2017 – That’s a Wrap! What’s in Store for Real Estate Technology in 2018?
Our theme for 2017 was about the 5 Phases of CRE Technology. The thinking behind this was we wanted to: 1) pinpoint the exact time when the Commercial and Corporate Real Estate industry started seriously talking about technology; 2) determine the time periods when elevated interest in CRE Tech occurred; 3) analyze which solutions were most prevalent in each phase; and 4) evaluate lessons learned about industry adoption after each specific phase.
A secondary theme that developed once we saw just how much technology our industry was dealing with was the extraordinary challenge of keeping up with all the new ideas and solutions as well as the reality of integrating them into conservative real estate organizations, which often required trying to adjust long-standing business models. We learned that most companies have limited capacity to introduce new ideas while keeping the business running, productive and profitable.
The trends we saw in 2017 will carry us into 2018. They will accelerate, become more mainstream and continue to integrate into the daily routines of Commercial and Corporate Real Estate organizations. There are other changes and developments, that if successful, could threaten traditional business models.
The following are some of the trends we will continue to keep an eye on in 2018:
Fundamental Real Estate Business Models
- Retail, Office and Industrial Real Estate Models are in transition
- Continued evolution of the Digital Transformation of Commercial and Corporate Real Estate
- Space utilization becoming more science than art
- Integration of brick and mortar and digital business models
- Shared economy’s continued impact: UBER, Airbnb, WeWork
- Space-as-a-Service (Saas) expands across asset classes
- Proliferation of mobile technologies
- Liquid Leases (flexible and fluid) continue to be defined
- Augmented and virtual reality continue to impact design and leasing process
- Autonomous vehicles impact ingress, egress and the design and construction of parking facilities
- Drones and robots expand their role in real estate operations
- Real Estate Operations and Building Data converge
- Succession planning and transfer to Generation X and Millennials increases
- A slowed pace in the creation of new CRE Tech Companies
- Great number of consolidations and merger and acquisition activity
- Increased closures of struggling companies and business models
- Increased pressure on startups for market penetration or financial stability
- Industry still looking for dominant companies and notable exits
- An abundance of cash remains for the right opportunities, ideas and companies
- Pressure continues for systems to be more open and interoperable
- Process automation becomes more finite and granular
- More expansive automation reach (front occupant facing as well as back-office)
- Greater emphasis on the UX/UI
- Data science becomes more mainstream as its benefits increase
- Increased use of analytics and ultimately AI
- Legitimate blockchain and cryptocurrency applications begin to appear in the market
- FASB deadlines loom while industry preparedness remains questionable
- Continued moderate adoption of smart building technologies
- The focus on wellness increases
- IoT becomes more seamlessly integrated with traditional building automation
- Consumer IoT forces development and adoption of technology (virtual assistants)
- Cybersecurity and privacy issues increase
- Sensors find their way into every piece of building equipment
- Smart lighting continues the path to increased adoption
- Low voltage and Power-Over-Ethernet (POE) conversations increase
- Microgrid and off grid concepts continue to increase
Some would argue that it would be easier to start a commercial real estate company from scratch utilizing all the new technological capabilities than to change the operational models of existing organizations. However, for the majority of real estate companies, this is not an option. 2018 will be filled with great opportunities as well as challenges. The technology is not the most challenging issue, it is our capacity as humans and organizations to change, which remains at center stage. Finding efficient and effective ways to discover, prioritize, test and implement both tactical and transformative technology will be the secret to success in the Age of Acceleration.
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UPCOMING REALCOMM WEBINARS
How Enterprise Systems and Third-Party Integrations are Influencing Investment Management During the Extreme Makeover of CRE Tech 5.0 - 1/25/2018
Realcomm 2017 focused heavily on the Commercial Real Estate evolution from CRE Tech 1.0 to 5.0. Nothing could be more evident of this extreme makeover than the pace at which our enterprise giants are introducing new functions and feature sets in the Investment Management space. When combined with the introduction of innovative SaaS third-party tools that integrate seamlessly with existing deployed systems, the feature-rich environment is transforming the technology landscape for investment managers. From fundraising and capital management, to buy/sell analytics, to the entire investor experience, these capabilities are empowering companies in entirely new ways. Join our fast-paced discussion to hear about the very latest innovative aspects of this digital transformation.
Scott current serves as the Industry Principal for Investment Management Solutions at Yardi Systems. He has almost 30 years’ experience working in the real estate software technology field and has been engaged by hundreds of real estate companies in selecting and deploying software technology. He started in financial and real estate technology consulting with the public accounting firm of Laventhal and Horwath, and went on to manage a real estate technology consulting practice for numerous years. Since then, Scott has worked for a number real estate software companies in various roles from consulting to develop to National/Institutional Account Management. He currently works for Yardi Systems assisting their Private Equity Real Estate clients create efficiencies with software technology in their front to back office operations.