Why is knowledge centralized in individual heads in CRE

Tech is rewriting commercial real estate exponentially. Most coverage is news - who raised what, who bought what. This newsletter covers physics. Structural forces. Patterns before they’re obvious. Atoms and bits. Subscribe for updates →

the physics

Physicality is commercial real estate’s biggest strength and weakness at the same time.

Buildings are geo-specific - they don’t exist in the cloud. Unlike common commodities, buildings create spaces where people fulfill their Maslow’s hierarchy: security, sleep, family, work. This makes CRE fundamentally different from other industries (think finance, pharma, or FMCG). Yes, those industries operate IN buildings, but CRE provides THE SPACE itself.

Because business happens at specific geographic points, knowledge accumulates through physical presence. Think of a broker showing offices to potential tenants - in that simple operation, you already have two players gravitating toward one location. The knowledge isn’t in a system. It’s built with eyes, ears, touch.

This isn’t a process failure to fix. It’s physics. As long as buildings remain physical, knowledge remains embodied in the people who’ve been there.

the signal

Just recently, our data platform was challenged by a veteran broker. Where we see aggregated numbers across 6,000 properties, she sees real stories: ‘You’re wrong about this office availability. I was at that building today. X said they just signed the deal yesterday.’

She was right, yet wrong - while tech delivers value at scale (with error margin), the on-site knowledge approach is extremely limited to the narrow slice of remembered information. It’s about two fundamentally different types of knowledge. Hers is sensory and real-time. Ours is systematic and aggregated.

the translation

Tech founders think in scalability and leveraging margins. Passionate brokers think in on-site viewings, elevator small talk, memories of buildings they’ve visited. They feel the space. We see numbers.

Neither is wrong. They’re optimizing for different things.

Lesson for founders: Stop trying to make CRE ‘scalable like SaaS.’ The industry resists it for structural reasons, not because people are backwards.

Lesson for CRE executives: Stop pretending you can document your way out of key person risk. If your best broker’s knowledge lives in their head for 20 years, it’s like relying on a flawed CRM system with no persistent memory. You wouldn’t pay nor take responsibility for that system if offered. Your question isn’t ‘how do we capture knowledge?’ It’s ‘how do we design companies that don’t break when someone who’s been there for 20 years finally leaves?’

final thought

CRE will never scale like software, and that’s okay. The industry’s resilience comes from the same place as its inefficiency - people who show up to buildings, feel the space, and remember what happened there. Tech can make those humans faster and smarter, but it can’t replace the fact that you had to be there.