2018 has seen a lot of transformative movement in commercial real estate. The year witnessed a competitive home buying market, and many observers expect a correction in the coming year. In a year that has witnessed a steady growth in commercial real estate low interests, it is important to examine the technology changes that may disrupt this market.
There is a lot of rave surrounding Augmented Reality (AR), Virtual Reality (VR), Artificial Intelligence (AI), Blockchain, Autonomous vehicles and other emerging technologies which we covered in the top 6 technology trends impacting commercial real estate in 2018. The past discussion of these emerging technologies has been more of an awareness, but there is a move towards action as builders are now becoming more creative through the use of technology.
As these emerging technologies get deep into commercial real estate, they are producing opportunities, as well as challenges. In this article, we are going to explore these technology trends:
Property technology (proptech) is already in the commercial real estate mainstream. According to CB Insights, it is expected to bring in a new $3.4 billion USD in 2018 across 454 equity deals. Proptech covers everything from investment platforms and digital brokerages to new lending services and real estate apps. As demographics shift and tenant and customers behaviors evolve, this trend will only intensify.
With the provision of flexible leasing options with features like networking opportunities, events, and other business services, proptech sees a major impact from real-estate-as-a-service and collaboration spaces.
2. Increased Rise of Artificial Intelligence
Artificial intelligence has been garnering hype for years now. We talked about it in the 2018 article on technology trends in real estate. Tech startups have started integrating AI into their market analyses, but the most relevant use of AI and other emerging technologies will be in building management, design, and organization. For example, companies like The Edge, which are into smart buildings have already discovered a big potential in analyzing the behavior of users in their shared office space. The use of the data in redesigning their workspace layout, refining their offerings and creating a virtuous feedback loop.
For commercial real estate, ULI reports that artificial intelligence offers building safety and efficiency, as well as property access and security.
3. Cyber Risk Management
In the commercial real estate, risk management seems to focus on tenant risk, interest rate, and to a degree, portfolio risk. Technology has expanded the scope of risk with evolving business complexities. Hence, there is an increasing concern over information security and data privacy; and, many commercial real estate companies are struggling to balance efforts on investments and handling of cyber attacks.
As a result, in 2019, there will be an increased demand for cyber risk management. Commercial real estate owners may need to assess their employees for exposure to cyber risks, and also train them in understanding the potential threats and implications of cyber attacks and crimes.
2019 will soon be upon us. Is your company positioned properly to benefit from the top three technology trends that will shape real estate in 2019?