Commercial Investment Real Estate September/October 2019 | Page 22

TECHNOLOGY
SOLUTIONS
Stability Through
Tech Disruption?
Software tools for communication and data analysis could
help streamline your business rather than cause unrest.
M
any in the industry, including developers, brokers
and lenders, look for ways to stabilize and smooth
out the extremes of historical economic cycles.
While the technological landscape is ever-changing
and can be intimidating to some, these tech solutions offer valu-
able tools to help mediate these extremes.
History has shown us that cycles in our industry typically run
in approximate 10-year spans. I recently heard about a top inter-
national brokerage firm that engaged a well-respected think tank
to examine the past 75 years. After months of research and col-
laboration, the firm delivered its report, with the team wheeling
in nearly 100 boxes of data-heavy documents to support a conclu-
sion that sounds too simple to be true: Markets tend to go up in
years that end in a three and down in years that end with an eight.
With some slight variations, in my 40-year career, that trend
has held remarkably true — at least until 2018. All in all, for
commercial real estate, it was a good year — even if one could
find signs of a slowdown or an impending market correction.
Could technology help the CRE industry weather economic
instability with creative, innovative approaches to doing business?
Being in a late-cycle economy, CRE professionals need to think
outside the box to keep the good times rolling.
In a report on emerging trends, PwC reported “whether
deserved or not, the real estate industry has a reputation for being
slow to adopt new processes and technologies. This may be due
to the fact that the industry has always emphasized personal
relationships or because a firm’s superior proprietary knowledge
sets it apart from the competition.” But such resistance isn’t pos-
sible in today’s dynamic market.
Can Technology Be a Stabilizing Force?
Stability is the strength and/or capacity to withstand or endure.
Specifically for CRE executives, this means the ability to smooth
out the inheritably cyclical nature of profit and loss statements.
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September | October 2019
CRE technology can be overwhelming, but it is easier to digest
if you think about it in four major components:
• Proptech, which deals with software and technology
for construction, building operational analysis, and
tenant relationships;
• Fintech, which deals with new software and technology
for financial analysis;
• Artificial intelligence (AI), which deals with data
aggregation and interpretation; and
• Operational efficiency technologies (OETs), which focus on
streamlining and increasing productivity, cost savings, and
profitability through automation of back-office functions.
These components can bring stability to the industry in differ-
ent ways, although proptech and OETs can quickly stabilize the
bottom line.
Property owners want their buildings to be “sticky,” meaning
that tenants make their decision to renew not solely on economic
savings. They should also factor in the environment and com-
munity provided to their workforce.
To help, the explosion of proptech applications dealing with
building operational analysis and tenant relationships provides
property owners and managers a deeper understanding of
how their clients (tenants) currently use and want to use their
buildings. Technology is more than compiling data — it’s
translating that data into powerful insights that allow you to
make better decisions.
Technology has moved well beyond controlling heating and
cooling. Now, sensors can track tenants throughout the building
to help owners and managers monitor a building’s envelope in new
and tenant-centric ways.
Smart building technology also provides advanced interpreta-
tion and analysis of data to give building owners and business
owners information on how to improve workforce productivity.
OETs allow for increased productivity by freeing up a
COMMERCIAL INVESTMENT REAL ESTATE
by Daniel Levison, CCIM, SIOR