“At least 40% of all businesses will die in the next 10 years if they don’t figure out how to change their entire company to accommodate new technologies,” said John Chambers, the former CEO of Cisco Systems.
Every industry has to undergo digital transformation and the commercial real estate industry is no different. Commercial real estate digital transformation has been especially interesting to watch as new smart technologies continue to make CRE investing and development more efficient.
Though there are many trends we could highlight, this article will focus on the top futuristic trends for CRE that you need to know to stay relevant.
VR and AR-powered property viewing
What if we no longer need to view properties in person? You don’t need to imagine it; virtual reality (VR) and augmented reality (AR) are making this a reality right now.
With these technologies, you can take a 360-degree virtual tour of various CRE properties – going from room to room for as long as you want. All without ever visiting the house.
3D property modeling (powered by augmented reality) also makes it possible for you to create accurate 3D images of the interior and landscape of a property by just uploading its picture. All without having to visit the property.
You can now save the time and money you would have spent traveling to view a property.
Smart technology and IoT
Gone are the days when all that made a building smart was your ability to control its HVAC, lighting, alarms, and security systems onsite (when you are in the house) and offsite (when you are out of the house).
Today, smart buildings have connected devices and sensors (powered by the Internet of Things [IoT]) that can collect and analyze data and then adjust the functionality of any of a building’s systems to improve performance or save cost.
If your energy use is too high, smart technology can identify the cause and adjust your HVAC and lighting systems to reduce cost. It can also show you how to more efficiently use space to make the building more comfortable.
Smart technology and IoT will not only save you money, they will improve your security and comfort.
Data analytics and predictive modeling
Smart investors need to analyze lots of data to make investment decisions. But how much data can individual investors analyze on their own with just their Excel sheets before them?
Digital data analytics tools solve this problem.
They collect and analyze big data about the CRE market (location, occupancy, pricing, leasing, property, and land valuation, among others) and then make actionable insights available through heatmaps, infographics, gant charts, and datawrapper, etc.
Some of these tools also have predictive modeling capabilities. That is, they can use past data to predict (forecast) what the CRE market will look like in the future.
Both past data and future forecasts can help investors (and other stakeholders) to make better decisions.
Blockchain-powered CRE transactions
When many people hear about Bitcoin, the focus is on how someone somewhere has made millions of dollars investing in it. However, the blockchain technology behind Bitcoin is even more interesting and valuable.
Smart contracts, powered by blockchain technology, are revolutionizing how we carry out CRE deals.
They remove the need for intermediaries by automating real estate agreements – thus, saving time and money.
Smart contracts also promote transparency by recording transactions on public ledgers that everyone can view (but can’t edit). The ability to include conditions and make the contract enforceable when those conditions (automatically) have been met has also improved transparency.
Artificial intelligence
The buzz around Chat-GPT has brought AI into the mainstream. Many people now use it to create content, images, and videos, among others.
AI is also revolutionizing the CRE industry.
AI-powered chatbots on real estate websites can respond to inquiries and assist tenants and investors.
Property owners and maintenance officers also use AI to make property maintenance more efficient. AI algorithms can predict equipment failures, identify excessive energy use, and optimize maintenance schedules.
Similarly, innovative real estate finance companies are using AI to quickly approve funding for applicants without the tedious and time-consuming process of traditional banks.
For example, Duckfund, an earnest money deposit (EMD) financing company, uses AI to quickly evaluate the information of investors applying for EMD financing. The application process can be completed within 2 minutes (without submitting any credit report) and funds are made available to the escrow within 48 hours.
These 5 trends have begun changing and will continue to transform the CRE industry. By adapting to them, you can ensure your relevance and success in the bold future that awaits all CRE stakeholders.
