The Latest CRE Gadgets & Gizmos In One Word: PropTech
December 27, 2019
Now more than ever, your investment is in your
In the world of CRE, 2019 may be remembered as the year PropTech became a key buzzword in the industry’s vernacular. Short for property technology—or using information technology to research, purchase, sell, or manage the property—the concept has moved out of the residential market and into the commercial one.
For anyone watching from the
sidelines, it can be an overwhelming (or daunting) scenario. There are many
products currently available, and with investor interest, more are on the way.
Data is the bottom line
At the core of PropTech is
data: collecting it, analyzing it, and utilizing it. But the term generally
applies to several elements:
Software, like property portals and platforms, is used to improve property research and management, as well as to streamline communication between all parties involved with a specific property or project.
Hardware includes the tools that gather the data, such as sensors and drones. According to one estimate, over a trillion sensors will be connected to the Internet by 2022, and this Internet of Things (IoT) network will be collecting all kinds of data from building systems and energy efficiency stats to foot traffic to weather patterns. One company has even developed sensors to be placed on cranes at building sites to better understand and prevent expensive delays and extended deadlines.
Materials, such as bricks to act as batteries for solar panels and climate change-mitigation products, and manufacturing, such as 3D printing, are also key elements.
The new kids on the PropTech block
The latest additions to the PropTech
industry are start-ups. At the moment, there are countless start-ups around the
country competing for billions of dollars in investment capital. At the same
time, big names like Amazon and Google are jumping into the CRE PropTech arena.
While smart technology is pretty much a staple when it comes to new construction or repurposing older buildings, the increased amount of data and financial interest in PropTech are pushing next-generation development to the fringes of the CRE imagination in several key areas:
Expect greater use of drones, not only for capturing footage of properties from the air but also for data collection. More and more drones are being used to capture real-time progress on construction projects, as well as to map them.
With all of this data, someone—or, rather, something—has to sort through all of it to develop predictive analytics. Enter Artificial Intelligence (AI). While already responsible for virtual reality tours and filtered property searches, future AI will only be enhanced by areas such as biometrics, bots (for 24-hour customer support), geolocation tech (to better predict trends for specific properties in specific locales), and to oversee IoT technology that manages building systems’ usage and maintenance.
While today’s AI devices are designed to act intelligently, Machine Learning (ML) devices are a form of AI that is intelligent. By feeding data to ML devices, they will be able to learn for themselves.
In general terms, a platform is a means to digitally facilitate communication between individuals or groups of people. Think of it as a public ledger of data without the middleman. Blockchain, a platform that was instrumental in the cryptocurrency craze, is beginning to gain a foothold in the real estate industry, especially as it pertains to lease transactions, property acquisitions, maintenance records, and due-diligence processes for both full and fractional property sales.
Working together to make PropTech work
While there is no predictor
of which technologies will have staying power and what their exact influence
will be, one thing is certain: technologies, as exciting as they are, must be
able to work together. For example, IoT sensors will gather data for AI to
analyze and apply. Without one, the other can’t reach its full potential.
The same could be said about people. Without good relationships, successful CRE investment is a lot harder, if not impossible.