THE REAL ESTATE INNOVATION LAB RESEARCH ON INNOVATION IN THE BUILT ENVIRONMENT

INNOVATION IS IN A PLACE

-DENNIS FRENCHMAN

THE MISSIONA RESEARCH AGENDA FOR INNOVATION IN THE BUILT ENVIRONMENT

THE LAB• REALESTATEANDINNOVATIONARENOTTWOWORDSCOMMONLYUSEDINTHESAMESENTENCE.• OUROBJECTIVEISTOTRANSFORMINVESTMENTUNCERTAINTYAROUNDINNOVATIONINTORISKANDRETURNFORINSTITUTIONALINVESTORSYET

• THEREARECOMPETITIVEFORCESDRIVINGMARKETACTORSINTHEBUILTENVIRONMENTTODIFFERENTIATE–TOINNOVATE.

• THEREALESTATEINNOVATIONLABISTHEFIRSTR&DSPOTFORINNOVATIONINTHEBUILTENVIRONMENT.THEREALESTATESECTORISONTHEFRONTIERFORMEASURINGTHEINCENTIVESTOINNOVATE.

• ASWELLASHAVINGAGROWINGANDURBANIZINGBUILTENVIRONMENTWITHKEENLYCOMPETITIVEINVESTORSTHATAREONTHEONEHANDDEVELOPINGINNOVATIVEREALESTATEPRODUCTSANDONTHEOTHERHANDEAGERTOIDENTIFYPERFORMANCEOFINNOVATIONINTHEREALESTATEMARKETPLACETHROUGHINNOVATIVEDATAPRODUCTS.

INNOVATION IN THE BUILT ENVIRONMENT• INNOVATIONINTHEBUILTENVIRONMENTISABOUTIDENTIFYINGTHEPRODUCTS,PROCESSESANDORGANIZATIONAL(DATA)INNOVATIONSTHATARETRANSFORMINGCOMMERCIALREALESTATE

• CREATINGAMEANINGFULLEXICONOFINNOVATIONFORTHEREALESTATEMARKET• EMPIRICALLYIDENTIFYINGINCENTIVES–PROFITS(LOSSES)–FORINSTITUTIONALINVESTORS.

REMOVING INNOVATION UNCERTAINTY• THEREISREALUNCERTAINTYINADOPTINGINNOVATIVEPRODUCTS,PROCESSESANDDATA• THEREISALACKOFUNDERSTANDINGININNOVATIVEBUILDINGDESIGN,PLANNINGANDIMPORTANTLYFINANCIALINCENTIVES–COSTSANDREVENUES-FROMINNOVATION.

CREATING AN ANCHOR FOR INNOVATION • UNDERSTANDINGOFINNOVATIONINTHEBUILTENVIRONMENT• LIFECYCLEANDIMPACTOFNEWBUILDINGPRODUCTSANDPROCESSESONMARKETPERFORMANCE• HOWITCONTRIBUTESTOTHEGROWTHOFCITIESANDEXPANDINGTHEPRODUCTPORTFOLIOOFINSTITUTIONALINVESTORS

LAB PEOPLEPRINCIPAL INVESTIGATORS

DR. ANDREA CHEGUTDirector Real Estate Innovation LabResearch Scientist

Andrea Chegut is a Postdoctoral Research Associate at the MIT Center for Real Estate. Andrea’s research agenda focuses on the economic outcomes of innovation in the built environment. Her work specializes in innovative real estate products in commercial real estate and thier impacts on investment perofrmance and economic growth. From green buildings and data centers to urban food farms and micro-apartments, she looks at the asset pricing, uptake and diffusion of new products in commercial real estate markets.

EducationPhD Finance, Maastricht UniversityM.S. Economics & Law, Utrecht University

PROF. DENNIS FRENCHMANLeventhal Professor of Urban Design and Planning

Professor Dennis Frenchman is the Leventhal Professor of Urban Design and Planningwww at MIT, where he is former director of City Design and Development and chair of the Masters in City Planning program. He has taught and practiced extensively in Asia, Europe, and South America and served as External Advisor on urban livability to the President of the World Bank. A registered architect, he is also founding principal of ICON architecture in Boston an international architecture and urban design firm.

