Technology and Commercial Real Estate
Technology has long played a role in commercial real estate (CRE). From the methods used in architectural renderings to the tools investors use to study the local markets, technology has been at the forefront of CRE innovation. For example, technological advances like the Bessemer process improved the use of steel in skyscrapers in the 19th century. Technology also enhanced city infrastructure, enabling cities to accommodate a variety of CRE property types. For some time now, technology has altered the way commercial real estate is designed, built, bought, and sold. But in recent years, the technology and commercial real estate industries have been even further integrated.
Software has been developed and enhanced for building design, and artificial intelligence is being used to monitor the ways tenants can use common areas and office space. Technology is a broad topic with multiple market-impacting avenues. Current technology use in CRE is an indication of the future of both industries and how they are majorly impacting the market overall.
Technology and Retail CRE
It is no secret that online retail giant Amazon has massively changed the landscape of the retail industry. Brick-and-mortar retailers have been forced to step up to the online retail plate to stay in the game. Unable to compete, many well-known retailers have had to close several, if not all, of their brick-and-mortar stores to survive.
But while some companies are bowing out of the retail world, others are opening brick-and-mortar locations that include new tech. For example, last year, Nike opened a new store model that allows the customer to use an online reservation process for trying on shoes. This store also offers a mobile checkout, allowing the customers to shop without the hassle of a checkout line. These advances are what consumers are looking for, and that keeps foot traffic flowing through their doors.
CRE vacancies left in the wake of a changing industry, however, are now being transformed to add value to consumers. Malls are beginning to fill open spaces with medical clinics to create full-service lifestyle facilities. With the increased demand for medical office space, these empty retail spaces are an ideal opportunity for medical groups to provide much-needed outpatient care. The option to get an x-ray in the same facility that offers the latest iPhone adds new technological advancement to the retail CRE sector.
Unique Technological Uses in CRE
Aside from massive, well-known technological shifts that have taken place, like in the case of the retail sector, there are lesser-known tech inclusions as well. Usage of drone videography for aerial property views and 3D printing for commercial modeling have improved the property sales and developmental planning processes. Augmented Reality (AR) can also be an asset for city planning, offering a visual of potential infrastructural issues before they become real-time problems. And, this technology also provides an avenue for brokers or investors to view and “walk through” a property before ever physically standing in the space.
The Future of Technology and CRE
The latest technological update is the integration of the Internet of Things (IoT). This technology can connect multiple internet-based devices to help them function together. This idea can help form “smart cities“—large cities that collect and use data from electronic devices throughout the city. A test in Boston allowed the city to monitor “smart” trash cans, reviewing how full they were so they could plan their pick-up route. With this technological opportunity, more doors are open for the advancement of parking, infrastructure, and traffic flow in large cities. These potential advancements are significant factors in the economics and sustainability of a CRE market.
Technology is heavily affecting CRE, and each property owner will have to determine which tech elements can impact their property for the best long-term results.Technology is not simply a resource in the CRE industry. It is a necessary tool for CRE users to embrace technology, adding relevant value to their tenants and shareholders.
If you are interested in learning more about investing in commercial real estate, or if you have questions about buying, selling, or leasing a commercial property, please contact an HBRE advisor. Our team of experienced CRE professionals have the skills and insight to assist with all property transactions. To reach out to us directly, email [email protected] or call 615-564-4133.
