Is Your Real Estate Job Safe From Robotics And Automation?
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Technology has been making its way through industries like a bull in a china shop, but commercial real estate has remained largely untouched — until now.
Get ready for all of that to change, according to a new report by commercial real estate brokerage and services firm Cushman & Wakefield. The real estate industry will face disruptions with the onset of electric and driverless vehicles, ride-sharing, blockchain and cryptocurrencies, drones, 3D printing and autonomous mobile robotics.
Many of these technologies, though still nascent, have already hit the market.
In Las Vegas, a new cannabis dispensary superstore has big plans for entertaining future customers using robotics tech. Forget pre-conceived notions of dancers or Elvis characters — Planet 13 is bringing in robot orbs from Germany for aerial shows.
“I think the ability to automate entertainment in a unique space like Planet 13 will continue to revolutionize business on a commercial level,” Planet 13 Director of Marketing David Farris told Bisnow. “Automation is going to be a big part in the future of business.”
The cannabis superstore is not alone. Robots are increasingly showing up in physical stores and commercial properties across the globe. They can clean hotel rooms. They can serve coffee, fill in for mall security and deliver groceries. They can even assist property managers.
Commercial real estate in general has been slower to adapt to technology changes, in part due to expenses involved with changing infrastructure. Traditionally, a wait-and-see approach keeps away unnecessary investment in trends that may fizzle, such as battery-powered cars or fiber optics.
In this case, however, the industry does not get a pass.
Major technology changes in CRE have been mostly seen in the PropTech space, but otherwise, the industry has remained relatively undisturbed by tech. This may not be the case in the next decade, Cushman & Wakefield reports.
“There have been a lot of changes to commercial space based on emerging technology,” she said. “When we describe e-commerce and the change in retail space and industrial space, what are some of the expectations of how these are going to affect commercial real estate?”
Is Employment At Risk?
For the most part, commercial real estate professionals' jobs are safe. However, automation advances will challenge 14% of human roles, which could affect about 13 million people in the United States. About 32% of jobs could see radical changes in how they are carried out, according to a report by the Organisation for Economic Co-operation and Development.
Predictably, jobs most at-risk are those that require no training and can be easily automated. Jobs safest from robot takeovers are those that require cognitive thinking or emotional or social intelligence.
In commercial real estate, industrial jobs are at the highest risk of being replaced by automation. These include postal and courier activities, clothing manufacturing, mining and quarrying, and manufacturing of food products or wood. This is a practice already being implemented — for example, Nestlé and XPO Logistics are creating a test bed facility for robot technology.
The industrial space has been revolutionized by e-commerce, Romero said.
“That’s going to affect not just commercial real estate, but the trucking industry, market services and changes to the way we use commercial space,” she said, adding that new structures are already being built and maintained to accommodate these changes.
Retail jobs at high risk are those in the food and beverage service industries. Robot bartenders are able to create 120 cocktails an hour at bars and on cruise ships.
Office jobs fall mostly in the low and moderate risk of a robot takeover. Moderate risk jobs include architectural and engineering, employment activities and real estate jobs. That said, Romero believes some of the functions performed by real estate professionals may become automated.
Within the multifamily sector, residential care jobs in senior housing are moderately at risk.
How To Prepare
Where technology will take away jobs, it also has the ability to give them back, at times in a bigger way. According to Cushman's report, technology has created more jobs than it has eliminated.
“We are going to gain jobs on the cognitive side,” Romero said.
Training for these new roles will be crucial to keep those in the industry on top of changes ahead. The training will need to be flexible as technology itself will be updating constantly.
Users will come to expect and demand certain amenities from real estate spaces, and buildings should be designed with flexibility in mind, Romero said.
Dealpath Inc. CEO Mike Sroka said the role of high-quality, structured data is often overlooked in conversations about technology adaptation. Dealpath is a deal management platform for institutional investors in the real estate industry. Software and data services that will rise to the forefront include discovery, transaction and asset management services, he said.
Most importantly, having a plan in place always helps when preparing for transformation.
“Change is always hard, and real estate firms may not have experience in evaluating and adopting new technology. We recommend starting with an evaluation framework that helps align challenges with solutions and ensures you’re within budget,” Sroka said. “Once you’ve implemented the solution, make sure the organization adheres to a rollout plan to achieve the desired results.”
Cities likely to adapt to the changes best are the ones that are already integrating smart technologies into their framework. San Francisco, New York, Boston, Washington, D.C., Los Angeles and Austin are among those listed in the report as ready for revolutionary technology changes.
One thing these cities are doing well is inviting technologically advanced companies into their cities.
“They need to focus more on supporting innovation and providing training and opportunities for companies who are looking for funding to be able to have a place to take the funding and utilize it,” Romero said. “If they follow what these tech-centric markets are doing, it will help them move along the curve.”
When Will The Tech Revolution Begin?
Romero said different technologies will affect industries at different times.
“I think commercial real estate is its own beast,” she said. “With other industries, technologies are implemented immediately. Look at ride-sharing, for instance. That technology came about very recently, and it has had a very significant impact on taxis across the world.”
Real estate changes associated with something like ride-sharing would be minimal to start, with a slight impact on office space for taxi companies, she said. Larger changes wouldn’t be seen for a much longer period.
“When it comes to commercial real estate and the users of real estate, the main takeaway is that everything we talked about with technology — the flexibility of the space and owner’s ability to change their space to better fit how their occupiers are using it — is going to be key,” Romero said. “As an investor, look at spaces that are easy to structure out to meet the changes needed for occupiers.”
Proptech, combined with concierge, combined with big data will move at the speed of occupier expectation, Romero said. Autonomous vehicles are expected to affect users in 15 to 20 years, while office and retail spaces are starting to make changes to their flexibility right now.
“It’s a sliding scale for each technology,” she said.