EducationMArchAS and MCP, MITBArch, University of Cincinnati

PROF. DAVID GELTNERProfessor of Real Estate Finance

Professor David Geltner is the Professor of Real Estate Finance in the Department of Urban Studies & Planning with a joint appointment in Engineering Systems in MIT’s School of Engineering.Geltner served as Academic Director of the MIT Center for Real Estate during 2003-08 and is the faculty chair of MIT’s Master of Science in Real Estate Development (MSRED) program. He is the lead author of the most widely-cited real estate investments textbook, “Commercial Real Estate Analysis & Investments”, now in its third edition.

EducationPhD Civil Engineering, MITM.S. Urban Studies, Carnegie-Mellon and University of Michigan

STEVE WEIKAL

Director Real Estate Technology HubHead of Industry Relations

Steve Weikal is Head of Industry Relations at the MIT Center for Real Estate. He manages relationships between the Center, its global network of industry partners and over 1000 alumni of MIT’s Master’s in Real Estate Development (MSRED). His research focuses on innovative new technology and business models that disrupt the traditional ways of developing, transacting and managing real estate. He is the Founder of Real Disruption - a series of conferences discussing the impact of emerging technology on the real estate industry.

EducationMSRED and MCP, MITJD, Suffolk University Law SchoolLEED, AP

INNOVATION THINKERSRESEARCH TEAM

ANNIE RYAN

Master’s of City Planning student at MIT emphasizing in City Design and Develop-ment. Her research focus includes accelerator program research, designing for creati-ve industries and integrating complete streets into existing suburban streetscapes. Prior to MIT she worked as an ur-ban designer at PlaceWorks, an urban planning firm in the San Francisco Bay Area, whe-re she designed place-making strategies with public sector clients throughout California. Contact: afryan@mit.edu

ISABEL TAUSENDSCHON

Visiting PhD Candidate at the MIT Center for Real Estate. Her research focuses on the impact of innovation districts, incuba-tors and accelerator real estate space activities on small and medium enterprise firm perfor-mance. Isabel holds a Bachelor’s degree in Business Adminis-tration and a Master’s degree in Finance from Maastricht University. Isabel is currently a PhD Candidate in Finance.

CHARLES STEELMAN

Masters in Real Estate De-velopment student at MIT’s Center for Real Estate. Prior to MIT, he spent five years as a commercial real estate advisor with Studley in Washington, DC. In that position, Charles represented firms in over three million square feet of lease and purchase/sale transactions. At MIT, Charles focuses on the financial, legal, design and technology aspects of the real estate industry. His thesis rese-arch involves creating a model for understanding innovation in real estate products.

EMILY ROYALL

Master’s of City Planning student at MIT emphasizing in City Design and Development. She received a B.S. in Neuro-science and a B.A. in Plan II from the University of Texas at Austin. In her transition to city planning, Emily is interested in transforming and re-imagining our relationships to cities in the age of Information. In her graduate work at MIT, Emily has studied digitally mediated urban development, and its impact on human behavior and urban culture. She hopes to carry forward her knowledge and experience to promoting healthy, inclusive cities in the 21st century.

DANIEL FINK

Daniel is a SMArchS Candi-date at the MIT’s School of Architecture and Planning. His research is focused on advan-ced computational methods to bridge the domains of urban design, planning, and real esta-te. Daniel was the Founder and Director of Urban Agency a computational urban design & research consultancy, and also a founding member & Project Architect at Grimshaw Archi-tects’ Sydney studio. Daniel is a Teaching Assistant at MIT, a tutor at a variety of Australian universities, exhibited & publis-hed with University of Techno-logy Sydney, shortlisted for the 2014 Australian Pavilion at the Venice Architecture Biennale.

