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Four Technologies Transforming Commercial Real Estate
For years, the commercial real estate market experienced little change. By and large, processes and technologies remained stagnant. However, in recent years, the industry has experienced widespread growth and change. In particular, the industry has embraced new technologies that have helped to reshape the status quo. Investment in the “proptech” sector climbed to approximately $20B in 2018, representing a 38% increase over 2017 levels. No doubt, the future of commercial real estate will be shaped by transformative and cutting-edge technologies. Here are four technologies that are poised to disrupt the commercial real estate market in 2019 and beyond.
Virtual reality (VR) and augmented reality (AR) are making big waves in the commercial real estate sector. Research by Deloitte has revealed that almost half of commercial real estate investors say that VR and AR should be priorities for commercial real estate companies.
VR and AR technology can move waters throughout the construction process to test different design prototypes. It can significantly decrease the time involved during the development process by enabling clients to visualize a property before construction has started. VR and AR can also allow buyers and tenants to immerse themselves in a space without traveling to the physical location. By incorporating personalized designs and layouts, the technology can create a more tailored experience.
The commercial real estate market is no stranger to fraud. Amidst complex contracts and transactions involving money changing many hands, it can be difficult to know where money is.
Blockchain—essentially an immutable ledger—offers enormous potential to streamline commercial real estate transactions and increase transparency. It can enable a more reliable means of verifying transactions, property documents, and property ownership, thereby helping to prevent fraud.
Already, the lure of blockchain is garnering tremendous interest amount commercial real estate professionals. Steve Weikal, Head of Industry Relations at the MIT Center for Real Estate, explains the potential, “Just imagine how important it is in real estate to know where the money is, where it came from, who really controls it, who owns it, where is it stored, and when it gets passed off.”
Sensors are destined to have a major influence on the commercial real estate market. According to Deloitte, the deployment of sensors is projected to grow at an impressive compound annual growth rate of approximately 79% between 2015 and 2020 to nearly $1.3 billion.
Sensors have several advantages in the context of real estate. They can, for example, have a major influence on energy expenditure. Today, commercial buildings waste approximately 30% of the energy they use. Smart sensors can monitor energy use and make changes such as adjusting lighting and air-conditioning settings to reduce energy costs. Additionally, sensors can proactively detect issues such as mechanical failures and transmit warning signs.
Commercial real estate professionals are sitting on mounds of data. For decades, commercial real estate professionals have struggled to turn the large amounts of data at their fingertips into usable information.
Fortunately, with advancements in artificial intelligence, commercial real estate professionals can finally take advantage of all the data that has been collected over the years. AI can seamlessly process and synthesize data so that it can guide decision making. Forward-thinking firms are adopting AI technology to gain new insights into their business and industry. Affinity is able to instantly organize a firm's collective network and derive game-changing insights into how to win the next big deal.
Technology is shaping the future of the commercial real estate industry. From buying to selling to managing properties, technology is redefining the status quo. Commercial real estate companies that embrace new technologies will inevitably gain a competitive advantage.