Top 10 Technology Trends Reshaping Commercial Real Estate
Whatever your role in commercial real estate, you know that staying on top of the changing landscape is critical. Keeping a close eye on industry trends will establish your place as a leader and improve your ability to foresee other changes in your field.
In this economy, learning about trends is important because it’s easier to implement improvements and cost-saving changes when you understand current real estate technology trends. Furthermore, approximately 78% of companies will implement proptech as a means to boost efficiency and cut industry costs ahead of a possible recession. By reading this post, you can find out why people invest more in proptech and if you should follow suit.
In this post, you’ll find an informative breakdown of the upcoming trends that are rippling across the commercial real estate scene. You’ll also learn how these innovative technologies can help shape your real estate endeavors. Plus, we’ll consider questions before investing in new tech.
What is proptech & why is it important?
Before we dive into the top trends, let’s take a moment to truly define what proptech is and why you should care about it.
Simply put, property technology (proptech) improves basic building functions. Often, this will be in the shape of automated services, access control systems, and smart devices.
So why is property tech important?
The commercial real estate market is a fast-paced and ever-growing industry. It’s complex and rife with competition. But technology for real estate is the solution to ensuring that everyday tasks and challenges are being met to keep the whole thing afloat.
In the most basic terms, technology for commercial real estate is meant to increase efficiency by decreasing the volume of tedious tasks.
Ten real estate technology trends
This list of ten trends is an encouraging example of the innovation taking place in the world of commercial real estate technology. Without these technological breakthroughs, construction, maintenance, and even investment, real estate wouldn’t be what it is today.
Keep reading to discover the next stars in proptech and how each of them is created to improve living, investing, and working in commercial real estate.
Trend #1: Virtual reality tours
Tours are the backbone of any potential leasing deal. Customers and would-be tenants want to see an available property before they lease in order to conceptualize how it will work for them.
However, today there are more and more people spread out over the country. While this can be frustrating, it also provides an opportunity for modernization using VR technology for virtual tours.
With every innovation, there’s a feeling of resistance, and virtual reality is no different. Some still prefer to remain firmly in the 2D when it comes to viewing properties. Yet, there are benefits to using VR real estate technology for prospective tenant tours. For example, VR tours cut down on the need for more staff to be present.
Moreover, VR real estate tours are extremely marketable assets that may help set you apart from the competition.
Trend #2: Artificial intelligence for performance
When it comes to artificial intelligence, increased performance is the key outcome. Depending on what you are hoping to achieve, a couple of different types of AI have proven useful in commercial real estate.
Types of artificial intelligence and what they do:
- Natural language processing: The tech behind this artificial intelligence equips a computer with the ability to learn human language. This makes it easier for the AI to ‘converse’ and make sense of linguistic patterns.
- Machine learning: This type of AI allows computers to improve their performance by learning data and applying the information.
Both of these artificial intelligence types are perfectly suited to the commercial real estate sphere. This is because both enable data-tailored actions such as application reading and automated responses — thus freeing people from the tedious task.
Trend #3: Clean tech for energy efficiency
When you look at the data, it’s difficult to argue with the idea that the climate is changing — even if we don’t all know the end results yet. A smart business person knows that if they want their investments to continue to bring in revenue, beginning the transition to clean tech is a must.
Clean tech is energy-efficient and energy-saving technology that will eventually lower the carbon footprint of a building. The hope is that hospitals, office buildings, and even hotels will soon begin to see the importance of green energy and participate in sustainability efforts.
Some examples of clean technologies:
- Automated HVAC: Did you know that one of the biggest culprits of drained energy is the HVAC system? This is especially true for HVAC systems that power larger buildings such as apartments, hospitals, and warehouses. Automated HVAC systems help fix this issue by monitoring heating and cooling levels, then reducing energy outputs automatically.
- AI windows: Wall-to-wall windows can make all the difference in a building where you spend more than half your time. It can even reduce depression and burnout. However, windows can also pose an energy crisis for some buildings. But, AI windows can learn when to tint during peak afternoon hours (which decreases air conditioning needs). They can also lighten or darken automatically, reducing energy bills associated with electricity costs.
- Battery energy storage systems: BESS is short for battery energy storage systems. This technology is a great solution for renewable energy. Once perfected, BESS will offer the ability to harness solar or wind energy and store that energy for later. This could solve many power issues that may arise once a transition to renewable energy is complete.
Trend #4: Smart technology & security
Smart technology saturates many industries but has found its greatest home in commercial real estate. This is because it serves the real estate needs effortlessly and is quite popular with property managers, owners, investors, and tenants.
Types of smart tech you will find in commercial real estate:
- Smart locks: Security is a big deal for everyone, but you can’t sacrifice ease for security. With smart locks, it’s easy to find the best of both worlds. They serve as entry point security. But they also utilize smartphones as entry credentials for tenants to use in place of keys, key fobs, and PINs.
- Video intercoms: Video intercoms are often a great way to ease the visitor management process for building staff and also allow service providers to access a building without someone to let them in. Additionally, video intercoms help office staff, tenants, and guests easily enter a property. In short, video intercoms are an underrated form of access control that is well worth the investment.
- Biometric readers: A biometric reader is an access technology that relies on biometric credentials such as fingerprints, facial recognition, and voice commands to allow entry. These types of readers are difficult to manipulate with fake identification, making them the best option for spaces containing sensitive data.
Trend #5: Digital twins for internal monitoring
As far as real estate tech trends go, digital twins are some of the most interesting and multipurpose of all. With digital twin technology, it’s easy to view floor plans as well as monitor internal systems. In fact, there is a long list of uses for this specific tech.
Top uses for digital twins:
- Property tours: With this real estate technology, prospects can view a property’s floor plans using 3D digital twin images.
