Several years ago, Commercial Real Estate (CRE) was in danger of falling behind in the adoption of new technology. But that has definitely changed. As reported by Forbes, investment in property tech (Proptech) grew by 1,072% between 2015 and 2019, and in 2018, venture capital firms invested $8.3 billion in Proptech companies throughout the world.
As a result of the pandemic, tech adoption is accelerating across myriad industries worldwide, including the CRE sector. Specifically, workplace productivity solutions, such as those that engage businesses remotely, have experienced significant growth. CREtech/Proptech investments also include virtual tour and safety on-site solutions for property management and leasing teams, and remote collaboration software for developers to stay on schedule and stay within budget.
Over the past several years, Proptech has contributed significantly to the modernization of the industry. This rapid adoption of Proptech is an indicator of a greater alignment between emerging technology and the industry’s digital transformation, according to Altus Group’s 2020 CRE Innovation Report.
Proptech continues to revolutionize the CRE industry in several ways; here are just a few:
Data collection, analytics are game changers
Thanks to technological innovations, it is now possible to not only collect large amounts of data, but, and arguably more importantly, also turn that data into actionable information.
In order to make the best decisions possible, end-users must have access to data analytics tools, which allow them to learn about current market trends and make more accurate forecasts. We can use big data to reveal trends, identify pain points and triangulate on specific goals more accurately.
By applying deep data analytics to CRE, we can make better investment choices and produce more accurate forecasts, leading to improved decision making across the entire CRE spectrum.
Blasting off: The ascension of drone technology
It is estimated that the drone market will soon reach $28.3 billion, and construction is one of the top industries for drone adoption, according to Insider Intelligence. In a number of significant ways, drones are revolutionizing commercial development.
Utilizing state-of-the-art cameras and mapping technology, the small flying machines can take detailed 2D and 3D photos of construction sites, take measurements, or provide context for a project within a community. The use of drones to view construction sites virtually took off during the pandemic and is now a business standard, offering impressions that often rival in-person visits.
Through 2028, the global construction drone market is expected to grow significantly. North America continues to maintain its dominance in the market, accounting for nearly 37% of the total value of the market, followed by Asia Pacific and Europe, according to Coherent Market Insights.
State-of-the-art project budgeting software goes beyond the detail
In the CRE industry, developers are very dependent on project budgeting software, and this has increased through the pandemic. The best solutions in this space grow in lockstep with tech, and should give the project perspective as much attention as the financial perspective. A state-of-the-art solution allows the software modules or functionality to be project aware, with each module providing the necessary project perspective to complement the general ledger perspective.
Nearly all job-costing software emphasizes the subcontractor or general contractor perspective where the detail level drives the reporting. But success in the developer market comes from its ability to go beyond the details and show management top-level project status and the various detail levels that support it. The software solution must address the complete life cycle of a real estate asset: from project inception to project completion, and from pre-development to property management, in order to minimize budget debt and maximize profit, efficiency and client satisfaction.