There's no doubt about it – the real estate industry is changing, and thanks to advanced technology we'll probably see a lot of new innovations piling up in the next 5 years or so.
In the last 30 years, we’ve seen how commercial real estate slowly changes. The industry has transformed into an institutional asset class with global portfolios belonging to top-tier company owners and venture capitalists. A few decades ago institutional investors didn’t believe that investing in real estate was profitable enough. However, an increase in global commercial real estate and new investment structures has made them change their minds. At this point, real estate has 10% of institutional investing portfolios, with profit range of $6.7 trillion. And yet, we haven’t seen much evolution in trading strategies.
A lot of people have already embraced technology. Some are quite familiar with mobility, cloud computing, and big data. CRE (commercial real estate) on the other hand, is still using 20-year old technology and old-fashioned platforms to store information. The good news is, everything’s changing; slowly but steady. Older systems are crashing and new CRE tech enterprises are starting to make people understand that there is a lot of benefit in tech-oriented real estate. In 2015, about $90 million were put into technology-oriented commercial real estate companies. Regarding upcoming changes realtors, buyers and sellers should know about, we should mention the following:
1. Increased competition
A brand new level of rivalry and competition is altering the way people recruit, fundraise and invest in CRE. A huge capital influx caused by volatility and low interest rate has triggered an increase in demand. Prices for CRE properties are reaching historical levels, thus making competition become fiercer than ever. There is a lot of buzz happening in fundraising as well. Investors are only looking for firms that render the best yields, not to mention that limited partners are focusing more on visibility and more advanced tools. We’re currently witnessing a talent war, and as commercial real estate keeps growing in complexity the new generation of real estate leaders will be compelled to develop a new set of skills in order to attain success and compete in the modern work environment.
2. Increased demand for access to real time data
Analytics and data are currently going through a budge in expectations. Even though commercial real estate has always been driven by hard data, it’s somehow unattainable to assess and aggregate that information at a scale from spreadsheet and ERP systems. Crafting detailed portfolio insight demands teams of skilled analysts and hours of gathered data aggregation. Brokerages and commercial owners must find a way to harness market data and real time portfolio to succeed. The best way they can get leverage is performing more efficient operations, reducing portfolio risk and making better decisions.
3. Increased mobility
Commercial real estate is an industry ruled by mobile. Leasing agents are used to spending over half of their time doing work out in the field. However, some of them don’t have mobile support pre-installed for their business. Industry experts are starting to ask themselves why CRE doesn’t have dedicated mobile technology, particularly since additional industries are enjoying tech support for many years now. To see mobile tools aimed at brokers, buyers and owners, one must have a closer look at the residential real estate sector. Why is CRE still deprived of advanced technology, and when we will see more than enterprises active in this domain? Fortunately, in the past two years we’ve seen some notable changes happening. A wave of apps targeting commercial real estate has emerged, thus enabling CRE professionals to run their business remotely.
4. Tech consumerization
As advanced technology is becoming an important part of our daily existence, it’s safe to assume that apps can make our lives easier. Whether crafted for a business or a consumer, there is no doubt that difficult software that takes months to implement will vanish. Software that is sensible is no longer an exception, but a necessity. Current commercial real estate software platforms were created over 20 years ago, and that’s pretty obvious. They just can’t live up to the expectations of the consumer; CRE needs to understand that new technological tools are better, and that they can deliver simplicity and elegant user experiences.
There’s no doubt about it – the real estate industry is changing, and thanks to advanced technology we’ll probably see a lot of new innovations piling up in the next 5 years or so.
Author Bio: William Taylor is the writer of this article. He is a regular contributor at many sites and mainly focuses on business related topics. He also writes for a site http://www.propertyturkey.com/ offering property for sale in Turkey.