The digital revolution has arrived in the world of commercial real estate (CRE) and continues to evolve in new and exciting ways. Though this fast-changing movement, with its barrage of acronyms and buzzwords, can seem overwhelming at times, owners, investors, and developers who are open to adopting high-tech innovations will find excellent opportunities for growth in their portfolios and businesses.
To help you keep up with this whirlwind of new technologies, here are the top ten digital trends now sweeping across the CRE industry.
1. Digital Tenant Experience and Personalization
Many owners and operators of multifamily investments and hospitality properties have come to recognize the importance of making digital tenant experience a core competency of their business. From branded mobile apps that let apartment residents initiate facilities requests to digital concierge services powered by artificial intelligence, today’s tenants and guests welcome technology-enabled convenience at their fingertips.
In addition to such amenities, tenants expect to have personalized, relevant interactions with a residential property or hotel brand, through state-of-the-art services that anticipate their needs and guide them to new recommendations based on their interests and preferences.
2. Data Science and Analytics
How do brand owners achieve digital personalization? By harnessing the power of big data and predictive analytics to make smart, data-driven decisions about everything from the location of a new investment property to how to run a marketing campaign targeted at millennial renters. A data scientist can help turn your raw information into actionable insights through advanced techniques such as artificial intelligence (AI), natural language processing, and machine learning.
3. Social Media
On the subject of ads and marketing, asset managers can help keep their properties on the map by cultivating an active, relevant, and compelling presence on major social media platforms like Facebook, Twitter, Instagram, Pinterest, and YouTube. Prospective shoppers and tenants from the millennial and Gen Z demographics are widely seen as digital natives who make consumer choices based on social opinions and value personalized experiences across an array of online platforms.
4. Smart Buildings
Smart buildings are certainly intelligent in the ways that they use information technology to monitor and regulate their data-collecting subsystems, such as heating, cooling, and electrical components. The energy efficiencies of these hyper-connected structures improve the comfort and well-being of their occupants, reduce operational costs for their owners and investors, and help the environment by meeting green initiatives . Smart buildings can also fetch higher rents from corporate tenants who place a premium value on sustainability and access to high-tech services embedded within their environs.
And in retail investments, where digital and physical shopping experiences increasingly cross over and merge, technology-infused properties can help streamline consumers’ transitions from online browsing and purchasing to brick-and-mortar activities like pop-up events and merchandise pick-up.
5. The Internet of Things
With its army of sensor-equipped, data-connected devices reporting up to the cloud, the Internet of Things (IoT) is responsible for making smart buildings smart and ushering in a brave new world of futuristic innovations with the potential to delight and engage building occupants. From cloud-connected hotel room doors that can be locked and unlocked with a mobile phone to smart shelves in a retail property that track the shopping habits of consumers, IoT devices are everywhere you look in the CRE sector and will continue to proliferate with the growing availability of cellular 5G and Wi-Fi 6 networks.
6. Facial Recognition
Powered by a branch of AI known as computer vision, facial recognition technology promises to speed and automate identity-based transactions such as check-ins and rewards reimbursement in hotel investments, payment authorization, and security and access to a property. However, experts and consumer advocates caution that the merits of this powerful technology must be weighed alongside ethical concerns around governmental lack of regulation, unconscious bias, and consumer consent and privacy.
7. Augmented Reality and Virtual Reality
Augmented reality (AR) is a technique that enhances the experience of reality by adding digital components to a live view, often through the camera feature of a mobile phone. Virtual reality (VR) is an even more immersive technology that seeks to create the sensory experience of an alternative world.
These technologies can enable CRE buyers to access listing data by scanning properties into a smartphone app and real estate agents to offer virtual property tours based on 3D building models, to offer just a few examples.
All of the trends discussed thus far can be considered forms of PropTech (short for “property technology”), although this term can also refer more specifically to startup companies and digital products founded with the dedicated needs of real estate in mind. PropTech continues to transform the ways in which property managers, owners, sponsors, brokers, and developers conduct the business of investing in real estate, whether it entails using blockchain to secure contractual and financial transactions or a 3D building information model (BIM) to store critical data over the lifecycle of a CRE asset.
Like its cousin PropTech, ConTech promises to bring increased productivity and cost savings to the real estate field, with a specific emphasis on the area of new building construction. A few examples of ConTech in action include:
- Using big data analytics with machine learning to forecast project costs for more accurate bidding and budgeting
- Leveraging the data from wearable IoT devices to identify the causes of accidents in the past and improve worker safety in the future
- Monitoring the geolocation, fuel usage, and maintenance schedule of sensor-equipped, data-connected jobsite equipment such as bulldozers and cranes
10. Cybersecurity and Data Privacy
Last but not least, delivering value in a hyper-connected world also comes with a new set of digital responsibilities. CRE brand owners should implement cybersecurity best practices to safeguard not only their own contractual and investment ledgers but the sensitive private data of their building occupants as well.
About Black Collie Capital
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