For the last decade, the global commercial real estate market has been steeped in a period of rapid transformation.
One of the areas of biggest change is technology. How can new technological solutions empower property managers, facilities and operations managers, asset managers, and digital innovators? How do CRE professionals upgrade their systems to better manage and improve properties, increase asset value, and offer higher levels of customer service?
What is PropTech in Commercial Real Estate?
Enter ‘proptech’, or ‘property technology’. Proptech is the umbrella term covering all of the different technological solutions designed to meet the needs of CRE professionals and customers. The technology might come in the form of a smartphone or desktop app, or a piece of purpose-built hardware (such as a bluetooth sensor).
What Categories fall under PropTech?
The proptech category is massive, covering solutions such as:
- Building management software
- Work request or maintenance management platforms
- Tenant experience platforms
- Leasing management software
- Brokerage software
- Data and analytics software
- E-commerce software
- Flexible space booking software
- Marketing software
The list goes on and on. And in 2021, thanks to the COVID-19 pandemic, it’s very likely that this category will only grow.
Consider recent research from Deloitte: In its 2021 Commercial Real Estate Outlook report, it predicts a massive rise in technological adoption among CRE owners. Similarly, KPMG’s Global PropTech Survey reports that 58% of respondents “have already embraced some digital innovations”. Interestingly, however, both reports indicate that CRE owners are struggling with the logistics of transformation. For example, 40% of respondents to KPMG’s survey said that digital is not a priority yet, and that the main challenges of adoption “include the lack of skilled in-house specialists to implement real estate tech solutions into practice”.
This is a temporary roadblock. Over the next year, we will likely see new solutions pop up in aims to solve specific and long-standing problems, and simplifying adoption will be one of them. In the near future, owners will create tailored solutions for their assets by bundling different products and services together.
Stats on Proptech and its growth
According to byteant.com, proptech is growing fastest in the US, where 59.7% of proptech companies reside (compared with 27.2% in Europe, the next biggest segment). New York is the centre for proptech, it seems – according to Unissu data, 323 proptech firms are headquartered in New York, with 252 in San Francisco and 87 in Boston.
Of all of the problems proptech firms help to solve for owners, those relating to building management (58%), data management, security and privacy (54%), and customer experience (48%) are the most common. It’s likely that you’re here, now, because you know Equiem provides solutions for all of these challenge areas (and more).
What’s coming next for proptech?
As mentioned above, the growth and consolidation of proptech has been brought forward by the COVID-19 pandemic. So, in the next few years, we can expect to see innovations in the following areas:
- Artificial intelligence, and the automation of building operations systems
- Smart building technology solutions, such as those measuring CO2 concentration and building occupancy
- ESG-related solutions
- Space-as-a-Service platforms, enabling new leasing arrangements between owners and hybrid-working tenants
- The proliferation of IoT systems