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Technology is impacting every part of our economy, but one area where excitement for change is building is in the real estate industry. More than 1,000 people recently packed into a Manhattan venue for the CREtech New York Venture Conference with a focus on bringing to life innovation in one of our most important sectors, commercial real estate.
The growth in this area in recent years has been phenomenal. Investment in tech start-ups in the commercial real estate space in the U.S. has grown to an estimated $7 billion today, up from $30 million in 2012, CREtech estimates. And this commercial real estate ecosystem now has 3,000 to 4,000 tech start-ups.
It’s clear that all facets of the real estate industry will be dramatically different in a few years because of this activity. The big questions are: Which technologies will take hold? And where will we see the most activity?
On that first question, industry experts at the CREtech conference quickly came to a consensus. Technology that takes hold has to be focused on solving a specific problem. It has to deliver value, either making a process more efficient or reducing friction, while being intuitive and user friendly. The solution can’t add more work to the end user – whether that’s a builder, landlord, broker or tenant.
The answer to that second question – what will take off – is tougher to pin down. The reality is almost every aspect of the industry will be affected, but here are some areas to watch:
- Affordability: Whether applied to financing or construction, technology that reduces costs and puts real estate within reach of more people will always find a home. New online platforms already are helping streamline the buying, selling and leasing process creating efficiencies that are realized by the buyer.
- Security: Protecting assets from physical and cyber-threats will be another hot area. Buildings can be monitored remotely, and AI can be used to augment human surveillance.
- Building Operations: Every device – locks, lights, HVAC and more – will be connected wirelessly in the building. This flow of data opens opportunities to reduce operating costs.
- Data Management: Mining and analyzing data to make better decisions is another huge area. One emerging application is project planning – analyzing city zoning and neighborhood trends to determine if a project is possible and worth doing.
- Generational Shifts: With more baby boomers retiring, technology has the opportunity to transform buildings to make them more accommodating to older demographics. On the other end of the spectrum, the next generation entering the workforce has radically different views of technology. They expect every aspect of their lives to be controlled from their smartphones and will demand seamless connections to their buildings.
Regardless of which specific tech solutions take off, it is clear all aspects are on the table and any clear advantage from friction is being challenged.
And for business owners, you should be looking at how technology can provide a better space for your employees and customers. If you’re not getting the value of new technologies in your buildings, you could be missing out how to stay competitive or worse – relevant…