• ANDREACHEGUT• DAVIDGELTNER• DANIELFINK

RESEARCH PLATFORM SNAPSHOT

THE PATH OF INNOVATION FOR DATA, PRODUCTS AND PROCESSES

THE CRE TECH DATABASE

INNOVATIONCITIES

PLACES&

PEOPLE

INNOVATIVEPRODUCTS

SPACES&

TECHNOLOGY

THE IDEAL

DEVELOPER PARTNER

REAL ESTATETECHNOLOGY

HUB

• NYMARKETDATAANALYSIS

• DATAAGGREGATION

• MASSINGDATAFROMTRADITIONALANDNEWPROVIDERS

• MAPPING21STCENTURYAGGLOMERATION

• COMPREHENSIVEACCELERATORDATABASE

• LINKINGFIRMPERFORMANCETOPLACE

• LINKINGINNOVATIONTOTHECREPRODUCTLIFECYCLE

• THECREREALESTATEPRODUCTHYPECYCLE

• PRODUCT,PROCESS&ORGANIZTIONALINNOVATIONSINCRE

• CRETECHCOMMUNITY

• DATASCOUTINGANDEXPOSURE

• NETWORK&ENGAGEMENT

• KNOWLEGESHARE

RESEARCH TEAM

RESEARCH TEAM

• THEIDEALDEVELOPERSURVEY

• HIDDENVALUEINREALESTATEDEVELOPMENT

• ABENCHMARKINDEVELOPMENT

RESEARCH TEAM

RESEARCH TEAM

RESEARCH TEAM

• ANDREACHEGUT• DAVIDGELTNER• CHARLESSTEELMAN• ALISONCROWLEY• EMILYROYALL

• ANDREACHEGUT• DAVIDGELTNER• DENNISFRENCHMAN• STEVEWEIKAL

• ANDREACHEGUT• STEVEWEIKAL

• ANDREACHEGUT• DAVIDGELTNER• DENNISFRENCHMAN• ISABELTAUSENDSHOEN• ANNIERYAN• STEVEWEIKAL

THE CRE TECH DATABASE

THE CRE TECH DATA BASE

AN R&D SPACE FOR INNOVATION IN THE BUILT ENVIRONMENT

1 DATA AGGREGATORS COME TOGETHER

PRICE DYNAMICS IN MOST VALUEABLE REAL ESTATE MARKET

THE FUTURE OF REAL ESTATE DATA2

3

RESEARCH TEAM:

DAVIDGELTNERANDREACHEGUT

FROM ANALOGUE TO DIGITAL

THE GROWTH IN DATA PLATFORMS

SOURCE: CBRE - CRE TECH YEAR END REPORT 2015S

NEW DATA LANDSCAPES ACROSS DIMENSIONS

A PLETHRA OF NEW PLATFORMS

$186 $218$446

$1,142

$1,714

$1,869

$2362011 2012 2013 2014 2015 2016 YTD

40

70

105

170

191206

$236

Dollars ($M) Deals Projected Deals

Source: CB insights

Urban Tech Financing History: Deals and Dollars2011 - 2016 YTD (2.16.16)

