Globalization, new technologies, and mobile applications are accelerating industry innovations
In the last two decades, the residential real estate industry has undergone a radical transformation. Innovations like mobile technology and big data have changed and refined the sales, marketing, financial, and communications methods used to buy and sell homes. Despite these transformations, the commercial real estate sector has remained comparatively unchanged – with many brokers and companies relying on old-school tech like phone calls and spreadsheets to get the job done.
However, the commercial real estate industry is now beginning to evolve quickly; a series of new practices and technologies are saving time and increasing the efficiency of brokers, firms, investors, and other industry stakeholders.
1. Competition and increased global investment
The interest of institutional investors and large companies in diversifying their portfolios by acquiring or managing commercial real estate assets has been one of the most impactful changes to the industry in recent years. Commercial real estate, long the domain of tightly-knit family, and localized companies, has truly started to go global – and that means more demand, more competition, and new perspectives from corporate investors. It also means a new group of talent is flooding the industry – with entrepreneurs, business school grads, tech experts, marketing gurus and others now contributing to commercial real estate projects and transactions.
Additionally, this interest in commercial real estate has led to a proliferation in different investment methods and vehicles. REITs are becoming more sought after as an investment for everyone from individuals to institutional investors, while commercial real estate crowdfunding is growing more popular after the passage of the JOBS Act in 2012.
2. Technology and mobile apps
Until the last few years, the cloistered, familial nature of many of the largest companies in the commercial real estate sector also meant that it was often insulated from many technological innovations that revolutionized residential, as well as some of the broader shifts that affected the economy as a whole. That translated into less interest in apps and data analysis methods – but revolutionary change is now taking place as a result of new technology.
Some of the biggest changes are coming in the form of the increasing amount of mobile applications available for commercial real estate brokers and other CRE professionals. Apps like the Angus Mobility Platform, Visual Lease, CoStarGo, and Property Capsule are catching on quickly, allowing professionals to manage leases, compare sales, access tenant information, review portfolios, manage building control and monitoring systems, and conduct other business on-the-go.
This capability is essential, considering that brokers are usually mobile – constantly meeting with potential stakeholders owners to arrange deals.
3. Big data
Big data is also having a major effect on the commercial real estate decision-making process. With recent drops in the price of data analysis and innovative new software being developed regularly, companies like LoopNet, Real Capital Analytics, and CompStak, among others, are offering tools to help brokers better understand the short- and long-term risks and costs of various transactions. New tools also allow companies to analyze unstructured data that doesn’t fit well into spreadsheets, like search analytics, social media postings, and other digital sales and marketing metrics.
According to the CCIM institute, a professional organization for the commercial real estate industry, the percentage of commercial real estate companies that expect to be “data-driven” in the next three years will double to 56 percent – and it looks like this emphasis and reliance on data will only increase in the years to come.
Changes to the CRE industry means that stakeholders expect faster, more accurate data about all parts of their business – and the tools to work anytime, anywhere
Recent changes are making the CRE industry more mobile, more data-driven, and more competitive. If firms want to stay relevant, they’ll need to invest in the technologies and employees that can help them make smarter decisions faster – helping them create value for and better understand the needs of their clients.
To learn more about some of innovations that are rapidly transforming the commercial real estate industry, contact our team today at 954.474.1776, reach Ken Morris on his cell at 954.240.4400, or email kenmorris@morrissegroup.com for a free consultation.
Tags: commercial real estate
