Commercial real estate has historically relied upon in-person interaction to get things done, but an influx of new technology is transforming the space.
Now, transactions, updates, searching and more can all be done with a few taps on your phone, from anywhere in the world.
This shift is radically altering how commercial real estate brokers and landlords approach properties and handle data.
We’re in the middle of a complete sea change in terms of how tech is transforming how we access data…
“We’re in the middle of a complete sea change in terms of how tech is transforming how we access data and how we, as professionals, get access to data and lower the cost of that access,” says Brandon Weber, CEO of Hightower, a leasing management software company.
There are five major areas of opportunity for tech to disrupt real estate, SoftBank Capital partner Josh Guttman (who has invested in real estate tech) wrote in TechCrunch last year.
Aside from mobile apps, areas like property management, research and analytics, listing services and residential and commercial lending can be reconfigured, all thanks to technology.
Property management software allows owners and management companies to track their assets. With property management software adoption around the 10 percent mark as of last year, according to Hightower’s Weber, a lot of opportunity remains.
With municipalities allowing more access to their data than ever before, developers are altering how the data can be used, with analytics software being used on an on-demand basis.
The regulatory environment is also helping push tech further into the space. Thanks to new regulations, there are now opportunities for tech to play a role in real estate lending.
Not only is the proliferation of smart devices dramatically shifting the landscape for real estate, but there’s also a “one-stop-shop” mentality altering the scene.
Hightower has developed a cloud-based platform for commercial real estate landlords and brokers to analyze, track and manage various properties in real time.
The platform allows landlords to manage their deal pipeline, run financial analysis, and track performance relative to a benchmark, among several other features—all while integrating it with the landlord’s property management system.
“Before Hightower, you’d have to go to 20 different places to find all these answers, and then get the answers in a day or two,” Weber says of his company.
“Landlords like it because it’s not only saving hundreds of hours a month on reporting, but they see it helping them reduce their risk in real time because of the data.”
Most real estate tech companies seem focused on improving the efficiency conundrum. Renters may be contacting more people than they need, with landlords suffering from the same issue.
With real estate being one of the largest expenditures in business, money is flowing into the space hand over fist. In 2015, nearly $1.5 billion of venture capital money entered into real estate tech companies, up from $1 billion in 2014, according to research firm CB Insights.
Continued advancements in global positioning systems, and especially map-based search, have aided the process.
“[Map-based search] puts it into context where someone is going,” Zillow’s vice president of rentals Dan Hang says.
Data mining and targeting has become much easier in real estate over the past several years, with terabytes of data now available.
Residential renters can now give information, such as income, credit score, number of family members and pets, much earlier in the process than in years past. This may result in the landlord getting fewer leads, Hang notes, but “higher quality leads.”
There are around 10 million people who move into a new rental every year on the consumer side, Hang says, with more changing spaces commercially, thanks to 2.7 million jobs being added last year, according to a white paper from the National Association of Realtors.
Technology has radically altered how easy it is to access data—the lifeblood of the industry—with broader implications down the line.
“We’re in the first inning of this [commercial real estate] ballgame and it’s really going to get interesting over the next 12 months as these companies hit scale,” Weber says.
“Now, everyone has access to every piece of data they care about in the palm of their hand, which I think will not only change the speed of the industry, but how it reacts to things, and can alter the analysis on how we buy and sell as well.”