A GROWTH IN CAPITAL TO THE SECTOR

PRIVATE EQUITY CONTRIBUTIONS TO - REAL ESTATE TECH -

SOURCE: CB INSIGHTS, QTR 2 2015S

Digital Map Products

RealConnex

AnySizeDeals

CityFeet.comOfficespace.com

Compstak

IdealSpot

WeWork

Offices.netHiRise

PivotDesk

LiquidSpace

CoreLogic

TreppReal Capital Analytics

(RE)meter

REIS ReportsCrediFi

Actovia

Advanced REICoStar

Xceligent

PiinPoint

PropertyLineSiteCompli

AxiometricsProperty Shark

EDR BuildFax

First American Data Tree

ReonomyProspectNow

Crelow

StreetEasyFloored

EsriRedfin

Zillow

LoopNETCreate.io

CityZenith

SmarterBetterCities CubeCities

Matterport

AgorafySpotCRE

Catylist Spacelist

RealMassive42Floors

TheSquareFootDigsy

RofoBuzzTarget

CIMLStheBrokerList

Broker D

atabases

Dem

ogra

phic

s

M

ortgage/F

inanacial D

ata

Short-term / Coworking Space

Lease/Sales Transactions

Ownership Info

Geolocation/Visualization

List

ing/

Avai

labi

litie

s

Property Data

CHEGUT AND FINK, 2016

DATABASE CLUSTERING

UNLOCKING THE DATA GENERATING PROCESS

CRE TECH DATA BASE

AN R&D SPACE FOR URBAN DATA COLLECTION

• ONE MARKET THAT HAS THIS DATA OPPORTUNITY IS NEW YORK CITY (NY) AND ITS BOROUGHS. • THE PROPERTY MARKET IN THE NEW YORK CBSA IS ONE OF THE MOST COMPETITIVE GLOBALLY, WHICH OFFERS POTENTIAL INSIGHTS ON A LARGE COLLECTION OF INNOVATIVE PRODUCTS, PROCESSES AND DATE ENTERING THE NY PROPERTY MARKET OVER THE PAST 15 YEARS. • WE CAN COMBINE NEW AND EXISTING DATA SOURCES: REONOMY, COMPSTAK AND GEOTEL OFFER NEW DATA SOURCES AND NCREIF AND RCA ARE EXISTING DATA SETS WE CAN EXPAND UPON. • COMBINED, THIS DATASET OFFERS INSIGHTS ON CORE ASPECTS OF NY PROPERTY VALUE – AIR VALUATION, BUILDING COMPONENTS (CAP EX, OP EX) GROUND INFRASTRUCTURE – NOT TO MENTION CORE VA-LUATION METRICS FROM APPRAISALS, RENTS AND TRANSACTIONS.

•

USING NEW YORK CITY AS A DATA LABORATORY

CRE TECH DATA BASE

DATA MASSING FOR CRE DEVELOPMENT AND PERFORMANCEINFRASTRUCTURE

PLANNING

VALUATION

CHEGUT AND FINK, 2016 -- DATA PROVIDERS OMITTED

Zillow/Trulia

Create.io

Cre

diFi

RE Meter

Opportunity Space

NCREIF

Rea

l Cap

ital

Ana

lyti

cs

C

ompstak

ReonomyMortgage Details

Lender

Sale Date

Units

Floor Space Use

Lease Terms

Rent Rates

Investor GroupInvestor Type

Investment Volume

Investment Properties (#)Acquisitions

Dispositions

Holdings

Class

Market Value

NOICapEx

Acquisition Costs

Administrative ExpensesMarketing Expenses

Utilities

Maintenance

InsuranceManagement Fees

Property Taxes

Property Location

Assessed Value

Tenant EBITDA Margins

Tenant EBITDA Growth

Tenant Net Revenues GrowthTenant Gross Profit

Tenant Current Ratio

Tenant Debt/Equity

Tenant Net RevenuesTenant Asset Turnover

Tenant ROE %

Tenant ROA %

Loan AmountLoan Seasoning

Owner/Landlord Details

FAR

Lot coverage (setbacks, widths, areas)

Land Use

Regulations & ZoningTenant Name

Occupancy req's

Parking req'sOther Land Use Conditions

Nearest Transit OptionsWalkability

Zipcar Bike Share

Avg. Commute Time

Zipcode Cars/Household

Property Type

Size

Purchase DatePurchase Value ($)

Year BuiltBedrooms

BathroomsListing Period

PLAYING IN THE DATA SANDBOX

UNDERSTANDING DATA SYNERGIES AND NEEDS

-Air valuation

-Building components

Create data to identify building

components

-Ground infrastructure

-Ownership and tenancy

Identify ownership

-Operating and Capital

Expenditures

Link in changes to building

DECOMPOSING VALUE WITH DATA

New and old data sources allow for greater building descriptives

FINK, 2016

MAKING NEW INTER-DISCIPLINARY CONNECTIONS

LINKING DATA ACROSS ABSTRACT BARRIERS AND FIELDS

INNOVATIVE PRODUCTS

INNOVATIVE PRODUCTS, SPACES AND TECHNOLOGY

Linking Innovation to the Built Environment

1 IDENTIFYING INNOVATION IN THE BUILT ENVIRONMENT

OBSERVE INCENTIVES PROFITS (LOSSES)

A LANGUAGE OF INNOVATION FOR BUILDINGS 2

3

RESEARCH TEAM:

DAVIDGELTNERANDREACHEGUTCHARLESSTEELMAN

DRIVERS OF INNOVATIVE REAL ESTATE PRODUCTS

LINKING INNOVATION THEORY TO THE BUILT ENVIRONMENTThere is a nascent field within economics on innovation. Our work grounds innovation theory to the built environment. The path of innovation is important for understan-ding the adoption of new technologies and the system that has developed to bring new products and processes to the market efficiently. The stage of innovation – R&D, invention, innovation and diffusion – is an important consideration in understanding costs, human capital requirements, value changes and market incentives.

