Deloitte recently released their annual Commercial Real Estate Inventory Outlook outlining trends to expect in the CRE industry in the coming year. The 2019 report emphasizes a need for CRE companies to embrace and leverage technology in order to survive in a changing industry.
We’ve previously noted on our blog, in resources and at events that while CRE may have been slow to adopt technology in the past, this is no longer the case. CRE technology is here, and now old-fashioned attitudes must shift. Deloitte’s survey respondents and 2019 CRE Inventory Outlook report only confirm this.
With this in mind, the biggest takeaways related to technology in the CRE industry from the 2019 report are:
Widespread use of technology is rapidly changing the way both tenants and investors think about the CRE industry. A major example Deloitte highlights in their report is WeWork, the coworking space provider that has grown from one location to 548 across the globe in less than 10 years. Companies like WeWork are changing the way investors think about CRE, from just physical spaces to more service-oriented experiences.
In Deloitte’s survey, 84 percent of investors said they expect portfolio companies to prioritize the use of predictive analytics, and 83 percent want companies to prioritize business intelligence. Surprisingly, blockchain was further down the list, with just 25 percent of investors expecting companies to make use of the encrypted digital ledger system.
Millennials and Gen Z have very different expectations of a workplace environment than the generations before them, and property investors are taking notice. This is important for both the properties they invest in, and the companies they work with.
Keep these investor and CRE owner and developer shifts in mind as we enter the new year. As property owners begin to use tools like augmented reality (AR), virtual reality (VR), the Internet of Things (IoT) and artificial intelligence (AI) tools to strengthen relationships with their tenants and make their buildings “future ready,” they’ll expect to use tools like these in their broker relationships as well. Plus, brokers should have a clear understanding of what these tools mean for buildings and their owners, and why investors care about them.
Continue to follow our blog for more insights on the ecosystem of technology in CRE and to learn more about how you can leverage the shifting attitude around tech to your benefit.