It’s no surprise that some industries are more likely than others to adopt new technology. Commercial real estate, which is traditionally a paper and pen-based business with an emphasis on personal relationships, has not been quick to innovate when new tech solutions are put on the market. How come, you ask?
Likely because most available tech solutions are not holistic. They are too acute. You may find one solution that helps search properties, another that helps with financial analysis and another that helps obtain electronic signatures on leasing documents. The multiple options can be overwhelming and confusing — which negates the need for tech in the first place.
The Needs of Today
Thankfully, today we’re starting to see more holistic, smarter tools available that will simplify the lives of brokers, landlords and tenants. An increasing number of tech solutions offered today have been developed by industry professionals, rather than outsiders, that truly understand the pain points and how to best overcome them with a one-stop-shop solution.
The biggest pain point that agents need help addressing? Time. Agents are incredibly busy. They spend a lot of time answering common questions, negotiating prices and meeting with others. Second and closely related is efficiency. Typically there is a flurry of texts, emails and phone calls when it comes to scheduling showings or negotiating leases. These processes need to be streamlined. CRE professionals need a holistic solution that addresses these two issues – time and efficiency – head on.
Plus, over the years, we’ve become a self-service culture. People like to have needed information – often delivered by the latest app – at their fingertips to help make decisions. CRE needs to get on this bandwagon and enable faster access to data that allows for easy and quick decision-making. Other industries have accomplished this already, such as, E-trade with stock brokerage data and Compass for residential real estate. Yet, according to Altus Group, the industry is still siloed with one-third of professionals still relying on spreadsheets for asset and portfolio management. The industry has lagged a bit behind. The introduction of simple, complete solutions that consolidate data will help inch it forward. Thankfully, these tools are on the horizon.
In a relationship-driven industry like CRE, it is critical that any tech solution improves and complements the existing experience. The technology must be intuitive and deliver a positive and simplified experience for every user — broker, tenant, landlord, etc. The world has become accustomed to apps and the ability to simply tap a smartphone screen to accomplish tasks. There’s essentially no learning curve anymore. This means CRE needs to tackle top-notch UI, compatibility across multiple devices and access to up-to-date data.
Chatbots, Virtual Reality (VR) and Artificial Intelligence (AI) will also help push along adoption in CRE. We are already seeing chatbots speed the process today. Prospective tenants have several questions that typically lead to several email chains with brokers, landlords, etc. Now chatbots can respond quickly with answers to simple questions, eliminating wasted time with emails. VR is also enabling tenants to preview properties from anywhere as if they are physically visiting the space. The realistic 3D tours offered by VR help tenants make decisions more quickly about properties they want to shortlist without spending time driving from place to place. Finally, AI will learn tenants’ preferences and be able to predict what they want, while helping landlords better price their properties and minimize the negotiation process.
Beyond the leasing process
What about after the decision has been made and it’s time for tenants to actually move into the space? The tenant has a lot to juggle: furniture, movers, contractors, architects, utility companies, etc. Until recently, managing each of these pieces has been a disjointed process resulting in wasted time sorting through papers and emails. The solutions available today handle bits and pieces of the process, but not everything. In 2017, there will be more collaborative tools introduced that will better organize and streamline all the tasks that tenants have to manage when moving into a new office space.
It’s important to note that the need for personal relationships will not disappear in light of the uptick in tech adoption. Each tenant will have their own set of specific needs that will benefit from one-on-one human conversations. Brokers will take on more of a consulting role than they have today. Since tenants will have more information at their fingertips, they will lean on brokers to provide added expertise and perspective.
The momentum has been building. According to CB Insights, 2016 was the best year yet for real estate tech funding with a respectable $6.4B raised since 2012. In 2017, the industry will continue to build. This is the year the CRE industry can expect to see effective solutions that will enable brokers to save time, make money and operate differently.