Digital transformation is all around us, in every facet of our lives. Software has changed the way we approach everything we do. Almost every question has its answer at our fingertips. When it comes to the digital transformation of commercial real estate, the future is now. Digital technologies and advanced analytics are helping businesses across industries learn and achieve more.
The term “digital transformation” has a broad meaning. In commercial real estate, digital transformation could be as simple as having a property owner embracing one element of technology to optimize day-to-day operations. The CRE sector has historically lagged behind in adopting technology — and for reasons that make a great deal of sense, as building owners and practitioners are often people with real-time emerging needs (property acquisition, pipes bursting, roofs leaking) that consume the bulk of their day. Typical CRE operators will have several building projects, but they are often very thinly staffed, leaving little time to explore technology and how it could optimize doing business.
It is also important to note what is covered in the traditional CRE press. Take a look at how much space is devoted to technology in commercial real estate publications. You will see articles about door handles and the latest energy ratings on commercial building systems, but little press around CRE-specific technology implementations. There has not been a great deal of emphasis on exploring any of the digital technology strategies that could prove useful to property owners. This is beginning to change. The biggest impact of the digital future is its capacity to transform a property company’s strategic vision and ambition. By leveraging digital technologies, companies can achieve more and do it faster than ever before. With new ambitions, however, come new challenges.
Tech companies that are successful in seeing their solutions implemented in the CRE sector are those that are successful in sharing how their software is a valuable tool and can be implemented to optimize a CRE property owner’s assets. My own firm came about as a response to the need to harness data to optimize CRE business. A vast amount of information is generated by a building’s occupants, and an owner can use this to understand and optimize the experience for both occupants and for the corporate bottom line.
The key in successfully sharing the message of the digital transformation and what it can bring to CRE is a practical approach. Today, in the tech sector, we are talking about artificial intelligence and virtual reality — lots of cool technology. When it comes to the CRE practitioner, in many cases, we are talking about a person who is manually collecting data. The smallest step is getting a property owner’s attention and showing them how CRE technology can be beneficial and can be of great value. It is important to help CRE practitioners understand that technology can meaningfully help optimize business and provide significant return on investment. Engagement needs to take place top to bottom in an organization, embraced from the on-site property manager all the way up to the head of the operation. Showing CRE practitioners what tech can do and how that can be delivered is the key in increasing retention and net operating income.
Taking a practical approach is important, too. The digital transformation is happening all around us, and the returns for businesses that embrace new technology are astronomical. The implementation(s) can be small; a business owner does not have to leap forward very far to see great benefit. Embracing this thought process and getting the message of technology to the CRE practitioner in the trenches will help bridge the gap we are beginning to see in the adoption of tech in the CRE sector.