Technology is changing the way the world does business, and commercial real estate is no exception. Property managers, investors, and tenants are all focusing on how real estate technology can make their lives easier. Artificial intelligence, smart tech, machine learning, and other technologies are making CRE more profitable than ever for today’s real estate professionals.
- Types of Commercial Real Estate Technology
- The Correlation Between Technology, Artificial Intelligence, and Commercial Property Value
- Technology, Tenant Satisfaction, and Property Value
Types of Commercial Real Estate Technology
Real estate property technology, often called “PropTech,” is challenging traditional methods for acquiring, leasing, and managing commercial real estate across America. Technology infiltrates nearly every part of CRE, giving investors, property managers, and tenants fast, easy access to a multitude of tools.
There are many ways CRE professionals use technology effectively. From property acquisition to tenant communication, real estate technology is transforming the commercial real estate landscape.
Data Analysis Tools
Investors love data; it’s at the heart of CRE. In the past, investors would pour over data, spending weeks analyzing each area, searching for the right opportunity. Today, data analysis software and CRE data companies allow investors to identify with keen precision the best properties for their portfolios. And these programs do it all in a matter of seconds.
CRE technology programs allow investors, property managers, and tenants to see detailed reports about profitability, occupancy, maintenance, performance, and more. Furthermore, these programs incorporate machine learning, a type of artificial intelligence that allows computers to learn and improve without being specifically programmed to do so. Together, these applications allow users to gain even more useful insights as they use the software.
Big companies like Amazon, Facebook, and Netflix use artificial intelligence and machine learning to analyze user data and better predict what the user will choose next. In the same way, CRE technology companies can use data from recent online activity to guide behavior. For instance, market analytics can help investors identify and purchase properties that perfectly match their portfolio’s needs. Or analytics programs might guide a highly-qualified tenant to your investment property based on their requirements and past search history.
And because technology allows investors to identify properties and tenants faster and with less effort, investors can spend more time and money, creating a space that is attractive for high-quality tenants.
Property Management Software
Real estate technology isn’t just for buying and selling commercial real estate. Property managers like the pros here at CXRE use a multitude of technological tools to keep things running smoothly. After all, we believe that a tenant-centric approach to property management is ultimately the most profitable practice. Technology is changing the way property managers interact with renters.
CRE technology makes leasing and property management easier on both sides. First, property managers can easily list available properties, connect remotely with interested tenants, and even give virtual walkthroughs to interested parties. Second, tenants use PropTech to search building locations, filtering the results to meet their specific business needs.
After the tenant signs a lease, CRE technology helps the property manager communicate with tenants, schedule maintenance requests, and even manage security systems remotely. The possibilities are endless.
Smart technology allows users to control multiple systems – like heating/cooling, lights, security, and intercom music – via voice commands or mobile devices. New build office spaces and multifamily properties often incorporate smart-enabled technology into their spaces. As smart tech increases in popularity, buildings that offer smart tech are often more attractive and demand a higher rate.
As more and more investors, builders, and property managers move their businesses online, automation plays a crucial role in connecting all the players. Today’s world demands an immediate response. But most companies cannot afford to hire staff that can provide 24-hour service.
Automation CRE programs use “virtual assistants” to connect with website users, respond to emails, answer commonly asked questions, and more. This way, businesses can be available 24/7, even while humans are fast asleep.
Artificial Intelligence, or AI, is playing an increasingly important role in commercial real estate. AI is any program that allows a computer to mimic human behavior. Automation, virtual assistants, search engines, and other technologies use AI to help predict the user’s future behavior.
By predicting potential outcomes, AI can provide more relevant information to the user.
For instance, investors may use an artificial intelligence program to sort through property data or narrow down property searches. The more the investor uses the program, the better the program gets at finding relevant results.
From a property management standpoint, AI can help owners and managers identify the ideal tenant, screen them, and then manage their lease electronically.
Finally, from a tenant standpoint, AI helps businesses keep track of finances, contact property managers, and even schedule maintenance seamlessly.
There are multitudes of applications for artificial intelligence and machine learning in CRE.
The Correlation Between Technology, Artificial Intelligence, and Commercial Property Value
We’ve established that real estate technology is useful for CRE professionals. But is there a correlation between properties with greater technological capabilities and the commercial property value?
In short, yes. But let’s explore how.
Real Estate Technology Makes Your Property More Attractive to Tenants
Businesses, multifamily property tenants, medical facilities: no matter who occupies a commercial property, they want access to the most up-to-date technology they can get. Traditional office spaces need access to fast internet to keep their workforce connected. Businesses and restaurants want to offer customers free WiFi. Medical facilities need state-of-the-art security, energy sources, and communication systems. Multifamily property residents want smart-enabled homes that can connect all their devices effortlessly.
When investors and builders incorporate updated technology into a property, that space becomes more valuable. Technologically advanced buildings will attract higher-end tenants who will not only pay higher rent, but are more likely to occupy the space long-term.
Automation and Artificial Intelligence Mean Less Overhead Costs
By using automation, AI, and machine learning programs, investors and property managers will spend less on overhead costs. Let’s face it: computers take far less time than humans to accomplish tasks like bookkeeping, messaging, and scheduling. Therefore, investors and property managers can eliminate the costs associated with positions that were once deemed necessary.
By spending less on these administrative costs, investors and property managers will have more capital to invest in other projects or improvements.
Buyers and Investors Can Find Ideal Properties More Quickly
Using data analysis software and other programs, investors can identify and compare multiple properties at once. These CRE programs search a multitude of property types, options, and locations to predict which investment will have the highest returns.
Some technology corporations have paired with commercial real estate partners to provide off-market investment opportunities and identify properties that may become available soon. As a result, buyers face less competition from other investors, reducing the overall cost to purchase.
Effective Property Management Means Lower Occupancy Rates
The best way for property owners to make money is to find high-quality tenants and keep them in the property as long as possible.
Real estate technology helps owners and property managers connect with the ideal tenants for their space. Online searches and marketing identify potential tenants. Updated in-building technology draws in high-quality renters. And artificial intelligence and automated systems help a business to run smoothly.
Most importantly, real estate technology allows tenants to communicate with property managers easily. Property management systems help tenants pay bills online, connect with building managers, and request maintenance.
In this fast-paced market, ease of communication is key to keep tenants satisfied.
Technology, Tenant Satisfaction, and Property Value
The bottom line: technology attracts high-quality tenants. Technology keeps those tenants satisfied. Satisfied tenants stay in your property longer. Low occupancy rates translate to increased property value.
Investing in real estate technology, whether for your business, your property managers, or in building improvements, will pay off in the long run.