Technology is, without a doubt, the biggest disruptor in the commercial real estate industry. For years, players in the real estate industry have been relying on simple data collection. However, this is not enough. Organizations need to use technology in a way that will give them a competitive edge in the marketplace.
Since the recession, disruption has been evident in the real estate industry but at a slow pace. Some players have taken problems in the industry, turn them on their head and solved them. For example, upstart companies like Walker & Dunlop are looking to disrupt the way things have always been done in the real estate industry.
Biggest Disruptors in Corporate Real Estate (CRE) in 2018
In the era of technology, what distinguishes people, product and companies is the ability to improve things in a way that puts them ahead of everyone else. Below are the most significant tech trends that will make an impact on the corporate real estate sector in 2018.
Big Data Property Management
Innovation in property management technology benefits investors, landlords, property managers and tenants. Modern property management solutions have analytics features that allow managers to track everything in just a few clicks, from rent rolls to maintenance. Investors can see real-time updates of important metrics such as vacancies, properties occupied and their locations, net income from the properties, tenants and so on.
Particular CRE property management properties are incorporating smart technology to improve efficiency and lower costs. For example, QuickFMS is a complete facility management program with capabilities such as reservation and resource manager, help desk, maintenance management, physical asset management, space management, and property, lease and tenant management.
Big data can help investors and property owners analyze different aspects of their business or property. In turn, owners can make smarter decisions regarding disposition, management or acquisition. Companies like Reonomy and Rentlytics are at the forefront of CRE big data.
Commercial real estate will be significantly impacted by technology in the future. Communication between technology-driver and data products is already prominent in the healthcare industry. Smart learning approaches will transform the decision making process in the CRE industry. For example, the technology would be able to understand a person’s or company’s office space requirements and match them to available buildings.
Therefore, instead of hiring a real estate broker to survey available space in a size range, smart learning systems would look at multiple factors such as peer locations, building style, pricing, and amenities and provide a short list of options that match all preferences. This will greatly improve efficiency in the real estate process.
Millennials and gen-Z employees are driving technology changes in the CRE industry by demanding more flexible access to real estate space and amenities. These employees favor a culture that leans more towards hospitality than office space. This explains why co-working spaces are popular and successful. Co-working spaces offer companies the culture they want and the flexibility that is not readily offered by other offices space solutions.
Internet of Things (IoT)
IoT is powerful technology tool that can be utilized in property management by real estate professionals. IoT can be integrated with facilities management software to help professionals reduce operational costs, improve sustainability and lower energy consumption. CRE managers can use IoT technology to strengthen security at their facilities and keep track of their assets.
Real estate companies that use IoT have various competitive advantages, including:
- Better property management: IoT can provide facilities managers a clear overview of their operations at any time. For example, organizations can know when their properties need unscheduled maintenance. This information can help in improving the value of the property and overall tenant satisfaction.
- IoT can be programmed to manage various property utilities such as water, sewerage and electricity to coordinate maintenance services.
Real estate companies that fail to take the advantage of IoT will have to contend with high operational and property maintenance costs.
Blockchain technology can improve CRE transactions. The technology provides an incorruptible digital ledger where real estate transactions can be recorded. This is beneficial for both real estate owners and investors.
Blockchain technology can help to determine the historical ownership of a property. Therefore, buyers can quickly identify any issues related to the property such as liens, taxes, past owners, value, and so on.
Blockchain technology can also be integrated with workplace management system software to enable secure transfer of money and assets. The technology can benefit commercial real estate companies in the following ways:
- Smart contracts: Instead of using brokers or representatives that can make errors or may have nefarious intentions, companies can use blockchain technology to sign real estate contracts. Through blockchain smart contracts, all transactions are processed correctly and fund is transferred to the appropriate recipients through digital technology.
- Fraud protection: Blockchain technology can be used to make digital certificates for properties. This will help to secure both buy and sell transactions. Blockchain technology makes it impossible to forge property ownership documents. This will solve the problem of making false real estate listings.
- Disintermediation: Blockchain technology makes processing of real estate transactions fast and easy. The technology can retrieve important details about a property (e.g. physical attributes, building performance, occupancy, etc.) online, thereby eliminating the long evaluating processes.
Blockchain is still in its infancy in many industries but its benefits for the real estate market cannot be ignored.
The above are some examples of how technology will disrupt the corporate real estate industry this year. However, these are not the only tech disruptions to expect. Other disruptions that are bound to change the real estate industry in the coming years include tech-enabled brokerages, virtual viewing, mortgage tech and property information.
Amit Prasad is the founder and managing director of SatNav Technologies and has business interests in a wide range of IT products. SatNav Technologies is an IT products company focusing on cloud based map data products and a pioneer in GPS, FMS & LBS Technologies. The product suite includes SatTracx in-the-field location based solutions and A-mantra in-the-office facilities management solutions. QuickFMS from a-mantra is a cloud based facility management system which enhances organization’s efficiency.