Industry Focus: Commercial Real Estate
Are you a job seeker whose field of interest includes commercial real estate technology? If you are, there are some exciting and ground-breaking jobs waiting for you. The commercial real estate industry has evolved with the introduction of technology and, along with it, so have many new job opportunities. The spotlight is now on skilled engineers, technicians, software developers, and cyber security specialists. This informative article will introduce you to commercial real estate development and all the new careers it has to offer.
Commercial Real Estate and Technology
Technology has dramatically transformed our personal and professional lives. Rapid technological advancements and significant demographic shifts, such as growing urbanization and lifestyle patterns of new generations, have increasingly influenced the real estate industry. In addition, innovative start-ups are also contributing.
According to Forbes Magazine the commercial real estate industry is valued at $12.6 trillion. That is why investors, developers and builders hold are optimistic that the industry will continue to grow. Moreover, regulatory developments and macroeconomics continue to have a profitable impact.
A key factor to success is finding enough resources and combining them with smart, innovative, future-oriented people who will take commercial real estate to the next level. Decision makers from smart cities, change-making companies, start-ups, forward-thinking universities, dynamic organizations and the public sector will all have their shining moment in this fast-developing industry.
Which Technological Developments have been Introduced to Commercial Real Estate?
Various factors can contribute to the advancement of commercial real estate. For example, smart controls for buildings give them a “central nervous system” that balances and reconciles competing interests such as energy minimization, occupant comfort, and grid stability. Things like fire protection, climate control, ventilation lighting, and video surveillance are today usually still controlled separately. On the other hand, modern management stations enable all building systems to be integrated into one platform.
The most widely used software and technology applications in terms of business solutions for commercial real estate include:
- Accounts Receivable/Payable – 87%,
- Work Order Processing – 70%,
- Property Management Software – 61%, and
- Lease Administration – 55%.
These results offer an insight into how real estate companies integrate technology in the areas that are traditionally applied by different industries, such as accounting and work order processing. Also, it shows that they are beginning to use newer solutions that are specifically designed for commercial real estate applications, such as property management and leasing software.
Commercial Real Estate Startups
The commercial real estate tech industry has introduced some incredible innovations that significantly impact on the everyday business conduction of commercial real estate professionals. Here are some CRE tech trends which will catch our eyes in 2017:
Blockchain technology is an innovation that is likely to transform the industry. This Bitcoin-inspired technology has the potential to speed up the closing process and simultaneously cut the costs for the user. Blockchain also works to reduce real estate fraud.
- Virtual Reality
Brokers have already experimented with virtual reality, mostly for high-end properties and commercial developments. Virtual reality could be the next step when it comes to commercial real estate experiences. It has great potential since it can be used to reduce errors in construction and to give an appealing property tour experience.
- Internet of Things (IoT)
The Internet of Things will contribute by improving efficiency and value of building control operations. The IoT in commercial real estate includes the use of smart sensors, which monitor everything from room occupancy to humidity. IoT adjusts settings automatically, without needing to deal with building maintenance.
Innovative Companies in Commercial Real Estate Technology
Various companies around the world have offered their contribution regarding commercial real estate technology. For example, CBRE, the world’s largest commercial real estate service and investment firm, announced that they will acquire Floored, a NYC based company that creates interactive 3D graphics and technology for the hospitality and real estate industries.
Historically, the process of searching for commercial space was often laborious. It involved you, your broker, and a set of listings that your broker had access to. This limited the options and a lack of data meant that the market was harder to explore. 42Floors company found a solution for these problems by aggregating many different sets of listings and displaying them on its online platform. Users are therefore given the opportunity to search for desired rentals through the commercial space index.
NYC-based startup SquareFoot has a similar solution to rental issues but with an addition. They offer leasing advice, and brokers put their efforts into guiding businesses through the entirety of the leasing process. Additionally, SquareFoot’s platform enables easier communication between brokers and tenants, allowing them to make all arrangements online.
Technological enhancement is leading to empowerment for commercial real estate companies. For example, Prologis, an industrial commercial real estate leader, experiences growth on an annual basis. In 2016, results showed that FFO (Funds From Operations) increased from $2.23 to $2.57 per share, year after year. Net earnings were also admirable, reaching about $1.2 billion, which shows an increase from $863 million in 2015. The company has millions of square feet which are under development across countries, including Europe, the United States, and Asia.
Job Opportunities in Commercial Real Estate Technology
Technology-led development is also beneficial in terms of job opportunities. Higher educational quality is one of the most important benefits of a smart city. This affects educational institutions as well as cities and citizens as individuals. It pushes schools and colleges to make technological progress and to show demand for e-learning programs in curriculums. People with a higher level of education, with knowledge in real estate and technology, will have their chance to shine. Furthermore, individuals with higher levels of education are likely to show initiative for smart city innovations and development.
Attracting Smart People for Smart Nations
Freddy Boey, deputy president and provost from Nanyang Technological University in Singapore asks: “Around the region, in places such as Hanoi, Jakarta and Kuala Lumpur, how do you attract the best minds?” He continues: “You need smart people for a smart nation and you need manpower to make it sustainable.” The primary reason, he says, is that without smart people who can deliver on smart city promises, there will be a public perception of failure, which can negatively affect future undertakings.
Regarding job opportunities, engineers and skilled technicians who can build on technology will be in high demand. However, software developers, and robotic, Internet of Technology (IoT) systems, and cyber security specialists will also be required to contribute their knowledge and expertise in order to create a better tomorrow. Improved education levels and skills will definitely be needed for job roles in real estate technology.
Educational institutions recognized this trend and many are offering dedicated real estate programs. Just a few examples are:
- NHTV Breda University of Applied Sciences (NL) – International Real Estate and Facility Management
- KADIR HAS University (TR) – Real Estate and Asset Valuation
- University of Bolton (UK) – Building Surveying & Property Management
- EBZ Business School (GER) – Real Estate
- University of Nikosia (CY) – Business Administration: Real Estate
- KTH Royal Institute of Technology (SWE) – Real Estate and Construction Management
- SRH University Heidelberg (GER) – Facility Management
- Antwerp Management School (BEL) – Executive Master in Real Estate Management
- ZUYD University of Applied Sciences (NL) – Facility and Real Estate Management
- University of Sarajevo School of Economics and Business (SER) – Property & Finance
- Metropolia University of Applied Sciences (GER) – Construction and Real Estate Management (in cooperation with FHTW Berlin)
With more than 200 smart city projects across the world, there are huge opportunities for IoT vendors, service providers, platform providers, and consulting companies. Every educational institution that offers training in these skills will be in high demand. Both students and graduates with expertise in these fields will have opportunities to contribute to the development of commercial real estate. They can confidently apply for internships or full-time job positions at companies within the industry.
The Future of Commercial Real Estate
The development of commercial real estate technology is helping real estate professionals to provide a better service. While economic growth in 2016 was moderate, expectations for 2017 are more positive. With great minds investing time and effort into this growing industry, future technology may well erase outdated commercial real estate strategies. Technology saves money, increases efficiency, and improves the client experience. In this way, the technological revolution will continue to break the industry boundaries.
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If you liked this article, you might also be interested in the impact of Smart Cities on Residential Real Estate.