The COVID-19 pandemic forced almost every sector to reinvent itself. The commercial real estate sector is no different. Historically, the real estate industry is not the quickest to adopt new technology. However, lockdowns forced employees to work remotely, which meant greater adoption of digital tools. The accelerated shift to digital, aided by the growth of tech-focused startups in the space, will probably push companies to leverage data for better efficiency. Here are 4 key commercial real estate trends that will shape the industry in 2021.
1. Robotic process automation (RPA) for more efficiency
Digital transformation lies at the forefront of technology trends in the commercial real estate sector. The shift has been coming for some time, especially with new tech-focused players entering the market. However, the COVID-19 pandemic has accelerated the trend towards making processes more efficient and less labor-intensive.
A remote workforce and a dip in demand are two factors that are contributing to this acceleration in digital adoption. We expect more real estate management companies to adopt robotic process automation (RPA) in 2021.
What is RPA?
It is the use of software, or bots, to automate routine clerical tasks that do not involve high-level decision making. For example, standardizing contracts and liaising between multiple vendors for signatures and approvals. Data collection on buyers and sellers, data maintenance, and data compliance reporting are other common examples of clerical tasks that can be automated with the help of bots.
How is RPA useful?
There are three key advantages of RPA in the commercial real estate (CRE) sector:
- It is more cost-efficient. Companies that have adopted RPA have seen a reduction in their operational costs by 10 to 40 percent.
- RPA frees up employees for higher-value tasks, such as directly engaging with prospective buyers and sellers. This increases the chances of more deal-closures, hence directly contributing to a company’s revenue.
- It substantially lowers the risk of human error, making data more reliable. In turns, it makes data compliance easier.
2. Predictive analytics for better decision-making
The commercial real estate industry sits on a treasure trove of data. This data, when mined efficiently, can offer important insights into sales trends, demographic trends, and buying and selling forecasts. In 2020, data centralization, a key requirement for effective data analytics, accounted for 40% of all tech investment in commercial real estate. The number will increase in 2021 as real estate management companies cut risks and find better market opportunities.
What is predictive analytics?
It is the science of using historical data to predict future outcomes. For example, a commercial tenant’s financial reports can tell a broker if the firm will renew the lease or not. ProspectNow uses predictive analytics to help brokers identify off-market properties that are predicted to sell.
How is predictive analytics useful?
There are several use-cases of predictive analytics in commercial real estate, such as:
- Identifying the right time to invest
- Predicting return on investment
- Identifying commercial real estate markets that hold potential for future growth
- Allowing brokers to pitch the best retail spots to companies based on consumer behavior.
3. Virtual tours in a socially distanced world
The COVID-19 pandemic in 2020 forced governments around the world to implement social distancing regulations. As a socially distanced lifestyle becomes the new normal, the trend of virtual property tours is likely to be on the rise in 2021. The pandemic has also forced the older generation to come to grips with technology. As the baby-boomers become more comfortable with digital interactions, augmented reality will become more commonplace in the real estate market.
What are virtual tours?
Several platforms, such as EyeSpy 360, allow brokers to create virtual tours of properties that prospective buyers can watch on their devices.
How are virtual tours useful?
Given that the threat of COVID-19 is still very real, virtual tours limit the risk of infection. It also makes the real estate market safer for agents, particularly female brokers. According to a 2018 report by the National Association of Realtors, over 40% female brokers feared for their safety or the safety of their personal information.
The virtual tours space, itself, is likely to evolve, thanks to startups such as Guided Virtual Tours. The company gives a tour of properties just like an actual agent, unlike traditional virtual tour platforms where users have to click at different points to travel through the property.
4. Cloud for scalable digital experiences
As the COVID-19 pandemic hit, companies quickly moved to online channels to engage workforce and tenants. However, over 50% CRE companies that took part in a 2021 CRE survey said they lack digital capabilities to fully utilize tools and data at their disposal. A majority agreed digital tenant experience is important for their company’s growth and revenues.
As companies try to minimize costs to deal with an economic downturn, cloud technology could see an increased adoption rate among CRE companies.
What are digital tenant experiences?
Digital payments and predictive insights into consumer behavior for tenants, are two primary examples of digital tenant experiences. An AI-enabled chatbot that helps commercial tenants with common queries could be another example of a digital tenant experience.
How is cloud technology helpful in enhancing digital tenant experiences?
Cloud technology offers a scalable, more cost-effective method to enhance digital capabilities. Companies don’t need to invest in servers or an extensive IT team to offer digital solutions to clients. Cloud also eases collaborative processes, making it easier for a remote workforce to share data and insights. People have become more receptive to telecommuting, thanks to the pandemic which means there is a greater likelihood of more CRE companies including cloud solutions in their digital repertoire.
Use Data to Close More Deals
In an uncertain economic environment, it is prudent to minimize risks. Thanks to modern technology, you can use data to identify lucrative buying opportunities. ProspectNow gives you predictive insights into properties that are most likely to sell, and accurate information on owners. Get a leg-up over your competition. Try ProspectNow for free.