The point is not just that technology is the enabler of a telecommuting trend, but also that it sometimes takes a catalyst to bring on the complete consequences of an impending trend.
In the last couple of days, many around the world woke up to headlines about the possibility of a Swine Flu Pandemic, and we found ourselves with yet another possible catalyst.
With the fear, be it an overreaction or not, of a full pandemic looming, the thought of going into an office with several hundred or even thousands of people does not seem very appealing, let alone taking public transportation to get there.
One would guess that anyone with telecommuting capabilities may have chosen to stay home within the last few days.
My position still stands on technology's effect on certain commercial property types placed in that original article; and to extrapolate further, it is important to understand what would happen if this does develop into a full pandemic.
Not only would office space be affected as well as the retail spaces that are associated with them, but it may reach further into the consumer supply chain.
For example, in some areas of North America, online grocery shopping has taken off but not as much as many have expected.
However, to use Malcolm Gladwell's terminology from his now famous book, "The Tipping Point", it has not tipped into a fully fledged consumer trend or epidemic like say a Netflix or iTunes.
However, if the thought of going to the grocery store and catching a flu sounds too risky all of a sudden, it may get new people to try out online grocery shopping for the first time.
Once shoppers start ordering their groceries online, would it then create the possibility of them continuing to do their shopping online even after the fear has passed? Also, by shopping online and telling their friends and family they are doing so because of the fear of catching the flu, would it also convince others into grocery shopping online as well? Grocery stores are just one example, but overall, any place that is going to have a lot of people together in a closed off area is probably going to be avoided during a flu pandemic (or the fear of one).
That being said, the mall would also be a place you would avoid, and that could lead to new online shoppers.
The point of all of this is that catalysts help make natural trends happen faster.
I, like many, believe that the natural order of things will lead to more and more movement into cyberspace by both businesses and consumers.
What makes a flu pandemic interesting is that it could start to hit the large retail properties.
We are not talking about 2,000 sq ft Blockbuster stores anymore; in this situation it would start to hit your 10,000+ sq ft superstores.
That becomes extremely concerning, not only for the superstores themselves, but for all of the additional retailers that surround superstores and feed off of their business.
Before you go and start selling all of your commercial real estate, realize that we are talking about extreme scenarios and not something that would happen overnight.
Adjusting investments solely based on the probability of a full blown flu pandemic is about as strategic as hitting on 19 in blackjack.
It does however force us to contemplate the fragility of current business models that depend on physical space.
These stubborn models based on bricks and mortar attributes are being threatened by new models utilizing technologies that are cheaper, faster, and in this hypothetical case, safer for the consumer.
One example of new technology models taking over an old industry is the online company BasicFunerals.
It looks to be the first fully online funeral and cremation service that doesn't own a physical property.
Without the large overhead, they offer all the services of a funeral home at close to half the price.
This is one example of an old model that nobody thought would change.
This is not to say that all commercial real estate will suffer from a move to cyberspace; other types of commercial real estate could either thrive or see no effect.
For instance, a retail superstore like Costco, depending on location, could be more of a centrally located warehousing type facility to deliver products to consumer's homes.
In my opinion, property types like multi-family and small mixed-use should also not be affected by this as people need a place to live, and corner stores compared to malls are more practical for an increasingly home bound world.
Also, as discussed in the previous article, "Technology's Effect on Commercial Real Estate in a Recession", I spoke about office space in general being affected negatively by more telecommuting.
However, I do believe that medical office space could do very well, especially with an aging population.
What is significant to consider, is that it may just take the fear of something like a flu pandemic to be the catalyst without the actual event taking place.
When the markets have fear, selling off equities and a flight to alternative investments like gold and other precious metals is a common theme, so fear based investing or divesting is not anything new.
For that matter, I believe, like many others, that we are likely headed for a double dip recession where inflation created out of government "over-stimulus" would crush a fledgling recovery and start a much longer, painful recession.
Either way, the businesses that have moved to telecommuting out of the need to cut costs while trying to maintain productivity, will not be leasing new office space anytime soon.
For that matter, retail outfits that are in fear of a drawn out recession won't be looking for new retail space either.
The fear of a flu or the reality of a recession results in changing business models whether we like it or not.
For more close minded individuals that feel a physical space for business is essential, ask yourself and your friends if they have ever gone to a record store after downloading songs onto their iPods, or the last time they went to a video store after using ON Demand or Netflix, or if they still have a newspaper subscription.
Change is only feared when one is not willing to adapt.