Innovation. Technology. Disruption. We are constantly made aware of the disruption happening in a wide swath of industries resulting from innovation enabled by technology. Fundraising is newly enabled by crowdsourced platforms. The transportation market has been challenged by ridesharing. Our concept of lodging has expanded to include stays in personal residences.
When thinking of the investment and change that is happening in the commercial and residential real estate markets, it is not clear what changes are enabled by technology versus changes in how space is used as a result of shifts in societal, consumer and business preferences. Any change is commonly grouped together and attributed by one source — real estate technology.
There is no doubt that the way commercial space is designed and consumed is changing rapidly with the expansion of the millennial generation now making up the majority of the workforce. Coworking provides an alternative to traditional long-term leasing, allows for lower capital expenditure and is commonly a work environment which helps companies to attract and to retain talent. WeWork, Industrious, Spaces, Knotel and others are all new options for tenants to consider. Co-living presents new alternatives to apartment leasing. These new innovative space alternatives are disrupting how space is supplied to the market.
Platforms Enabled by Technology
In both the residential and commercial markets, information about available space options were, in the past, only available to realtors and commercial brokers who controlled the distribution of market information. The consumer preference for mobility and the increase in open platform options created the demand for MLS information to be distributed through multiple channels such as Zillow and Trulia. Increasingly, commercial space is being directly channeled to the tenants and buyers through new aggregated channels such as LiquidSpace, Truss or 42floors. These new real estate technology-enabled platforms are leading change in the industry.
The Blockchain, Artificial Intelligence, Internet of Things and Machine Learning are the emerging technology capabilities being adopted by start-up platforms that will yield further change in the real estate industry. The ability to predict when a property will come to market or to eliminate inefficient intermediaries or to use space more efficiently will result in new roles and services offered by participants in the real estate market.
It is becoming increasingly imperative that all firms in the real estate industry need to also be technology forward firms to the extent that they innovate in their services they provide, become more efficient in their operations and be nimble to adjust their business model due to disruptive technologies. Further, companies which embrace innovation and remove friction points to create a customer-centric experience will be the segment leaders in the future.
Dan is Executive Vice President of U.S. Operations for Colliers International. With a highly successful and diversified track record of operations management, he has more than 20 years’ experience in the CRE industry.