While many industries have quickly adapted to the changes brought about by the technological disruption, the Commercial Real Estate industry has been slow to adopt new technologies. But this slow adoption is causing the industry to have to play “catch-up”. Today’s tenants expect high-tech workspaces, clients and prospects operate in a mobile-connected business environment, and even commercial real estate investors are being drawn to online investment portals and the insights provided by big data and analytics. Now, new technology is enhancing how agents showcase yet-to-be-completed construction projects. A recent Wall Street Journal article explains how leasing agents for a Madison Avenue property are using virtual reality to showcase the end results of a $60 million renovation still underway.
“Agents for the 40-story office tower take visitors on a tour beneath custom-built canopies, where they can take in the lush greenery of trees and ornamental grasses and check out the outdoor conference area and wet bar. They can even peer over the glass-and-metal railing and catch a dizzying glimpse of the street below and a view of St. Patrick’s Cathedral across the way,” the article describes.
“Actually, the $6 million ‘Sky Lounge’ won’t be finished until next year, but Sage Realty Corp. isn’t letting construction hinder renting space in the 850,000-square-foot building. The leasing agents are simply giving virtual-reality tours: Each visitor sits in the marketing office, outfitted with headgear that is coupled with interactive 3-D modeling software.”
It’s one more example of customer desires to be ahead of the technology curve influencing a migration to new tools by real estate pros. It’s also opening the door wider for vendors to help solve the commercial real estate industry’s challenges. The technology referenced by the newspaper is offered by Floored Inc., a virtual-reality software and 3-D modeling firm.
“I think the truth is people recognize the speed of technological advancement is increasing,” David Eisenberg, chief executive and co-founder of Floored Inc., told the Journal. “A few years ago, if you only had 10 to 15 years left in your [real-estate] career you could ignore some of that stuff. Now people realize they are going to have to be practitioners of the technology.”
Disruption is already happening in several areas. Social media is changing how CRE firms market themselves. Cloud computing has helped numerous firms scale faster and become more efficient. Advanced analytics are making data more accessible and instructing professionals how to leverage it for growth.
“Inevitably, technology is going to change how we all do business,” QuietStream Financial CEO Robert Finlay says. “Virtual technology is just one more example of the disruption coming to commercial real estate.”
A 2015 study from Deloitte lists technology and automation among the most influential forces in the industry. Mobility, smart building technology, data and analytics and related technologies are all forcing major shifts.
Deloitte’s 2015 Commercial Real Estate Outlook polled 1,100 commercial real estate professionals and found 69 percent believe technology will transform their business this year or next.
“Adopting more advanced technology is rapidly becoming an imperative in CRE,” says the Deloitte study. “Ultimately, CRE companies need to be progressively aware of new advancements in technology, and anticipate and step up adoption on a regular basis.”