New tech trends in the commercial real estate industry are being predicted by pundits and prognosticators nearly every day. While it is easy to spot something new, it is not easy to ascertain what is truly a trend that is here to stay. It requires an understanding of the different market sectors, the limitations of current technology and the habits of stakeholders. It is one thing to assert that a smartphone will control a building asset—and quite another to predict how the technology will evolve, how people will interact with it and what the ramifications will be.
Over the past 30 years, many technologies (and companies) have come and gone. Which are the ones with staying power? In the past year, the commercial real estate industry has seen the roles of designers, managers and owners evolve, consolidating in some ways, expanding in others. The common denominator is that technology must now service all stakeholders.
Following are 15 trends that will impact the built environment over the next year—and beyond. These technologies and concepts will reach into all asset types, including office, industrial, healthcare and others. As you’ll see, convenience, accessibility and flexibility are big drivers and, of course, technology is changing just about everything in big and small ways.
1 Blurring the Line Between Brick-and-Mortar and Digital
The way we use space is changing and the way buildings operate must follow. Technology affects how people use office buildings—and changes daily. Densification, adaptive reuse, flexibility, enhanced experiences and sustainability will continue to force change in our industry. It may be impossible to predict exactly what these changes will look like in one, five or 10 years, but it’s increasingly clear that organizations that are adaptable and agile will lead the way in creating brand loyalty. Industry leaders will continue to be those who think creatively about how they are using brick-and-mortar space to entice people—and how they are leveraging technology to optimize revenue.
2 The World Is an Office: Space as a Service
The new business model for the office sector continues to evolve as the user experience becomes paramount and organizations adjust to different needs. Newer generations of workers will continue to be a catalyst for workplace change. Many younger workers want, and even expect, the flexibility to work outside of traditional hours and offices. As the adaptive, seamless experience becomes the norm, it will become a draw for hiring and retaining talent. In a generation, this flexibility and access to tech may be considered essential to a productive workday.
3 Digitally Enhanced Occupant Experience
We have all gotten used to hailing a ride, buying tickets, ordering food and otherwise managing our lives on our phones in everyday life. From controlling lights and temperature to site access, today’s building occupants want the same control over their environment whether they are at work, shopping, at home or enjoying entertainment. Building operators must understand user needs and desires, as well as the simple logistics of providing a service or product. Beyond their physical comfort, these tools can provide easy access to mobile vendors or building services. With many workers spending long hours in the office, the ability to "run errands" from their desks is a huge value-add.
The threat of cyberattacks on commercial properties is real, but mainstream cybersecurity best practices and guidelines have not kept pace with hackers’ abilities to disrupt the industry. Building owners and operators will need a renewed focus on cybersecurity in 2020 and beyond.
4 Real Estate Companies and Digital Transformation
Mobility, the cloud and emerging technologies—such as artificial and augmented intelligence, augmented reality, virtual assistants, digital twins and others—continue to force change on every industry, including commercial and corporate real estate. Efficiency, a seamless experience and enhanced insight are all goals driving digital transformation. On the human side, productivity goals are enhanced and exceeded in the digital experience, contributing greatly to return on investment.
5 The Critical Need for Enterprise Architecture
Automated processes are helpful, but a cohesive plan that makes sure data is connected, integrated and interoperable is required to move things forward. The enterprise architecture—the plan and framework—is the foundation for digital transformation. Ad hoc technologies for one specific use will become passé as the strategic business plan influences all connectivity and integration investments.
6 The Everything Convergence and Edge Analytics
From building automation to connected buildings to the Internet of Things (IoT) for the built environment, resource reduction, operations and occupant experience will continue to converge and impact how we use and manage buildings. As systems and processes are refined, cost goes down and experiences improve; meanwhile, accurate data gathering and analysis remains paramount. The push for immediate capture of real-time data means remote processing locations or even the cloud may be too far. IoT devices (with multiple uses) will advance the importance of edge analytics for true business insights.
7 Understanding the PropTech Investment Landscape
Since 2009, billions of dollars have been invested, resulting in the launch of more than 3,000 PropTech companies. It is critical for our industry to provide accurate research and analysis to better understand both the opportunities and risks of this investment landscape. Technology is the means to an end—determining that purpose is critical. Understanding the business objectives of different asset classes can lead to guidelines for strategic analysis.
8 A Renewed Focus on Cybersecurity Threats to Real Estate
With the potential to breach information systems to take down buildings, electrical grids and even cities, the threat of a cyberattack is real. For building owners and their tenants, this can mean safety and security issues, a halt to business, a loss of revenue and a big headache. Real estate professionals rely on building a trusted brand to bring in continued business; if occupants’ safety is put at risk, this brand is tarnished and that’s not easy to fix. Mainstream cybersecurity best practices and guidelines have not kept pace with hackers’ abilities to disrupt the industry, and owners must stay on top of their vendors’ security practices as well as their own.