IDENTIFYING INNOVATIVE PRODUCTSCore to any analysis on product innovation is the identification of innovative/ non-traditional real estate products and their link to financial incentives. A primary con-tribution of this research line is the identification and search for innovative real estate products. We develop a framework for anchoring the ’products’ into an innovati-on typology and language within the context of real estate that links back to core economic expectations of supply and demand in the market place.

Identification is key to isolating the period and space for the innovation at the last two stages within the innovation system. Here the real estate market needs a name, understand the extent of innovation difference in the system, human capital requirements and where the innovation is in the market lifecycle. In addition, we isolate the value drivers of demand, supply, any value differences and sources of value changes and resources for profit protection like patents or the imitation gap.

THE PATH OF INNOVATION IN REAL ESTATELike other markets, commercial real estate also undergoes these stages of innovation across types of innovation. Commonly, innovation is associated with changes in processes. When applying process innovation to the built environment, one example is a process innovation in construction and recently the use of robotics. Figure 1 highlights examples of the process innovation path starting with basic research – R&D - in micro-bots that self create new structures through magnetic fields; prototypes – inventions - of 3D printing robots for onsite wall construction; innovative firms – innovation - that take to market brick laying robots or the recent scaling – commercial diffusion - of remote controlled robots in structural demolition. Each stage of the path has a role in decreasing or sharing costs, creating or identifying value and impor-tantly differentiation on where a process is in its arrival to the market place.

VALUE DRIVERS OF INNOVATIONThere are three pillars of innovation – process, organization and product – that generate technological progress. There is the development of new commercial real esta-te products that are either taking up new developments or giving new economic, physical or functional purpose to existing buildings. From green buildings meeting the market demand for energy efficient and sustainable structures to data centers, cell towers and fiber-lit buildings meeting the exponential digital demand of data bytes and to supertall skyscrapers serving the burgeoning market for mixed-use development and billionaire capital. Real estate product innovations are the main focus of this research line.

Importantly, there are considerations for the relative investment performance of the assets in the short- and long-run. Our research investigates the investment per-formance of innovative products as a group and singular innovations, if possible. In this way, we observe incentives for investing in innovative real estate products over time, potentially identify long-run dynamics of innovative products and help discern for the real estate sector how a niche becomes mainstream.

INNOVATION IN COMMERCIAL REAL ESTATE

THE DRIVERS OF INNOVATION RENTS

MEETING DEMAND• Identifying and developing/redeveloping the physical, functional and economic use of a site serves as an important driver for innovation in commercial real estate.

DEMAND MOMENTUM• Demand may not necessarily be linear in time and may possess jumps, which make it difficult (uncertain) for expan-ding building development.

SUPPLY CONSTRAINTS• Innovation thrives on scarcity. Innovators that can supply a scarce product, resource or commodity are rewarded with monopoly rents.

EFFORT COSTS FOR PRODUCT AND PROCESS INNOVATIONS • Innovation requires effort: research, planning and development. Effort is not cost- less. Thus, a fundamental change in the process of construction or the redefinition of the construction process to serve a new type of need is likely to be costly.

SHORT VS. LONG RUN DYNAMICS• Competition to develop useful structures that can also meet demand will likely ensue over time. However, in the short run, supply constraints from suitable real estate and construction periods can protect innovation value in the short run.

THROUGH WHAT MEANS...

Product  

Organiza/on  

Process  

     

Transforming    Real  Estate,  Districts  

&  Ci/es          

New  product  types    for  the  marketplace    Serves  a  new  or  latent    demand  in  the  market    

New  processes  in    construc/on    

 Serves  the  market  on    

producing  physical  capital    

New  organiza/onal  systems    for  monitoring,  measuring  and    

implemen/ng  innova/on    

Supports  innova/on  

BASIC RESEARCH

Fundamental knowledge

De (Re) – construction

Government agencies & universiti-

es, laboratories

HC: Scientists

PROTOTYPES

Applied research

Discovery of practical application

Patents, copyrights, trademarks, trade-secrets

HC: Engineers

TAKING TO MARKET

Business Development

Taking products, process & or-ganizational technical change to commercial use

Cost is financed by market

HC: Entrepreneurs

SCALING

Uptake and Refinement

Market scale through imitation

Costs decrease standards

HC: Market Actors

INVENTION INNOVATION DIFFUSION

INNOVATIVE PRODUCTS, SPACES, AND TECHNOLGY

Adopting innovation at the right stage ...

