Long an industry that lagged behind others in new technology adoption, commercial real estate (CRE) development has been coerced into digital fast-forward over the past couple of years. In fact, the Covid-19 pandemic destroyed any remaining trepidation the industry might have had, and forced the rapid launch and expansion of cutting-edge technology solutions into the CRE space.
This was both logical and necessary in order to continue business throughout the lockdown. Digital solutions proved to be most effective at working remotely, while improving both efficiency and return on investment of CRE development selection and projects.
Tech has shown itself to be adept at helping to improve historical problems that have long plagued the CRE industry. Rapid adoption of tech over the past two years is ushering in improvements in communications, data analytics, robotics/drones and virtual/augmented reality.
Tech unleashes real-time communications, improved modeling
The overwhelming majority of CRE projects are coming in late and over cost estimates, and this has been exacerbated by the pandemic, experts say. A reliance on outdated, inefficient technologies and paper documentation means that information can easily become fragmented as it is passed between owners, project managers, contractors and others.
There are many moving parts and stakeholders in a CRE project, and they all need to be able work together as a unit effectively. The best way to combat this unfortunate trend is by moving away from legacy systems to state-of-the-art CRE project management, budgeting and accounting solutions.
Modern project management solutions provide all teams – no matter how disparate – with a common set of data points from which to operate, and the ability to update all aspects of a project in real time. Traditional processes involve a host of challenges, including decentralized data collection and reliance on separate applications to share progress visuals, which creates communication gaps, misinformation, and version control problems.
There is also a lack of real-time reporting of site data to project managers, causing a significant delay in communication with site teams. It is clear that the resolution to these challenges is critical to the success of projects in the future.
And as data gathering and analytics continues to improve, building information modeling (BIM) is set to explode. BIM is a process supported by various tools, technologies and contracts involving the generation and management of digital representations of physical and functional characteristics of places.
This technology allows for several design iterations to be tested against each other, and key design conflicts can be identified and resolved during the planning stages. This saves money and reduces the need for any reworking after the fact.
Budgeting software allows for a top-down view
In the CRE industry, developers are very dependent on project budgeting software. The best solutions in this space should give the project perspective as much attention as the financial perspective. Independent perspectives are the key to addressing needs and reducing technical debt.
In this way, the project perspective permeates the software design, and the developer gets to see the project from the top-down. Since most developers hire a general contractor and subcontractors to implement projects, top-down financial control is more critical than bottom-up details.
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.
Advances in drone technology improve renderings, safety
Construction is one of the top growth industries for drone adoption, according to Insider Intelligence. And drones are revolutionizing commercial development in a number of significant ways.
These 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. 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.
In addition to automating routine inspection tasks, drones are capable of capturing data more precisely than humans, and their abilities to traverse rough terrain and adapt to changing weather make them capable of safely surveying difficult or hazardous areas.
Through the introduction and rapid adoption of these technologies, we will see a massively transformed CRE industry, one that is not only more efficient and cost-effective, but one that is more data-driven and collaborative.