Technology Driving CRE April 13, 2018 Ken Robertson Have you ever forgotten your mobile phone at home? You proceed the entire day with a sense that something is missing. I’ve heard some people compare it to missing a limb. That’s a pretty powerful statement of dependence. But the truth is, technology makes our lives more manageable, more productive—and just easier. The same applies to business. Increasingly, the CRE industry is incorporating new technology and data analytics into their practice. Read on: New advancements in the collection of data has helped CRE cross into a new frontier. Think everything from leveraging data to improve building efficiencies and streamline maintenance programs, to enhancing the overall tenant experience. But according to REoptimizer, one of the biggest game changers could be combining Artificial Intelligence (AI), Internet of Things (IoT) and Big Data. By merging the three, CRE would achieve a powerful level of automation. REoptimzer provides an excellent example: “IoT can show a compressor’s energy usage. Big Data can pinpoint that the energy usage is higher than usual and that this trend usually correlates with a failing unit. AI can automatically dispatch a technician and have the right parts for a repair ordered and on site before he or she gets there.” I personally find this level of automation very exciting in the fact that human intervention is not a factor until the actual repair. “Time is money”—an adage that is more relevant today with the introduction of 3D modeling/virtual reality property marketing. While not new to the CRE space, its impact is becoming more apparent. This technology offers a virtual tour of a building from any location in the world—saving time and money by speeding up the touring process, omitting multiple property stops and requiring fewer people to be part of site visits. Virtual reality marketing also exposes a property to a larger audience, including foreign investors looking for acquisition or leasing/expansion opportunities. Drones serve many functions. In CRE this technology is being used to capture geospatial information for new site developments or as virtual maintenance assessors. Drones can travel to areas of a building that are difficult to access and inspect if repairs are needed. Interesting fact:Quantum Spatial, the largest full-service geospatial solutions provider in North America is a tenant within KBS’ Commonwealth building in Portland, OR. The company captured 294 million acres of imagery in 2017 via drones and other aircrafts. Blockchain is another buzzword we’ve been hearing a lot about recently, and some CRE execs are leveraging this technology in “smart contracts”, which Deloitte defines as “self-executing code on a blockchain that automatically implements the terms of an agreement between parties”. This means that property transactions can be seamlessly negotiated, verified and enforced digitally without third parties. It is nearly impossible to avoid the tech hype. Yes, some of the advances should be taken with a pinch of salt, but many—like the ones discussed above—represent dynamic opportunities for change in the way we lease, use and manage CRE space. Ken Robertson oversees a team responsible for all acquisition, disposition, and asset management activities for his region on behalf of KBS REIT, pension fund and sovereign wealth fund clients. His portfolio consists of 32 assets containing 12M SF.