The process for building, selling and leasing properties has changed over the last few years. No matter what part of the real estate industry you’re in - land, residential, commercial or industrial - every sector has been doing some extreme heavy lifting to catch up with digitization.
But 2020 has radically changed the perspectives for the future.
The big question this year is posing is how will leaders adapt technologically so they can navigate through this pandemic and implement changes that will have a positive impact for the years to come?
While this is a question leaders across industry are dealing with, this article will highlight some of the trends and realities that the Real Estate industry will be seeing post-pandemic.
Let’s take a look!
1. Data-driven Changes and Decision Making
Today’s enterprises are swimming in data. Data points on owners, renters, companies, agents, socio-demographics, and geography are only increasing. The ability to turn that data into a business asset is a top priority for every IT leader.
With this priority comes the challenge of removing data silos while also maintaining consistency across departments - a recurring headache. Although not always brought to public light, strategic business decisions that rely on excel spreadsheets and patched versions of old software are still very much a reality today.
Sometimes this is due to budget constraints. Often though it’s because of the difficulty in onboarding upper management that not only sees the need to move past this (growing) technical debt, but also, and most importantly, knows how to make it happen.
One of our clients wanted to tackle a particular data challenge around vendor identification and selection.
The problem they faced was that there was conflicting and sometimes inaccurate information on vendors within each business unit. These units were unable to benefit from the existing data that the other departments had, despite the fact that many times they were dealing with the same vendors. By de-siloing our partner's data, we were able to create a centralized hub, a “single source of truth”, that brought efficiency into their process that all units could benefit from.
Another client approached us with a similar issue. Their problem was that their brokers spent thousands of hours entering data across systems that didn’t ‘talk’ to one another, resulting in a loss of insights within every step of the property sales process.
After getting with the stakeholders and breaking down their problem, we planned and designed a solution: an end to end commercial transaction management platform.
Working as a centralized CRM, it helped brokers fill the data gaps in their customer relationship journey - from their first conversation, to the contract, to renewal. This made it easy for brokers to make quick, data-based decisions. This allowed them to spend more time with their clients and ultimately sell more.
A consistent data strategy will continue to be a priority for every firm. It will empower tenants, landlords and investors to rapidly close the information gaps between customers, agents, and owners. Better insights will help operations departments decide whether to renew a lease or extend a contract with a service provider. Business intelligence solutions that leverage data analytics will help teams tame the sheer volume of increasing data.
2. Space Utilization Technology
Choosing the right work location for your team is always a difficult choice and 2020 is not making it any easier. As companies are forced to transition to remote, teams will need to learn how to use space more efficiently while scaling departments up (or down) rapidly. While some orgs have always maintained remote work practices, this unprecedented event will bring many explorers into new waters.
Ever since Pokémon GO revolutionized the gaming experience nearly four years ago, augmented reality (AR) has ceased to be just a buzzword. Big players, like Macy’s and IKEA, have been keen to incorporate this new tech within retail.
Real Estate has not been isolated from this trend.
Prop-tech is seeing an explosion as virtual tours went from being just convenient to an absolute necessity for commercial and residential real estate agents that hoped to close deals in a COVID-19 environment. The immersion experience, having promised to “boom” for some time, is now giving residential customers the ability to house hunt with more detail than ever before - all from the comfort of… well, anywhere!
One of our partners in the commercial real estate space approached us about their desire to build a proof of concept that leveraged this tech.
- Rent and investment trends
- Themes that shape the different markets
- Floor-by-floor data analysis for each building
By investing in new technology, our partner was able to ‘wow’ their customers and get a leg up on the competition.
For Facility Managers, the overhead on vacant space is a burden. Codelitt helped create a tool that met the challenge of space calculation head on. We created a platform that allowed our partner’s team to strategize, plan, and build their future workplaces. By linking planning capabilities with industry standard budgeting, the tool made it easy to quickly create code-compliant space plans in 3-D. Our partner could virtually “walk through” a planned space to get a more complete picture before breaking ground. This simplified the plan, budget, build and relocation processes.
Increasing the efficiency of physical space management for residential, commercial, and industrial firms has always been a high priority. New technology that makes this easier will gain traction this year as more companies embrace the end of the traditional office as we know it.
