Proptech is essentially all the tech tools CRE experts use to optimize the way people buy, sell, research, market, and manage a property. Valued at an estimated $1.6 trillion, the U.S. technology industry has the capacity to transform entire industry ecosystems, including CRE. The space is already drumming up its tech investments, with 50% of CRE teams planning to increase technology budgets in 2022. Here are some PropTech themes that are contributing to the ever-evolving CRE sector, especially office real estate.
Virtual and Digital Imaging
Many consider virtual and digital imaging (e.g., virtual property tours and 3D floorplans) a must-have, as this PropTech technology can apparently yield positive ROI faster than other solutions. This is because engagement with a prospective tenant starts much earlier in the decision-making process. It starts the moment they click on the property link.
Most platforms provide the opportunity to tour a space from various viewpoints, navigate surroundings, arrange furniture, research specs and amenities, and chat with a property representative. Best of all, virtual property tours and 3D floorplans offer tenants the gift of convenience and time, minimizing travel — and CO2 emissions — by not having to visit the location in person. For a CRE operator wanting to demonstrate a commitment to environmental, social and governance (ESG) policies, helping to cut down on carbon emissions is big plus.
For CRE operators, virtual tours enable them to reach a much broader audience of possible tenants. At the same time, important data can be gathered to help track user behavior on the site for marketing and platform improvement.
Of course, the emergence of virtual and digital imaging in CRE isn’t a sign that in-person tours are history. Even in a world that’s being overrun by virtual options, people ultimately have a need for tangible experiences.
Property intelligence data includes everything but the kitchen sink: demographic trends, property records and permits, building and tenant information, valuation, management reports, historical maintenances, and so much more.
CRE operators have incorporated touchless technologies for tenant health and safety purposes (i.e., sensored-faucets, keyless entry), as well as utility automation to reduce building energy costs (i.e., motion detecting lighting and heating).
This smart technology is also used in monitoring systems and can identify maintenance needs before a serious issue arises. Congruently, the same technology can monitor foot traffic and tenant behavior, which can be very insightful when identifying new revenue opportunities. Looking ahead, there’s no reason to believe that smart technologies won’t continue to evolve to give CRE operators even greater property control than ever before.
Apps for Tenant Convenience and Engagement
With the needs of tenants changing so rapidly, remote applications such as tenant and landlord smartphone apps are a welcomed enhancement to the office experience. These apps offer customer-centric convenience while creating a competitive advantage within the CRE industry.
“This multi-tasking technology decreases stress and increases workflow,” said Marc DeLuca, CEO and Eastern Regional President of KBS, in Forbes. “Instead of having to get your car washed and detailed after a long workday, you can now order a car wash to detail it for you on-site during the day. If you’re having a larger, team conference and need to order lunch, it can all be done through the app. Streamlining small processes like these adds up to increased satisfaction.”
Simpli is just one such app that’s been in use at various KBS East Coast locations, including 3001/3003 Washington, One Washingtonian, Reston Square, Dulles Station East, and Redwood Plaza. The Simpli app provides its users with greater overall connectivity to their workplace community.
“We’ve also incorporated the HqO app at Accenture Tower and RBC Plaza,” said DeLuca, “where the app blends concierge services, experience management, and technology. The result is not only increased ease, but also greater trust and stronger partner relationships.”
There’s still so much to learn about blockchain technology. It is still early in the adoption phase, but general sentiment is that blockchain has the potential to revolutionize CRE.
In simple terms, blockchain is a type of shared database used in transactions. It records digital transactions as a “block” of data. A new block is created each time a new transaction occurs, which is then added to the previous block. This creates a chain of blocks, or blockchain. Smart contracts are especially of interest to CRE, because blockchain can streamline transactional processes that are spread across multiple platforms and involve several intermediaries. These contracts are directly shared and maintained by users, are highly transparent, almost real-time, easily trackable, and exceptionally secure — reducing the risk of fraud and other transactional errors.
Coworking is not a new concept. Before the pandemic, it was primarily driven by smaller businesses or entrepreneurs needing a slice of an office. Today, the concept is fueled in part by the hybrid movement.
Coworking is anticipated to increase — or at least return to where it was prior to the pandemic. CBRE recently added $100 million to its previous $230 investment in workspace provider, Industrious, which specializes in strategically developing custom workplaces.
“We see a huge opportunity in flex space,” said CBRE’s Chief Financial and Investment Officer Emma Giamartino in a report from the Commercial Observer. “We knew that to take it to the next level we needed an external partner.”
At KBS’ Accenture Tower in Chicago, Industrius offers over 93,000 square-feet of space, featuring shared workplaces, private offices for teams of various sizes, and its signature enterprise offering, Canvas suites. Building occupants utilizing these workspaces can not only take care of business, but also enjoy Accenture’s many on-site offerings, including state-of-the-art food and fitness amenities.
The coming months could also see a continued increase in work-from-home employees growing tired of their home office. Like many, these individuals are seeking solace in a professional, coworking space. As such, the business world is likely to see increased demand for innovative, shared CRE technology and platforms that offer optimum connectivity and smart solutions. These are the type of results that could continue to transform evolving work models into seamless processes for the employer, employee, and the building operator.
Some may say that we’re in the wake of a technology revolution. And what an exciting revolution it is. CRE players are presented with an incredible opportunity to seek out innovative PropTech solutions to turn today’s challenges into tomorrow’s successes.
To learn more about commercial real estate and trends in retail, visit KBS.com/Insights.