The way the commercial real estate industry adopts proptech has changed, Connell McGill, co-founder and CEO of real estate company Enertiv recently wrote for Forbes. CRE owners are now less interested in proving that technologies work in small-scale deployments—they instead want to get things going at the portfolio level by scaling early successes with strategic rollouts.
“This is easier said than done,” McGill wrote. “Landlords know better than anyone that as much as they’d like to apply consistency across their portfolio, each physical asset, market and property type is different. What works in one place is not guaranteed to work somewhere else.”
So therein lies the problem—CRE owners desire consistency when applying proptech across their portfolio, but there are no guarantees that what works in one building, will work at the next. Meanwhile, no one wants a “generic” solution that can’t be specified to a location and drive value. CRE owners are now in a position where they have to identify proptech that is “just right”, or in a “Goldilocks zone” as McGill puts it. The solution has to serve as a scalable platform, but still be capable of targeted insights.
As the proptech world continues to get larger and more diverse, building owners and operators will have a vaster menu to choose from. However, McGill pointed to three trending technologies that CRE owners and operators should pay specific attention to.
CRE Trending Technology #1: Business Intelligence
A new crop of business intelligence tools has been created recently to help CRE owners aggregate and analyze data at scale, McGill wrote. Companies like NavigatorCRE are creating flexible and intuitive platforms that can break down siloed systems, clearly visualize data and provide CRE owners and asset managers with the tools they need to make better decisions. Prior to solutions like NavigatorCRE, building owners and operators had to comb through spreadsheets to retrieve information on every deal and lease. Business intelligence tools also save companies who have been trying to build their own internal tools, interfaces and data warehouses significant amounts of time and money.
CRE Trending Technology #2: Operational and Asset Intelligence
When property managers are hit with tenant complaints, they typically have an experienced building engineer they can rely on to figure out what the problem is and come up with a solution. This luxury could become scarce sooner than later however: McGill noted that 55% of engineering managers are over the age of 55 and 86% are older than 45. That means as the labor pool shrinks, CRE owners are going to have to find a new way to address tenants’ complains when something goes wrong.
Fortunately, there are proptech solutions to address this issue, mostly involving data. Sensors can catch data that can unveil insights pertaining to maintenance and repairs allowing engineers to save time by maintaining equipment based on usage rather than a calendar date.
Additionally, data can find pre-failure conditions in equipment so problems can be addressed proactively, which saves time, money and keeps tenants from getting upset. Companies like Enertiv can embed this type of data in mobile apps and virtual reality, allowing an experienced engineer to manage and support less experienced or skilled operators remotely. These solutions have returns on investment of approximately 12 to 18 months, but the value goes further, according to McGill.
CRE Trending Technology #3: Tenant Experience
As tenants become more demanding that every interaction be digital and streamlined, landlords are more frequently using building amenities to separate themselves from one another to attract people to their property, McGill wrote. According to Colliers International, there was a time where 3% of leasable square footage was dedicated to amenities like fitness centers and on-site dining. Today, that figure is closer to 10%.
Because tenants’ demand for such amenities has gone up, so have the companies that specialize in tenant experience apps. Companies like Bixby and HqO provide tenants with one spot to pay their rent, access controls and visitor registration, order on-site services and transportation and personalize their temperature and lighting controls.
“One by one, large commercial real estate portfolios are building teams responsible for identifying and scaling technology,” McGill wrote. “The difficulty of this job cannot be overstated. There are legacy systems, regionalized teams and huge amounts of unstructured data to sort through. Fortunately, technology companies are developing solutions at a rapid pace and are designing platforms to not only provide value, but to do so for a large and diverse portfolio of assets. These “plug and play” solutions are helping to ensure that no building is left behind.”