The Tech Effect


Carol Shumway

The tech effect is hitting the commercial real estate (CRE) industry—and hitting it hard. Over the past couple of years, demand and implementation of new technology has been at a fever pitch, reinventing how professionals interact with real estate. From how a lease deal is transacted to managing building systems, every tenant, investor, broker, owner/operator, vendor and employee is affected.

Technology is a key differentiator in CRE—it’s that competitive ‘it’ factor. According to VTS Blog, the three trends that are top of mind for asset managers around the world are:

  • The rising value of amenities
  • The importance of data-driven decision making (data)
  • The shift from a property-focused industry to a tenant-centric one (tenant experience)

These are directly related to technology and key considerations to keep in mind are adoption, accessibility and data accuracy. I also think it’s important to add mobility to that list. Looking ahead, I anticipate smart building technology to be the next big game changer.

Mobility
Mobile technology is a staple in the CRE space, speeding up processes, streamlining operations, reducing expenses and saving time. For example, brokers and asset managers use mobile technology to review and negotiate lease deal points quickly and effectively through leasing apps. Other examples are tenants touring office space via virtual reality software without having set foot onsite; or building engineers monitoring systems using the Internet of Things (IoT) sensors and weather data.

Data
The majority of CRE changes can be attributed to “it’s all about the data”. Real (or almost real time) data is more readily accessible and can be mined using predictive analytics.  Deal data can be “read” using machine learning, which can be used to populate key terms in a lease template. Benchmarking is also a key component of the CRE tech strategy and is used to measure and compare leasing stats, network/wired building performance and comparing financial measurements to industry metrics. 

Documents are also drafted more quickly through the use of artificial intelligence and data, significantly speeding up negotiations and contracts. Software tools like VTS leasing software allow brokers and owners to have access to detailed available space information, centralized portfolio data and simplified pipeline management.  Brokers thus spend less time on paperwork and more time on client relations and staying up to date on market trends.

Tenant experience
The tenant experience has expanded to include the employees of tenants. Today more than ever, employees influence where offices should be located and the type of space it should be. At the top of their list is connectivity and convenience in the areas of amenities, communications, network performance within the property and overall concierge service.  This includes digital portals that address the social component of the tenant experience as well as the opportunity to deliver access to tenant services and amenities such as scheduling a conference room, access to building services or booking a yoga class. 

The tech effect is a powerful force that is changing the way we do business. And most importantly, it doesn’t discriminate. Nearly every business, industry, job and function/process can benefit from technology. We’ve seen impressive advances in the CRE where a loaded technology toolkit is more critical than ever to keep a building relevant or risk being overlooked for a competing asset.

 

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Carol Shumway is KBS’ Vice President of Reporting and Compliance