Altus Group Report Reveals Industry Disconnect on Impact of Game Changing Technologies in CRE
No one would dispute that technology is changing at a pace never before seen. With five generations of CRE Tech at play, real estate organizations continue to be challenged with identifying, evaluating, testing and implementing new ideas. Realcomm is constantly trying to assess how the industry is doing in respect to the speed of adoption vs. the speed and capabilities of emerging technologies. At our General Session in 2017, we used the analogy that "Corporate Real Estate is traveling at 25 mph, Commercial at 50 mph and that today's technology is capable of moving us at 100 mph while tomorrow's technology will allow us to move at 200 mph." The biggest question is, "how will Commercial and Corporate Real Estate reconcile the difference in speed?"
The recent study/report by Altus Group takes a comprehensive look at our industry's adoption rate of technology and emerging new innovative ideas. We would like to applaud the Altus Group for their efforts on this study and their overall thought leadership in our industry.
Altus Group, a leading provider of independent advisory services, software and data solutions to the global commercial real estate (“CRE”) industry, recently released the latest annual Altus Group CRE Innovation Report revealing that CRE industry leaders are divided about the potential of new technologies to drive industry-wide change.
According to the report, which is based on a global survey of 400 CRE executives at firms with assets under management of at least US $250 million representing a total of over US $2 trillion, a large majority of executives report their firms have benefitted from technology investments made over the past two years. However, when presented with six rapidly emerging disruptive technologies, only a minority of respondents recognized them as having the potential for major disruptive impact:
- Smart Building Technology – 35%
- Artificial or Machine Intelligence – 28%
- Big Data and Predictive Analytics – 24%
- Augmented and Virtual Reality (AR/VR) – 18%
- Blockchain Technology – 15%
- Driverless Vehicles – 9%
“CRE firms are facing the challenge of finding a balance between operational benefits delivered by existing technology and the potential disruptive impact to business models by what’s coming next,” said Robert Courteau, CEO, Altus Group. “Organizations that will lead the way as the next wave of technology arrives are those that seek to change the rules of the game by disrupting traditional business processes and models, adding greater value and gaining competitive advantage.”
Other findings from this year’s Altus Group CRE Innovation Report include:
- Only 14% of executive respondents say they compare their operational expenses against competitors, the market or industry, indicating a significant performance management shortfall, however, 69% believe there is significant potential to conduct better benchmarking around operational expenses. This suggests that a deeper analysis of property expenses is an overlooked area in terms of applying analytics and monitoring – and has the potential to unlock greater portfolio value.
- 58% say their firms are using significantly more CRE-specific applications now than they were three years ago, however 59% say they do not have significant integration between major management systems and applications, which can hinder their ability to make faster and more transparent decisions.
- 50% indicate their firms have a shortage of technology staff, suggesting that a lack of skilled IT professionals continues to be a barrier for CRE firms trying to make the most of their technology and data investments.
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