Change is often slow in the commercial real estate industry, especially when technology is concerned. The next year will be a pivotal time for real estate firms as they endeavor to reposition themselves in a landscape shaped by a myriad of challenges, necessitating a reevaluation of strategies and embracing innovative technologies. It’s becoming increasingly clear that the traditional status quo will no longer suffice in this rapidly evolving sector.
One significant hurdle many firms face is the accumulated burden of technical debt—a result of relying on outdated and inadequate technology and systems. The cost of this burden is steep, affecting both time and money and resulting in lost opportunities. According to a recent survey from Deloitte, a significant 61% of CRE (Commercial Real Estate) firms acknowledge that their core technology infrastructures still rely on legacy systems. However, nearly half of these firms are making strides to modernize their operations. This acknowledgment is the first step towards a much-needed transformation.
The pressing need for change represents a prime opportunity for CRE businesses to integrate new technologies. By scaling up their capabilities, these firms can better navigate the current economic challenges and emerge successfully from the broader fluctuations in CRE markets.
The pressing need for change represents a prime opportunity for CRE businesses to integrate new technologies. By scaling up their capabilities, these firms can better navigate the current economic challenges and emerge successfully from the broader fluctuations in CRE markets.
Embracing new technology is not a one-size-fits-all solution. Different aspects of the real estate business demand specific technological solutions. From marketing and sales to lease and asset management, property management, tenant engagement, investment management, finance and accounting, and even construction management, there exists a diverse array of technologies catered to streamline these functions. The success of a business hinges on its ability to identify and implement the solutions that best suit its specific needs, allowing for more efficient operations and enabling swift and effective capitalization on emerging opportunities.
The commercial real estate (CRE) industry is undergoing a major transformation, and technology is playing a leading role. To remain competitive in the coming years, CRE firms must embrace new technologies and modernize their operations.
The true cost of technical debt.
Many CRE firms rely on outdated and inadequate technology systems. This can lead to a number of problems, including:
- Inefficiency: Legacy systems are often slow and cumbersome to use. This can waste time and resources for employees.
- Lost opportunities: Outdated systems may not be able to support the latest trends and technologies in the CRE industry. This can put firms at a competitive disadvantage.
- Security risks: Legacy systems are often more vulnerable to security breaches. This can put sensitive data at risk and damage a firm’s reputation.
Opportunities to incorporate new technology.
There are a number of new technologies that CRE firms can incorporate to improve their operations. Some examples include:
- Artificial intelligence (AI): AI can be used to automate tasks, improve decision-making, and gain insights into market data.
- Big data: Big data analytics can help firms identify trends, patterns, and opportunities that would be difficult to see with the naked eye.
- Cloud computing: Cloud computing can provide firms with access to scalable and affordable IT resources.
Different technology solutions for different aspects of CRE.
Depending on what sector of commercial real estate your business serves, there are different needs that technology can address. From selling better and faster to smoother operations there is a place for technology in every CRE business.
Technology can be used to improve a variety of aspects of CRE operations, including:
- Marketing and sales: Technology can help firms automate their marketing and sales processes, generate leads, and track their results.
- Lease and asset management: Technology can help firms manage their leases and assets more efficiently and effectively.
- Property management: Technology can help firms automate their property management tasks, improve tenant satisfaction, and reduce costs.
- Tenant engagement: Technology can help firms improve their communication and engagement with tenants.
- Investment management: Technology can help firms with investment research, portfolio management, and risk assessment.
- Finance and accounting: Technology can help firms automate their financial and accounting processes, improve accuracy, and reduce costs.
- Construction management: Technology can help firms manage construction projects more efficiently and effectively.
Solid ground in times of instability.
“Developments across the commercial real estate industry will likely be under the microscope for the remainder of 2023 and into 2024. How industry leaders choose to navigate the coming 12 to 18 months could be crucial in establishing a sturdy base of operations for the long term.”
No doubt, the future of CRE is uncertain. Today, we’re seeing the most successful firms reevaluating their technology needs and creating a solid foundation for the future by transforming their businesses to succeed amidst the rapidly changing CRE landscape.