Technology in Commercial Real Estate
Innovation has accelerated across all sectors in the last year including technology in commercial real estate.
While the fundamentals of property rental and sales are unchanging, how we operate and communicate within the Commercial Real Estate (CRE) space is advancing – a process that was started prior to the Covid-19 pandemic.
Property, and all modes of business that come into it, is becoming more democratized. Huge global shifts in the way we live and work are unignorable for the sector and it must adapt.
Let’s look at some of the biggest paradigm shifts facing the CRE industry today.
COVID-19
COVID-19 has smashed through ‘business as usual’ for the Commercial Real Estate (CRE) sector; and it has wreaked havoc on construction, contracts, and physical viewings. Retail and corporate spaces have been hit the hardest with consumers and workers making a mass exodus to online shopping and makeshift home offices.
The demand for communal spaces will return, but it will just look a little different.
For example, the increasing preference towards open plan spaces may need to revert to smaller, safer sectioning. Policies relating to capacity and square footage per person may need to be addressed and commercial spaces may need to think of more creative, attractive ways to draw customers away from their laptops and back into the public arena.
Virtual Tours
Virtual tours are not a new concept for commercial real estate technology, but they’ve become invaluable after recent lockdowns. Virtual footage can offer much more than static images – especially in giving potential buyers, renters, or investors a feel for size, space, and layout.
The original disruptor in this space was Google Maps. Street imaging has become available to the public ensuring that there is no room for location bluffing or creatively angled shots. The more detail technology provides, the harder it is for agents and developers to obfuscate the truth.
The property sector is becoming more open, honest, and democratized (whether it likes it or not).
Augmented Reality
Agents and developers now have methods of selling incomplete sites like never before. Augmented reality (AR) can give buyers and investors a glimpse into the look and feel of a build before ground has been broken. 3D animated imagery can be projected onto real life video and photo to show scale, finish, and furnishing.
This new commercial real estate technology will be invaluable for garnering local support, legal permissions, and investment long after the pandemic has subsided. AR provides a glimpse into the future in a way that will accelerate investment and purchasing processes across the board.
Digital Twin
“Digital twin” are scans that replicate buildings within a virtual space that are extremely detailed and spatially accurate.
This technology delivers benefits for prospective buyers, and investors can ‘view’ buildings before they’re complete. The software duplicate can also be used to manage the buildings on an ongoing basis.
Digital twin scans can be provided to contractors as part of work instructions. Replete with mechanical and electrical information, they offer smart, efficient, and automatic checks of buildings and diagnostics on utilities.
Artificial Intelligence – AI
For commercial real estate AI, we’re not talking about robots. This technology helps with time-consuming contractual tasks.
Underwriting software can accomplish tasks in minutes that used to take a week to complete. It also plays a large role in real estate data. Intelligent computers use local, economic, and socioeconomic data to predict property trends. In some industries, such as industrial, developmental, or population-related, it often provides boom or bust predictions.
This has led the way to new housing and commercial development plans in addition to corporate planning. With lingering uncertainty around how, or when, employees will return to office settings, intelligent data is crucial.
Internet of Things – IoT
In a slow, but monolithic, revolution the Internet of Things (IoT) is changing everything for buildings management. The ability to control security, lighting, and utilities from a mobile device has big implications for landlord overheads.
Smart homes and smart offices are set to become highly efficient, both with regards to the environment and to its users. While some additions, such as highly responsive sensor lights, heat controls, or airflow management, will reduce costs, other additions such as automatic locks or touchless access will provide security and hygiene safety.
The responsibility of health and safety has never been greater. New restrictions and building management policies will require time, effort, and attention. Developers who provide these turnkey solutions for corporate clients will be given the edge.
PropTech
Many offices have gone from paper to digitization to cloud computing. The term “PropTech” is an embodiment of that process happening specifically within the property industry.
PropTech incorporates start-ups and SaaS that are disrupting and improving traditional processes, whether at the construction end, in tenant or buildings management, or on property investing platforms.
Similar in success to SaaS, PropTech positions the consumer at the heart of the transaction. It shifts the balance of power by providing access to data, insights, and affordable ways to buy and invest.
Final Thoughts On Commercial Real Estate Technology
The explosion of technology in commercial real estate will no doubt lead to faster build times, shorter sales cycles, reduced costs, and broader investing audiences. Agents, developers, and investors who embrace the change will see a bright future.
Virtual tours, augmented reality, digital twin technology, AI, IoT, and PropTech are all pieces of commercial real estate technology that are contributing to extensive change and disruption as well as opportunity. Are you taking full advantage of these new opportunities available? Your competitors are.