So, what do Billy Beane and a now classic baseball movie have to do with commercial real estate? Not a lot really, but that one phrase “adapt or die” holds an interesting truth for our industry which historically has been a bit sluggish in its adoption of new ideas, particularly technology. After all, this is a business built on face-to-face meetings and physical structures, technology can’t replace those things. But, as evidenced by some new trends, upstart companies and the next generation of brokers, managers and investors, the importance of technology is getting a lot more real for commercial real estate.
Just this month, cre.tech, a news outlet dedicated exclusively to commercial real estate technology, announced the launch of a groundbreaking series of educational events for commercial real estate professionals. The monthly events will be built around the theme of technology as it relates to facilities management, property management, commercial brokerage and more. The company claims the impetus for the event series was commercial real estate professionals themselves, who are looking to be educated on new tools and opportunities to boost productivity and efficiency. The news outlet is not the only entity to take up the high-tech flag. Commercial real estate’s influential professional organization CCIM, for example, now offers courses in high tech marketing and other disciplines for industry professionals.
While becoming educated on high tech solutions will hold significant value for those eager to get up to speed on the latest the industry has to offer, there’s a whole slew of new companies that are already working on bringing commercial real estate into 2017. These companies represent the next evolution for each of the industry’s players – tenants, investors, brokers and landlords.
42Floors, for instance, is a company made up of experienced entrepreneurs, engineers, and real estate professionals. All with a proclaimed passion for making the commercial real estate search process easier for everyone. By aggregating metadata from multiple sites, tenants are able to find available spaces, complete with high quality photography and other data needed to make a decision.
For investors, Cadre, a technology-enabled investment platform, connects qualified individuals and institutions to fully vetted, compelling real estate investment opportunities. Interestingly, the company still acknowledges the low-tech beginnings of the industry it serves and relies heavily on its extensive network of industry relationships, as well as its reputation as a preferred capital partner, to continually pursue a steady flow of differentiated opportunities.
Compstak, will be a boon to brokers, appraisers and researchers. The company has created a searchable database of thousands of lease comps from verified professionals — information known to be particularly allusive in the real estate world. Right now, the company’s database covers 5.9B square ft. of space, and offers its users a free way to swap and search for property information that otherwise may have been unavailable.
As workforces change and emerging technologies become more mainstream, there is sure to be other changes as well in the commercial real estate industry. Already, builders and landlords are being faced with the reality of not only having to use technology to market their properties, but also with tailoring space to the audio-visual, connectivity and security demands of millennial workers. According to commercial real estate services firm, JLL, those costs can represent as much as 25% of the total build-out cost.
While our industry will certainly have to go through some changes and some adaptation, technology will never be a substitute for human interaction and good professional practice. For at least the next decade, according to James Manyika of the McKinsey Global Institute despite the great moves in business toward technology and automation, “Only a small proportion of all occupations, about 5%, can be automated entirely…” For now, it’s probably best to keep our traditional skills sharp and look for opportunities where technology can keep us closer to clients, enable us to reach more prospects and present our offerings in the easiest and best way possible.