5 Technologies To Watch For In CRE
Disruptive technologies have been center stage for years, but commercial real estate seems to be waiting in the wings. Digital tools that could revolutionize real estate are there for the taking, but adoption is slow across the industry, where deals are more often made with handshakes than with emails.
“The real estate industry has some catching up to do,” Berdon principal Jigar Shah said. “Technology has overhauled the way business is done in fields from finance to medicine to manufacturing, but CRE has been lagging when it comes to embracing disruptive technologies.”
In addition to his responsibilities as an accountant, Shah helps advise real estate companies on where technology can make the largest differences in their businesses. He sat down with Bisnow to talk through five technologies that are awaiting innovative CRE companies, and how they could change operations and employment throughout the industry.
1. Data Analytics
Data is the lifeblood of the real estate industry. Using digital tools, investors can gather intelligence and identify trends that can guide them to new deals and investment opportunities. Shah noted how even unorthodox variables can provide investors with a leg up.
“Investors can look for local patterns, like the number of pool permits issued or the number of new restaurants in a given area,” Shah said. “Stitching these variables together with machine learning makes it possible to take what might seem like unconnected streams of data and turn them into meaningful and actionable insights.”
Data analytics can also be a huge help in budgeting and bidding for both contractors and investors — analyzing comparable projects can give investors more accurate forecasts of what new projects will cost.
2. Robotic Process Automation
Commercial real estate companies spend an inordinate amount of time on repetitive tasks, from accounting to refreshing financing offers. Now, software suites have evolved to speed up some of the most time-consuming facets of CRE. Robotic Process Automation, or RPA, software can overhaul companies’ accounting and finances by tracking invoices, payments, renewals and credit applications. RPA can free up precious hours for employees to focus on tasks that actually add value.
Beyond the back office, RPA has applications in market research and due diligence, Shah said. It also holds value for property and facility managers, who can use digital tools to overhaul many of their administrative tasks. Repetitive, manual and nonjudgmental processes are ideal candidates for RPA.
Though it is best known as the digital backbone for cryptocurrencies like bitcoin, blockchain technology has numerous applications for real estate. Blockchain is a type of distributed ledger system that can verify transactions and ownership without the need for any central governing body. That means that contracts can be executed without having to work through a middleman like a bank or local government.
These “smart contracts” can speed up the rate of new CRE deals significantly all while protecting interested parties from fraud — since everyone on the blockchain owns a copy of the ledger itself, smart contracts are much more secure than contracts that sit in a single digital repository.
“Digital leases can automatically withdraw rent payments, and a secure electronic record can quickly display a potential buyer’s full credit history,” Shah said. “Blockchain should bring much-needed transparency to the buying and selling process, with reduced costs.”
4. Smart Building Tech
Forward-thinking building owners have already invested in artificial intelligence solutions that can make their buildings “smarter.” These include systems that can optimize heating and cooling to reduce energy spending and sensors that track how office space is used, which can help companies reduce their physical footprints by 30%.
“With sensors, an HVAC system could tell you right before a fan was going to break, and trash cans on each floor could sense when they were getting full,” Shah said. “That could mean hundreds of thousands of dollars every year in saved maintenance costs.”
As it stands, he said, there is no single umbrella solution for smart buildings, and companies should be wary of implementing too many disparate AI systems. However, as the systems begin to integrate with each other in the coming years, that concern should fade away.
5. Virtual and Augmented Reality
Despite real estate’s rooting in the physical world, many of today’s buyers and renters prefer to find places to live and work online. In order to give potential tenants a sense of their future space without leaving their chairs, real estate agents are turning to virtual reality applications, which can provide lifelike 3D tours of properties.
“Buyers can experience the scope and scale of everything from the showers in the bathrooms to the size of the windows in the living rooms to the view from the back patio, all without having to set foot on the property,” Shah said.
While virtual reality is immersive digital experience, augmented reality superimposes digital elements on a real-life objects or spaces through smartphones and other devices. CRE can take advantage of both technologies to give potential occupants a more personalized view of their future space, incorporating their layout and finish preferences. Not only do these technology applications reduce time spent on selecting an office space, they allow for a more targeted approach to serving occupiers’ needs.
This feature was produced in collaboration between Bisnow Branded Content and Berdon. Bisnow news staff was not involved in the production of this content.