- Predictive maintenance: To make predictive maintenance possible, IoT sensors predict patterns that can lead to pre-diagnoses of potential issues.
- Optimize construction of new projects: Using this visual tool, teams can construct a 3D model of a building project. Here, they can even address potential accidents and safety solutions before breaking ground.
Trend #6: Internet of Things for data monitoring
The Internet of Things (or IoT for short) sounds like a complicated concept, even though it’s quite the opposite. IoT simply refers to taking a network of “things” containing software, sensors, and other mechanisms to exchange information with other devices. Put in even more simple terms: IoT is the process of devices recognizing one another.
Once connected to the cloud, these devices can generate useful data based on information gathered from their sources.
Viable IoT sources include:
- Smart appliances
- Air quality monitors
- Smoke detectors
- Doorbell cameras
- Smart locks
- IP intercoms systems
When connected to a shared network, these various systems share information and compile a file of useful data. However, collecting the information doesn’t do much good if you don’t have the right applications to read and process it. If you have the means, it’s more beneficial to contract a company specializing in IoT analytics.
But how does this translate to commercial real estate technology? Below are connections used for the Internet of Things data collection.
Data from IoT connections can monitor:
- HVAC efficiency
- Workplace flow
- Tenant experiences
- Infrastructure health
- Smart technology
Trend #7: Commercial real estate in the Metaverse
It will be a miracle if you’ve gone this long without hearing something about the Metaverse in real estate technology, whether it’s from an ad, internal marketing campaigns, or even the news. But how does the Metaverse fit into proptech?
There are several ways that the Metaverse can and does serve the commercial real estate sphere.
First, it creates a virtual space in which to plan and manage the pre-construction phases of new projects. Second, the Metaverse can serve as a virtual, 3D space to conduct tours and property sales. Third, it has the potential to serve as a 3D facet of marketing and customer service.
Trend #8: Mobile apps
If you have a smartphone, you know thousands of apps are in the app store. Some of these apps are useful, and some of them are wasted space on your device. Almost everyone has an app that they swear runs their life, which is exactly why mobile apps take over real estate.
Types of apps that can transform commercial real estate:
- Property listing: Property listing apps are exactly that. They help manage listings, serve as a third-party contact point for prospects, and help people boost commercial property visibility.
- Access control: Properties with access control systems installed will find that mobile apps help with many functions. These include insights into behaviors involving entering and exiting, remote access, and helping save money by making keys, fobs, and cards obsolete.
- Admin: Administrative duties such as paperwork, scheduling, and communications are all made easier with mobile apps. Keeping everything within one control center helps maintain organization.
- CRM platform: When you have customers and clients that rely on quick communication, a CRM (customer relationship management) platform is likely your best option. A CRM app will make it easier to manage and follow up with leads and maintain communication with current clients.
Trend #9: Blockchain for real estate
Blockchain is a decentralized fintech system that acts as a transactional record. Many industries use blockchain, including banks, government agencies, and healthcare institutions. Now, we’re going to talk about how commercial real estate companies can also benefit from this system.
Ways that blockchain assists commercial real estate companies:
- Enables smart contracts: Blockchain real estate technology helps create smart contracts written in code. Encrypted contracts such as these are duplicated across the network, decreasing the chance of errors or security breaches.
- Assists property investing: Blockchain is useful for real estate investors fond of cryptocurrency. Buyers can purchase a property using tokenization — which is a decentralized way of buying and selling.
- Encrypts property listings: There are dozens of property listing sites and apps on the internet, all of which have many of the same properties. This causes faulty information, competition, and even price inflation — all of which blockchain can solve. Blockchain acts as a database that encrypts the listings, making it more difficult for third-party sites to post the same property information.
Trend #10: Fractional investment apps
Fractional investment isn’t the newest in real estate technology when compared to other types of proptech. But it’s still one to keep an eye on. It’s also certain to turn some heads as it gains more and more traction.
Fractional investing makes it possible for people without the means for larger real estate investments to still get a piece of the pie. They get to invest with smaller, incremental payments, with the end goal being that real estate investment is more accessible to the masses.
For years, many have viewed the real estate market as inequitable, encouraging others to brainstorm ideas to make investing easier and more diverse. Now, apps and platforms are already dedicated to bridging the gap for fractional investors.
Should you invest in real estate proptech?
Property real estate technology is an ever-changing landscape. What’s hot now may not be in the following years. However, to be on the cutting edge of any profession, it takes risk and determination — as well as flexibility — to be a frontrunner.
The question of whether or not you should invest can easily be answered by looking at the data and weighing risks vs. rewards. It also takes business intuition to know a winning investment over a short-lived fad and reasoning skills.
Questions to ask yourself when considering investing in proptech:
- Will this improve people’s lives? People should always be taken into account before diving headfirst into a new system. Will proptech make their jobs and lives easier, or will it only cause confusion and decreased productivity? It might be worth hearing from subject matter experts before finalizing any contracts.
- Is this the best solution for your business? Take some time to ask yourself if this particular investment is the best solution or if there’s a different approach, product, or system that would better suit your needs.
- What are the financial implications or benefits? Will investing in new property tech hurt your finances more than the promise of overall increased NOI? Or is it actually as good as it sounds?
Maintaining a firm grasp on the ever-changing landscape of real estate technology is the best way to establish yourself as an industry leader. While some property tech may not suit your needs, being knowledgeable in up-and-coming trends will certainly make you an expert in your field.
Proptech has surged in the last several years, and it continues to make leaps and bounds in commercial real estate. As a result, it’s opened doors for even more advancements that will soon change the face of real estate investing forever.
To keep up with more tech subjects, we encourage you to read more about innovations that may positively impact your life and business. If you’re interested in AI tech and innovation, read this post about ethical artificial intelligence trends.