There has been an unmistakable clamor over the past few years regarding the use and application of technology in all aspects of commercial real estate.
From discussion panels, blog posts, social media conversations to the creation of standalone “technology spaces,” it seems that every major legacy industry conference has dedicated a large amount of time, energy, and attention to representing CRE technology. While I’m not quite sure the title of this post, which restates Marc Andreesen’s 2011 quote “software is eating the world” is fully applicable quite yet, there is certainly some pre-meal snacking taking place.
In fact, in a 7-day timespan, I’ll have attended 3 separate, very well-run and attended events devoted specifically to this melding of commercial real estate and technology. (For those who are curious, I’m talking about ULI Tech & Real Estate, CRE Tech Intersect / NYC, and DisruptCRE / Boston.)
The majority of this clamor has been driven by the tremendous amount of investment in new technology startups entering the market over the past few years. This is an interesting development, considering that it is coming from an industry long considered to lag behind in technology adoption.
Needless to say, these new venues for discussing CRE technology have provided me with a lot of interesting insights into the future of the industry.
The Rise of the Conversation Conference
Conferences can be a great source for learning about innovative products, services, and processes, but they haven’t always been so great with helping attendees bridge the gap between the three and what their needs are.
With the growth of the Conversation Conference, it has become easier for executives, innovators, and other commercial real estate professionals to engage with each other to share ideas, instead of simply pitching and selling each other.
Decision-Makers Want to Innovate
When you share ideas and try to engage in the betterment of your processes you have to be prepared to hear the negative stuff as well – and that’s a good thing!
For example, I heard from several CRE executives was that there is a general frustration regarding the lack of help from CRE technology companies when it comes to deploying a technology to improve their processes. They want a partner, not a provider.
I also noticed an interesting mix of private and public sector interaction – signaling that there is definitely a connection between the future of cities and commercial real estate technology.
For example, as cities and buildings become denser, the strain on infrastructure and things like land use for parking will become greater. This will require a cooperative creativity as well as collective foresight to handle the accelerated acceptance of technologies such as autonomous vehicles, which will affect how people get to and from the workplace.
Mobile data networks, location services, the Internet of Things, and abundant computing power are among the 6 major trends that will affect cities and buildings over the course of the next 10 to 20 years. (per Dan Doctoroff, Sidewalk Labs)
This means that commercial real estate companies need to be willing to be more fluid with their data, connecting one service to another in order to rapidly analyze how their teams provide service to tenants, and become more efficient.
Don’t Disrupt, but Rapidly Improve
Keeping all this in mind, it is important to note that most CRE executives don’t live by the same adoption rules as other, more consumer-centric service providers like an Uber or AirBnB. They would much rather deliver rapid, but incremental technological improvements to their processes than completely disrupt them.
My sense and experience in this space tells me that while there’s tremendous progress being made on the CRE technology front recently, there is still a lot of work that needs to be done before “software eats real estate.”
Much of that work comes from the need (and time) required for real estate companies to feel comfortable making the full commitment to the proper adoption and utilization of CRE technologies to change the way that they have historically worked.
This makes sense. Change and improvement can’t happen if you’re using software just to replicate already inefficient processes!
“It’s true that many big old companies are still operating much more slowly. But that’s not because of the inherent nature of the work. It’s because of the obsolete management practices of hierarchical bureaucracy that are in place.”
– Steve Denning, Forbes April 11, 2014.
Changes like these take a lot of work, time, and cooperation between the customer and their partnered provider. The good news, based on my observations, is that we’re already actively having that conversation.