3. Geolocalization and Geospatial Intelligence
Location-based intelligence involves layering multiple data sets spatially and/or chronologically on a map. Its applications to real estate are changing the residential and commercial buying experience and bringing in more and more clients.
Solutions that run market analysis and property research can show in detail an overlay of commuter routes, school districts, neighborhoods, and workplaces. For a customer who is actively seeking a new home or office, being able to filter all this data to their ideal settings helps them make quicker and more confident purchasing decisions. It’s clear to see why empowering the buyer not only takes weight off the realtor, but also facilitates a more painless sale.
The same can be said for land investors. Searching for vacant land and visualizing data that impacts property value (flood zones/wetlands, municipal boundaries, zoning, traffic maps or land ownership) is a valuable tool for any developer.
Our partner, JLL, one of the largest commercial real estate companies in the world, needed a tool that assisted their consulting, portfolio management, and site selection. They wanted to be able to visualize more than 100,000 properties across the US in real-time for site-selection/acquisition and disposition/consolidation strategies.
To do that, we leveraged their enormous repository of market data that was generated by research and GIS teams. To their specifications, we helped design the experience for Blackbird: “a tool that goes beyond traditional site selection to provide insightful real estate information in a 3-D virtual space.”
“Blackbird enables JLL brokers to help clients explore property options across the country to gain a more complete sense of a property's attributes without the time and cost of an onsite physical inspection. Users can assess potential markets based on real-time market data like demographics, tax incentives and access to transit.
Once a market is identified, Blackbird renders a 3-D visualization of the property and stackable floor plans. It can even reveal neighborhood amenities such as coffee shops or identify walk times from subway stations. Key data points such as availability, rental rates and building class are available through Blackbird, and users can also see planned sites and buildings before construction even begins.” - Source: JLL
4. Facilities Management & IoT
Over the last years, the way facilities are run has been revolutionized by platforms that focus on enhanced asset performance, connected buildings and preventive maintenance management. Internet-connected devices (IoT) are generating datasets for buildings that have never existed before and can now be leveraged through machine learning.
Our customer had a particular challenge in their warehouse. They wanted to develop a proof of concept (POC) that allowed them to track and automate inventory management within their facility. Based on this, we prototyped Schneider: an autonomous robot that keeps track of valuable, portable equipment that is constantly on the move.
The robot positions itself using Bluetooth, Wi-Fi, or RFID. With built-in Artificial Intelligence, Schneider learns and automatically improves accuracy as it cruises through a space. It helped our client save hundreds of thousands of dollars as they would have otherwise used extra staff to manually manage and track this equipment.
Building owners, managers and engineers will continue to use IoT and machine learning to sift through data and unlock insights into market trends, building performance optimization and other big-data applications.
5. Blockchain, A Public Ledger To Spot Fraudulent Transactions
The marriage of blockchain technology and real estate is another promising one to look out for. In late 2017, a flat in Ukraine was the first property ever that sold using Ethereum blockchain. Since then, hundreds of start-ups that facilitate the buying/selling process have emerged.
This didn’t come out of nowhere — there are some traditional problems that were waiting decades for a solution like blockchain to address them.
- Blockchain technologies can make the process streamlined, as smart contracts are signed and verified by the means of the blockchain, not an official notary. This eliminates cumbersome formal procedures and dreary paperwork. It’s time lost and a distractor for all actors involved.
- Fraud prevention: As long as agreements are on paper, they can be falsified. A blockchain immutable ledger highly reduces this risk and makes transactions more secure and transparent.
- Cost reduction: Smart contracts link ownership of a property to the blockchain, eliminating the need for a trusted intermediary. This facilitates the transaction between buyer and seller
- Up-to-date and relevant property information is difficult to obtain. In fact, one has to pay in order to get it. In theory, the blockchain can store all the relevant information on the property and the parties involved. Not only is it stored securely, but the records can also be updated at any time without the approval of the intermediaries. Trust is embedded in the technology as immutable records are accessible in real-time.
While buying or selling a property will always be a physical affair, it is a fact that the future of real estate transactions is digital. Technologies that were long ago thought to be in their infancy (AR/VR, Blockchain and IoT) have a promising way ahead in real estate this year and beyond.
If you want to know more about how you can use these technologies to solve your particular business challenges, Contact our Team!
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