With ever-accelerating technological advances, businesses across all sectors cannot afford to become complacent. We only must think of companies who have failed to innovate and have been left behind as rapid digitalization overtook their dated business models, with examples like Blockbuster and Kodak easily coming to mind.
Real estate is not immune to technological advances and those that adopt new technology quickly enough often end up being the biggest beneficiaries. Traditionally, real estate businesses tend to fall behind when it comes to adopting new trends; however in recent years with the introduction of property technology (PropTech), more companies in this sector are exploring what technology could do for them.
From Analog to Digital
PropTech funding between 2014-2019 has grown by 766%, and it is expected to continue.
The real estate sector is typically regarded as conservative when it comes to technology, but with a plethora of innovative technologies in recent years such as artificial intelligence, it has become hard to not take advantage of the opportunities being presented.
Big Data
90% of all the data we now have in the world was created in the last few years.
With so much accessible information, businesses can easily gain valuable insights into their potential customers. A real estate business might be able to quickly pick up data on buying/selling trends or demographics in a local area to determine the value of their properties.
Data Management
45% of commercial real estate companies are spending 15% to 25% of their time organizing and managing data.
With so many assets, keeping on top of data management for a commercial real estate company (CRE) is proving to be difficult. 60% of executives say their firms still use spreadsheets instead of software as their primary tool for reporting.
Digitalization in Commercial Real Estate
There is a combined estimated worth of $50 trillion between residential and commercial real estate, according to the Federal Reserve. As a result, it is clear to see why technology companies are eager to embrace the benefits of recent technological advancements. However, commercial real estate hasn’t seen the same level of adoption.
The supply and creation of new digital tools to manage large property portfolios are coming of age — with viable PropTech solutions on the market that integrate with and enhance their current ways of working. If CRE companies are not already looking to digitalize, now is the time.
Maximizing Property Value
When it comes to maximizing the value of a property, those in CRE consider many factors. However, what is often overlooked is inaccurate property measurements due to human error or underestimating how much the floorplan of a property has changed over time. In fact, $100 billion are lost globally due to undervalued property. Embracing technological solutions like SLAM laser scanning can give CRE companies rapid, repeatable and highly accurate measurements and floorplans of their properties. Moreover, without needing to outsource or rely on dated information.
Digital Record Keeping
There is a great deal of paperwork involved in CRE management, and not having a digital record is not only inefficient but can also be costly. Having all the documents in an easy-to-access digital library can be helpful when needing to access paperwork quickly. Having a centrally stored digital record of your portfolio is important for real estate projects, such as selling your property or dealing with an audit. This is because having access to digital records helps minimize workloads and maintain good standards of information keeping.
Repeatable, Repeatable, Repeatable
“Too many companies are prepared to put up with poor-quality data when it is entirely in their power to improve it” —RICs
With technological solutions now available for repeatedly capturing and keeping data up to date quickly and easily, CRE companies no longer need to rely on old data, ultimately saving them money.
5 Ways Technology Has Affected the Real Estate Sector
Early adopters of new technology often pave the way for others to follow in their footsteps; however, those that end up following often play catch up.
- Building Information Modeling (BIM)
- Property Estimates
- Virtual Tours
- Digital Marketing
- Internet of Things (IoT)
The introduction of 3D digital models has been revolutionary for many sectors, including real estate. This digitized advancement means better planning and execution of real estate projects.
Technology makes processing and storing complex data incredibly easy, making estimations of property value more accurate.
Virtual tours of properties have significantly reduced the distances between buyers and sellers. Someone in the USA could now purchase a property in the UK without having physically set foot in the building.
With the advancements of digital technology comes the shift to online marketing. Traditionally selling real estate was the sole task of real estate agents; however, 47% of companies in 2018 acknowledged that their highest quality of marketing leads came from social media.
As technology is intertwined into our everyday life now more than ever, it should not be a shock that people buying property want their homes/buildings interconnected. Real estate buyers are aware of this and have begun investing and developing technologically optimized buildings for the buyers of tomorrow.
Digital Technologies Are Being Embraced in Real Estate
A growing number of property and real estate professionals are now embracing technological innovations and changing the way the sector is viewed. With the advancements in property technology, the companies that are early adopters will see the benefits for their workflows and productivity.