9 Big Data: Analytics, AI and Machine Learning
We’ve already expanded from ledger books and spreadsheets to business insights and advanced analytics. Now we are applying artificial intelligence (AI) and machine learning to data sets. In the future, real-time data gathering from a multitude of sources means faster and more advanced platforms will be making decisions for us. Whether for leasing, customer service and retention or building wellness, all areas of commercial real estate assets will be affected.
10 5G, CBRS & Next Generation In-Building Wireless
This higher bandwidth communications infrastructure has the potential to be as effective inside buildings as outside. It will radically shift not only the behavior of the "mobile warrior," but also how the building systems communicate with each other. Since many older buildings lack the best communications infrastructure, those on the leading edge of this technology will reap the benefits of the amenities they can offer.
11 Emerging Technologies: Augmented Reality, Robotics and Blockchain
While mass adoption is still slow, these paradigm-shifting technologies permeate many real estate sectors in specialized applications. We watched as drones enhanced aerial photography and videography for real estate marketers, and then architectural renderings became 3D as buyers were able to walk through a building without physically visiting the site. So it goes with emerging technologies. Once the first scalable case studies are proven, the rapid acceptance by the industry begins. As these technologies continue to saturate the market, we’ll see users and designers alike continue to find new and expanded applications for them.
Now we are applying artificial intelligence (AI) and machine learning to data sets. In the future, real-time data gathering from a multitude of sources means faster and more advanced platforms will be making decisions for us.
12 The Growing Tech Skills Shortage
The world is getting more technical, yet not enough of our college graduates will have the skills needed to fill the growing demand within the industry. The skill set now requires technical expertise as well as a solid building management background. The real estate industry as a whole is somewhat staid and slower to innovate; we will find ourselves competing with many other "cooler" industries for tech talent. Commercial real estate, specifically, will find it increasingly difficult to compete for skilled workers. Some educational institutions are taking up the challenge, but more must be done.
13 Global Concerns Regarding Privacy
For businesses and property managers to offer their customers an enhanced experience, they must gather data on users. Many believe there must be a choice between privacy and convenience. The General Data Protection Regulation (GDPR) in the European Union, the California Consumer Privacy Act (CCPA) and similar legislation in certain parts of the world take a very different approach compared to social credit scoring and mass surveillance in China. With sensors, microphones and cameras everywhere, building owners and managers must address the debate. Customers and occupants want convenience, but worry about their information being shared inappropriately. New technologies that allow a personalized experience while countering privacy concerns are now available and getting more robust. Consumers may require these going forward.
14 The Growing Tech Prowess of China
While recent headlines have emphasized the growing technology power of China, this story has been developing for many years. "ChinaTech" will have specific and potentially major impacts on the real estate technology industry. 5G, network design, cyber and intellectual property (IP) protection are a few of the touchpoints. China has already surpassed the United States and Europe in many areas of tech competition. As we contemplate this global issue, we must examine not only the varying business paradigms, but the political and educational aspects as well.
15 Getting Ready for the Next Big Potential Shifts
Amid all of this transformative and expansive change, the safest prediction for 2020 is, simply, more change. It’s impossible to reliably predict exactly where the next curveball will come from, but it’s likely already started. All of these trends have been slowly growing for years and savvy professionals have had their eye on them—and others. While you can’t always get it right, paying attention to new ideas and keeping an open mind can give you a big advantage in years to come.
The Big Picture
Most of these trends are directly related to technology and the impacts they will have on how we design, build, lease, manage and use commercial space. But the big overarching trend to all of these is the human side of the story. The bottom line is that humans—real people—are going to be the ones finding, evaluating, implementing and supporting these new innovations. This shift will require new vision and skills, and in many cases, a total rethink of the processes involved in operating buildings.
The major requirement in property management companies is organizational realignment. This is a breakdown of traditional organizational structure, the elimination of some departments, the creation of new areas of focus, identification of skills gaps and a realization that many of the traditional jobs and skill sets will be replaced by technology and automation.
This massive and disruptive shift will require a new generation of leaders who must learn to change the oil while the automobile is in motion, so to speak. It may require starting new smaller companies, unrestricted from the policies and culture of the old company, to actually compete.
In any event, moving into this next level of automation in our industry will require each and every one of us to come to the realization that dramatic change is on the horizon, commit to the change, acquire new skills and take risks that feel uncomfortable. Someone is going to figure out what the next highly automated, next generation property management company should look like—it may as well be you.
ABOUT THE AUTHOR: Jim Young is the co-founder and CEO of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world’s leading conferences on technology, automated business solutions, intelligent buildings and energy efficiency for the commercial and corporate real estate industry.
This article was originally published in the January/February 2020 issue of BOMA Magazine.