A New Age for Commercial Real Estate
For many, when they think of real estate a physical building or property comes to mind. But there is a vast industry supporting real estate – from sales and leasing to property management – which is creating a paradigm shift and disrupting traditional methods.
Regardless of your knowledge of the real estate industry, ‘innovative’ and ‘progressive’ probably aren’t terms that come to mind. But no industry, not even the long-established stronghold of real estate, is immune to technological changes. Advances in and adoption of proptech have demonstrated that.
Proptech is short for property technology, defined as the use of various technologies to drive growth, increase efficiencies, reduce costs and enhance decision-making in the real estate market. These technologies can be applied to real estate transactions, investment analysis, development, construction, maintenance, property management, etc.
Proptech can impact the real estate sector by:
- Improving the transaction process, including leasing and sales
- Streamlining processes, including property operations
- Gathering and analyzing data to create solutions for real estate development and management
The technologies at play encompass all modern innovations, but most often we see automation, artificial intelligence, virtual and augmented reality, 5G networks, big data and the internet of things applied in various spheres within the real estate industry.
Proptech can help usher in efficiencies and streamline many of the traditional (and at times antiquated) processes. One simple example of this is the due diligence process for commercial property acquisitions. It is typically in-depth and consists of extensive forms and reports, few of which are standardized. Data can be messy and isn’t always digitized, meaning many efficiencies are potentially being lost. Companies are seeking to provide proptech data management solutions to help automate the process. Also, many companies are increasingly analyzing their real estate as a means to enhance operating margins and improve the employee experience, to attract and retain personnel.
From digital documents to virtual reality tours to data-focused property management software, all these advances may help property owners, managers, investors and tenants manage their assets or investments more efficiently and with greater ease. According to a KPMG survey of companies in the proptech space, real-time asset performance data, building optimization, transactions and use of consumer data are areas in real estate best poised for disruption.
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