and brand name, Airbnb disrupted the asset class with experience-focused options in addition to housing. That said, hotels still enjoy a higher degree of control over customers’ experiences. Plus, some cities like New York are also particularly stringent about short-term rentals.
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