R&D

REAL ESTATE PRODUCT INNOVATION CYCLESPRODUCT LIFE CYCLE + LAND VALUE

REAL ESTATE PRODUCT INNOVATION CYCLESINNOVATIVE PRODUCTS + HYPE CYCLE

INNOVATIVE PRODUCTS SPACES AND TECHNOLGY

A suite of innovative products (26 new innovative products)

Identification Innovation name LEED, Energy Star, BREEAM… Micro-dwellings, Micro-units, Lilliput

properties, aPodimentsData Centers, Co-location Facilties, Server

Farms, The CloudInnovation Typology Product (Systems) Product (Architectural) Product (Architectural)

Human Capital

Human capital needed for development: knowledge of design, engineering advancement, material changes and construction efficiency

Design, Pre-fabrication, Offsite Engineering, Logistics, Modular Construction, Creative Public-Private Partnerships, Land Acquisition, Building Codes

Telecommunications, Network Engineering, Electrical Engineering, Power Generation, Building Codes

Innovation System Commercial diffusion Innovation Commercial diffusion

Lifecycle of each stage:

Multiple stages – green buildings started in the 1970s during the ‘ 1973 Oil Crisis’ from the OAPEC oil embargo – govtsencouraged conservation and reduction in energy demand

R&D, Invention, Innovation; R&D and Intellectual Property protection are happening rapidly.

Multiple stages – 1970s data centers started with the creation of the internet at universities - 1990s development of the commercial backbone of the internet -2000s monopoly busting broke up the Bell network to create more building competition

Value DriversDemand Institutional investors, government

tenants, Institutional investors, government tenants,

Telecom, governments, corporates, stock markets, the cloud

Supply 13.5% of CRE stock in top 30 marketsLittle over a 1,000 units today, but extensive regulatory push is driving growth in residentially supply constrained cities

5,900 at least commercial buildings

Value Precedents 16.5% Trades, 7.9% Effective Rents Small samples: 66% more in rents 23.6% more than the commercial real estate stock

Price/Market Size Effect Price Effect: Low Supply - High Demand Price Effect: Low Supply - High Demand Price Effect: Low Supply - High DemandCost change 0 to 3% more 0 to 10% more 0 to 15% more

Profit ProtectionImitation gap - Spread between architects, engineers and developers learning the product

Imitation gap - Spread between architects, engineers and developers learning the product

Imitation gap - Spread between architects, engineers and developers learning the product

Underwriting distinctionsGreen leasing, incentives tied to energyefficiency, water efficiency and waste reduction

Product underwriting is not dissimilar from traditional products

Leases and purchasing made on the basis of kWh, supply is impacted by Moore’s law, demand is from digital bytes and not h t

Green buildings Micro-dwellings Data centers

INNOVATION

SPACES

PEOPLE

CITIES

&

RESEARCH TEAM:

ANDREA CHEGUTDENNIS FRENCHMANDAVID GELTNERISABEL TAUSENDSHOENANNIE RYANSTEVE WEIKEL

INNOVATION PLACES, SPACES & PEOPLE

Linking economic growth to a place

1

2

3

THE FIRST COMPREHENSIVE ACCELERATOR DATABASE

INNOVATION DEMAND

MAPPING 21ST CENTURY AGGLOMERATION

THE EVOLUTION OF URBAN FORM

BUILDINGS AND URBAN FORM SHIFT FOR ECONOMIC GROWTH

FACTORIESOFFICE

BUILDINGSINCUBATORS ACCELERATORS

CO-WORKING

INDUSTRIAL CLUSTERS

CHARACTERIZED BY A HIGH CONCENTRATION OF MANUFACTURING

ENTERPRISES THAT WERE ENGAGED IN SIMILAR OR COMPLIMENTARY WORK (MULLER AND GROVES,

1979)

