Like many industries several years ago, Commercial Real Estate (CRE) was in danger of falling behind in new technology implementation. But that is definitely no longer the case. From 2015 to 2019, property tech (Proptech) investment in the CRE space grew by 1072%, and in 2018, venture capital firms invested $8.3 billion in Proptech companies around the world, as reported by Forbes.
The pandemic has served to further accelerate tech adoption across myriad businesses worldwide, including CRE. Growth has been most evident in workplace productivity tools, especially solutions focused on engaging businesses remotely. Other CREtech/Proptech investments include virtual tour and safety on-site solutions for property/leasing teams and construction teams, and remote collaboration software for real estate developers to keep projects running on time and on budget.
Indeed, for the past several years, the acceleration of Proptech has been a major driving force for the modernization of the industry. According to Altus Group’s 2020 CRE Innovation Report, the rapidly increasing level of Proptech adoption is an indicator that a more complete alignment between emerging technology and the digital transformation in the industry is now occurring.
Here are three areas where tech innovation has helped drive productivity in the CRE space:
Construction is one of the top growth industries for drone adoption, according to Insider Intelligence, and it is predicted to become a $28.3 billion market. Drones are revolutionizing commercial development in a number of significant ways.
The little flying machines are capable of providing detailed 2D and 3D images of construction sites by utilizing state-of-the-art cameras and mapping technology to create aerial maps, take measurements and give context to a project within the community. Using drones to virtually visit construction sites took off during the pandemic, and has now become a business standard, offering impressions often exceeding those of in-person visits.
The global construction drone market is predicted to witness significant growth through 2028. North America is expected to maintain the dominant position it now holds in the market, accounting for approximately 37% share in terms of value, followed by Asia Pacific and Europe, according to Coherent Market Insights.
Tech innovation has made it possible to not only collect large amounts of data, but also to render that information actionable. In order to make the best decisions possible, customers should have access to data analytics, which provides them with an understanding of current market trends and allows them to be able to make more accurate forecasts. Big data can reveal trends within audiences, determine pain points and more accurately triangulate on specific goals.
Deep data analytics forwards valuable insights for smarter investment decisions and more sophisticated forecasts, leading to better decision making across the entire CRE continuum.
Project budgeting software
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.
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