After spending many years disregarding modern technology advancements in favor of established processes, the commercial real estate industry faces a period of 'catch-up.'
This isn’t to say developers haven’t looked for modern solutions. Until recently, only outdated software, force fit for developers existed. Without purpose-built solutions for development teams, spreadsheets remained the best solution. But that’s changed with modern technology advancements that have well surpassed the capabilities of spreadsheets.
Many developers and owners have embraced the idea of adopting new technologies that optimize how they approach new projects. The property technology industry has grown by 1072% from 2015 to 2019 and in 2018, venture capital firms invested $8.3 billion in proptech companies around the world. With developers' and commercial real estate owners' newfound willingness to engage with technology, solutions have hit the market to satisfy the need.
With numerous developers entrenched in their manual processes, this is your opportunity to understand which technology solutions will best help your team soar to a new project delivery standard above that of firms who cling to the old methodology.
Here are the commercial real estate technology trends that can set your team’s project delivery apart from the rest of the industry.
Industry-Wide Digital Transformation
Real estate developers and owners need to be savvy enough to strategically implement new technology solutions and shift operations to more efficient collaboration tools.
56% of respondents to Deloitte's 2021 commercial real estate outlook believe the pandemic has uncovered shortcomings in their company's digital capabilities and has jumpstarted their plans to transform.
The statistic highlights how many real estate companies have taken a reactive approach to digital transformation. Taking the time to develop a structured plan, including finding and adopting the right technologies and data analytics tools, will yield more meaningful outcomes for real estate development projects moving forward.
Although the industry is aware of slow technology adoption and digital capability shortcomings, just 53% of U.S. respondents to the Deloitte survey said their company had set a digital transformation roadmap, showcasing how significant digital transformation is at this very moment and how crucial it is to take the first step towards software procurement.
Building a technology roadmap now can set your firm apart from half the industry.
Data-Driven Financial Technologies
Due to the pandemic, portfolio restructuring is even more critical to the success of your development firm than usual. With city population fluctuations and remote work becoming the norm, many office building developments are left in a state of flux. This has led developers and owners to reassess their footprint and shift their focus on becoming financially stable.
With the correct data analytic tools in place, real estate project delivery firms can better perform detailed asset performance assessments and forecast the future performance of their existing portfolios. In fact, according to the 2021 Real Estate Outlook survey, property operations and finance ranked first and second among anticipated investments in CRE functions.
As the new normal changes modern real estate development, financial partners will be looking to limit risk and work with developers that are sure bets. Firms that have a process for providing timely updates, produce clear-cut reports, offer real-time information, limit mistakes, and deliver attractive ROI won't find issues securing funding for their projects.
By leveraging data-driven financial management technology, you'll ensure your project team embraces modern processes and delivers projects on time and budget, ultimately making your financial partners happy.
AI and Automation
AI technology combined with intelligent automation will distinguish commercial real estate's top players from those with a near-sighted view of the industry's future.
Traditionally, real estate developers use spreadsheets and manual data entry to manage complex, seven to eight-figure development projects. With the latest CRE technology, developers can remove many of these antiquated processes in favor of error-free, automated reporting. Automation promises developers the elimination of hidden spreadsheet errors that often lead to budget misallocations and delays that your team must reconcile.
AI and automation are also helping developers fine-tune their repeatable processes, building a clear path towards full-optimized project delivery. Whereas those who stick to their current methods find themselves reinventing the wheel for each new project.
Just 45% of respondents to Deloitte's 2021 commercial real estate outlook plan to increase their investments in cloud, robotic process automation (RPA), artificial intelligence (AI), and digital channels over the next 12 months, again, presenting a significant advantage for firms that begin investing in technology now.
AI helps savvy real estate developers centralize project data so that it's not siloed in the accounting department files or in multiple spreadsheets across your project manager's desktop. This allows your organization to better understand how to approach projects effectively and deliver projects in an optimized, repeatable way, limiting wasted time and money.
There's never been a better opportunity for you to differentiate your real estate development project delivery from the competition with technology and in turn, increase your firm's ROI across your portfolio.
Are you looking to equip your development team with modern project delivery tools? Learn the common pitfalls that real estate teams encounter when searching for and adopting new software by downloading What Works (and Doesn't) for CRE Software Procurement whitepaper here.