A generation of digital native tenants, who have grown up in an increasingly urbanizing and globalized world, is demanding a clear evolution from the past, not merely graded and gradual change. Meanwhile research conducted by CBRE recently noted that ‘over 78.0% of S&P 500 companies issued a sustainability report in 2018’, underscoring that sustainability is front and center, when it comes to commercially viable business models. PWC added more momentum to the argument that the CRE industry needs to lean on technology, as a means to empower its stakeholders rapidly and transformatively, by listing IoT, AI and Big Data Analytics as three of its top five in a list of commercial real estate disruptors.
Clearly, commercial real estate is in the midst of a long awaited churn and reinvention. Equally obviously, technology is the prime mover of this transformation. As with every other industry that has felt the impact of digital transformation, the key for commercial real estate to adopt technology most effectively is to identify priorities and back a tech driven approach that best addresses them. Fortunately, breakthrough technologies in Proptech are already enabling a slew of gamechanging possibilities and, for its part, the industry too is taking on an innovation driven consensus.
7 key priorities around which the next iteration of commercial real estate will be built
Data is the resource on which all digital transformation eventually depends and commercial real estate is no exception. In fact, given the huge quantities of real time data that buildings inherently produce, the industry is in a particularly advantageous position to leverage it. Following an automation driven upgrade of its assets, followed by the adoption of digital tools such as legacy CaFM software.
In its recently released ‘2020 State of CRE Operations 3.0’ report, Facilio Inc., developers of the world’s first unified IoT, AI and ML driven software platform for Facilities O&M, found that adoption of data-driven CRE will be the defining element of the next generation of smart automation. These technologies will form the backbone of apps and point tools that enable enterprise scale predictive and real time analysis driven portfolio operations.
The outcomes that this emerging data enabled model needs to prioritize, to generate the most growth and positive disruption, include:
Predictive asset management: Real-time IoT based data collation enables a predictive model of asset maintenance and performance optimization. Central digital repositories of inventory, analysis, fault detection and performance monitoring will result in leaner and more agile CRE business models.
Customer is still king: Delivering exceptional and personalized tenant experiences is the most effective way to create brand differentiation for CREs. Responsive multi-channel tenant engagement is non-negotiable, if the industry is to address the needs of its customers.
Unprecedented Sustainability: Buildings consume 70% of the world’s electricity. That short sentence contains within it the scale of the opportunity on offer, which data-driven models and granular transparency can enable. Sustainability is one priority that all stakeholders, including regulators and tenants, are fully on board with, and for good reason.
One stop solution: Centralized data empowered management of building portfolios is not merely about getting an effective big picture view of the business. The complexity of assets and stakeholders in commercial real estate demand a unified operational approach, if all the opportunities for optimization are to be effectively leveraged.
Being future ready: In the last decade or more, the emergence of a technocratic model for managing our world has manifested in the vision for Smart Cities. Once still a distant dream, the emergence of digital retrofits and 5G has suddenly made such cities a far more distinct and affordable possibility. CRE businesses should prepare themselves for this seismic shift, if they want to remain relevant.
Maximizing opex outcomes: One of the most obvious measures of business efficiency is the outcomes generated for the investment made. Data and tech driven CRE models are the clear leader, by some considerable distance, when it comes to delivering bang for the investment buck.
Empowered workforces: As dramatic an impact as technology has on business models, human resources continue to have the final say in ensuring the change is optimal and cognizant of the full spectrum of possibilities. Data-driven decision making – from boardrooms to building floors – can transform productivity to an extent that no previous model has even considered as a possibility.
Targeted and fit for purpose – the crucial role of priorities in leveraging technology
In an industry rapidly adopting tech-driven solutions, the unification of all operational data and having a single pane view of portfolio operations will emerge as the key strategic evolution, in 2020. As a foundational capability to future proof buildings, data consolidation will enable the optimization of the efficiency and sustainability profiles of buildings, as well as enabling the rapid scaling up of emerging technologies in future. A bright, tech empowered future is emerging for the CRE industry, and a real time, data-driven and centralized approach to operations may be the north star on that horizon.
Given the huge impact of Covid-19 on managing properties and commercial real estate operations, it’s all the more essential to leverage unified data, to tackle the need for unprecedented levels of strict hygiene, enable remote BMS/BAS operations, and manage visitor footprint. In our next blog, we will be deep-diving into how these outcomes can be best achieved, rapidly and at an industry wide scale.
(The Author, Nivedha Sridhar is the Director of Content & Growth Strategy as well as a member of the Founding team at Facilio Inc.)