SCIENCE &TECHNOLOGY

PARKS

SUBURBAN AND ISOLATED LAB AND FIRM CLUSTERS THAT ARE DEVELOPED TO

COMMERCIALIZE RESEARCH AND ATTRACT SCIENTISTS

FROM INDUSTRY AND ACA-DEMIA (DAHLSTRAND &

SMITH, 2009)

NEW

CENTURYCITIES

DEVELOP HUMAN AND SOCIAL CAPITAL IN A WAY

THAT WILL MAKE BUSINESS SECTORS SUCCESSFUL

(JAROFF, FRENCHMAN & ROJAS, 2009; FLORIDA,

2014; HUTTON, 2004; BUG-LIARELLO, 2004)

INNOVATION

DISTRICTS

MIXED-USE TRENDS ALTE-RING THE LOCATION PRE-

FERENCES OF PEOPLE AND FIRMS. RE-CONCEIVING THE LINK BETWEEN ECONOMY SHAPING, PLACE MAKING AND NETWORKING (KATZ AND BRADLEY, 2013; KATZ

AND WAGNER, 2014)

2005-PRESENT1980 - PRESENT1930 - PRESENT1870 - PRESENTTIME

WORKER DEMAND

BUILDING PRODUCT

URBAN SCALE

REAL ESTATE PRODUCT INNOVATION CYCLESINNOVATIVE PRODUCTS + HYPE CYCLE

ACCELERATORS

CO-WORKINGINCUBATORS

SOURCE: REAL ESTATE INNOVATION LAB, MIT CRE, CHEGUT, GELTNER & GELTNER, 2016

ACCELERATORS

PERISH, PIVOT OR GROWDEFINITION - AN ORGANIZATION PRO-VIDING ENTREPRENEURSHIP EDUCATION FOR A LIMITED TIME TO A COHORT OF SE-LECTED NEW VENTURES WHO BEGIN AND GRADUATE TOGETHER. ACCELERATORS ARE INTERESTED IN ACHIEVING THE SAME OVERALL GOAL OF HELPING TO IMPROVE THE ODDS OF SUCCESS FOR STARTUPS.

FIRMS & CLASSES EQUITY & CAPITAL

TENURE

510 396 426US BASED

ACCELERATORSUS CITIES FIRMS GRADUATE

PER YEAR

AVGMINMAX

MONTHS IN RESIDENCE

5.67 %MEAN EQUITY STAKE TAKEN

4 MONTHS

2 WEEKS

48 MONTHS

$62,103MEAN CAPITAL

GIVEN

THEMATIC FOCUS

11 2FIRMS

PER CLASSCLASSES

PER YEAR

0 % 10 %MIN MAX

$2.5K $120KMIN MAX

4 20MIN MAX

1 15MIN MAX

411 GENERAL

TECHNOLOGY

9 EDUCATION

11 HEALTH

SOURCE: REAL ESTATE INNOVATION LAB, MIT CRE, CHEGUT, FRENCHMAN, RYAN, TAUSENDSHOEN, 2016

ACCELERATING FIRM GROWTH & PERFORMANCE

THE RISE OF ACCELERATORS

SOURCE: REAL ESTATE INNOVATION LAB, MIT CRE, CHEGUT, FRENCHMAN, RYAN, TAUSENDSHOEN, 2016

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BostonDetroitBuffalo

Seattle

Montreal

CambridgeRochester

St. Louis

Santa Monica

Philadelphia

San FranciscoFremont

Syracuse

New YorkBrooklyn

Sunnyvale

San Diego

Esri, HERE, DeLorme, MapmyIndia, © OpenStreetMap contributors, and the GIS user community

Innovation DistrictsG Existing/Developing

G Planned

CoWorking Spaces! 1 - 2! 3 - 9

! 10+

Accelerators and Incubators! 1 - 2

! 3 - 9

! 10+

Patent Licenses500 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 +

US - INVENTION AND INNOVATION

Identifying clusters of innovation, people and places

SOURCE: REAL ESTATE INNOVATION LAB, MIT CRE, CHEGUT, FRENCHMAN, RYAN, TAUSENDSHOEN, 2016