Disruptive Technology and the Future of Commercial Real Estate
It’s obvious that the diverse field of commercial real estate—development, design, management and sales—is changing rapidly, influenced by emerging trends in business and technology that have an effect over a broad spectrum of industries. This new reality may initially be disruptive, but there are changes in store that will affect all aspects of real estate business.
Newer technology innovations will influence all asset classes of commercial real estate, according to a recent article in Forbes, including workspaces and shopping centers, distribution centers and offices. Retail operations have been most affected to date, perhaps, as evidenced by the growth of online ordering, but change is pervasive across the field.
While disruption is ultimately beneficial, introducing new efficiencies and possibilities, rapid change can be difficult. Market segments that do not keep pace with business demands by altering their tactics may find that playing catch up with new technology is an overwhelming task.
Here are the primary areas to watch:
Virtual Reality and Digital Imaging
The ability to “see” space before it is even built, combined with the potential to envision new projects and lease or sell space in advance, will unleash entirely new dimensions for commercial real estate professionals. The Building Owners and Managers Association International (BOMA), believes that embracing the new technologies is imperative.
However, BOMA reports that recent findings confirm that only four percent of owners and asset managers believe they are highly effective technology users. The association points out that early adopters benefit the most from any new technology. In order to become comfortable with new technology tools, achievers in the industry must make the dollar investment in such tools a priority, notes the report.
Such leaders place the focus on customer service and brand image, while the companies that trail in the field pay more attention to cost and time savings. It is clear that technology brings with it an entirely new interactive perspective for use by developers, management agents and sales and marketing professionals. By lessening reliance on geographic constraints, virtual reality and digital imaging both open new worlds—literally—to be tapped into by effective technology users.
As the global field of commercial real estate continues to expand, the importance of this new technology will also grow. BOMA also notes that early adoption “is crucial for technology effectiveness in CRE,” and that more than half of CRE professionals also believe that Artificial Intelligence and drone technology will play a major role in the future of commercial real estate.
Robotics and Drone Technology
A second segment of technology expected to have a major impact in the field of commercial real estate involves non-human labor-saving devices and drone technology. Both have implications for worker safety as well as the potential to save time and money to produce innovative results for both asset managers and the consumer or client. From robotic assistance on a jobsite to effective manufacturing and delivery capabilities through enhanced mechanical means, technology is destined to change business practices immensely in the coming years.
With the development of self-driving trucks and robotic delivery vehicles, the need for redesign of shopping centers, distribution facilities, office buildings and even municipal master plans is evident. The expanding menu of uses for both private business and military/governmental/security options is staggering, and the market is expected to grow exponentially in just a few short years. One thing is certain: Drones are no longer a fad or a hobby. They and their robotic cousins are today’s reality!
Artificial Intelligence
No longer the domain of science fiction, AI is also a reality in today’s technology, growing more important almost daily. While it may be intimidating to some extent, the primary benefit of artificial intelligence technology lies in its ability to collect and analyze data quickly and efficiently, freeing the commercial real estate broker or manager from tedious manual efforts. It is also, arguably, more reliable.
AI is not a substitute for market knowledge, competent decision-making and due diligence, but it represents a great benefit in terms of cost-effective time management and resource collection and allocation. Used properly, this sort of automation can increase the commercial real estate professional’s ability to respond creatively and deliver results in a more effective way.
As anyone dealing with real estate instinctively knows, cultivating personal relationships is the key to continuing success, in Scott County or elsewhere. Relying on technological tools to perform repetitive tasks and compile necessary information makes good sense in terms of both time and effort. Machine learning, statistics and data analysis, predictive analytics and and algorithmic projections are all in the general domain of computer capability. Even if you hesitate to call it artificial intelligence, this type of technology will be a part of the future in the field of commercial real estate. It’s time to embrace it!
