I recently had the privilege of participating in CoreNet’s Technology Symposium, hosted by CBRE’s Peter Van Emburgh, President of the Mid-Atlantic chapter in Washington, DC, along with Katy Redmond. The theme of the symposium was the “Future of CRE Technology.” Being in the middle of some innovative technology projects at CBRE, this is a topic near and dear to my heart and I was thrilled to be involved. At the symposium, I participated on a panel with some great minds from IBM, Saltmine, IA Interior Architects and Capital One, and there was broad agreement among the panel that IOT, Machine Learning, Blockchain and Augmented/Virtual Reality continue to be the hot topics on innovation in Commercial & Corporate Real Estate Technology (CRETech). Below are some themes we discussed and my views of what this means for our industry.
CRETECH INVESTMENTS AND TRENDS
The real estate technology world, though still behind other industries, has come a long way in recent years. The amount of capital being invested in this space continues to be extraordinary, hitting $3 billion in 2017 across all real estate verticals. That’s on top of the $2.7 billion invested in 2016 and $2 billion in 2015. That’s a lot of money coming into real estate tech and we’re now seeing more and more startups bringing innovative, digitally focused, intuitive, and disruptive products to the industry. It’s still debatable on whether there is too much money being invested in an industry where exits are still rare, but it’s been a great push for moving CRETech into the middle of the digital revolution.
The keynote was given by Steve Weikal, the Head of Industry Relations at MIT Center for Real Estate, who gave a great overview of what he’s seeing from a trend and startup perspective. On some of the broader trends impacting CRETech, the pervasiveness of cloud computing, mobile computing, the explosion of “Big, small and wide data,” and the increasingly tech-savvy CRE workforce stood out and resonated with what I’m seeing. Along with the sharing and on-demand economy, these are all foundational trends that have had positive impacts on CRETech.
From a near-term practical perspective, the Internet of Things (IOT) is finally being broadly adopted and leveraged by real estate and workplace executives. IOT powers many enterprise and consumer products, and for the CRE world the Smart Building concept is not new. It’s been a topic of discussion and attention for over 15 years, but there was always more of a “when” attached to it than reality for most companies. That’s no longer.
The accelerated decrease in sensor prices, the ubiquitous view of mobility, the broad availability of cloud storage and services, and the ongoing adoption and capability of API’s, has resulted in IOT & Smart Buildings becoming ever more pervasive in CRE.
Energy management and related savings were the primary beneficiaries of the initial IOT waves, but we’re now in a world of “experiences” –one where IOT devices are star players. Adding Machine Learning to the mix, you now have the personalization of the experience. From conference room booking to wayfinding, people finding, parking and transportation search and reservations, service requests, community interactions, food or concierge services, IOT enables new ways for employees to interact with their workplaces.
Machine learning is another powerful advancement in the world of CRE tech. When Machine Learning is applied to IOT, the ability to identify and understand how space is utilized magnifies greatly. With a minimal number of sensors, coupled with machine learning, companies can now understand how employees and departments are actually using their space, adopting new working styles and improving the efficiency and effectiveness of their real estate portfolio. The combination of IOT and machine learning also can provide insights into asset performance, event filtering, and service work validation. These are all projects that we’re piloting with our clients with goals to improve performance and increase employee satisfaction.
The value of Machine Learning to the commercial real estate industry is broadly apparent. Its ability to find insights in data are transformational. The big tech companies (Microsoft, Amazon, Google, IBM) have all made huge strides in making machine learning models and approaches more available to a broader audience, “democratizing” the availability and use of machine learning. Related to the workplace experience theme mentioned earlier, we’ve spent time at CBRE applying machine learning to work-order data, enhancing and improving how employees can get what they need to do their job. Whether it’s leveraging text, voice or images, making the employee’s interactions simple, easy and personalized goes a long way towards employee satisfaction. That is something critical in today’s highly competitive fight for top talent.
Usually blockchain in CRE is a topic for a narrow niche group at CRE technology meetups and conferences, but it got much more air time at the symposium than I’ve seen before, which is great. There is no arguing the value that a decentralized, secure, and fully searchable technology like a blockchain can have on the CRE world, but there aren’t many corporate or commercial real estate companies who are prepared to leverage it today. At CBRE, we completed a successful proof-of-concept with a client last year that opened our eyes further to the long-term potential. There are quite a few uses today that are viable in the short-term, particularly around logistics or IOT, but other aspects are many years away. Outside of the U.S., there are governments that are pushing to centralize all real estate transactions on a blockchain, enabled by a lack of available data today and a supportive and centralized regulatory approach. In the U.S., Cook County and other municipalities have piloted title transfers on a blockchain, but broad implementations are yet to come, particularly on the commercial side. Some of the best use cases require multiple organizations to participate, and many aren’t ready. Still, that shouldn’t stop organizations from exploring how it works and its benefits. I’m confident it will be a very disruptive technology over time.
AUGMENTED AND VIRTUAL REALITY
We also spent time on the panel talking about augmented, mixed and virtual reality, and it was agreed that this is a technology that is perfect for real estate and the workplace. Companies like Floored have already blazed the trails in creating innovative, virtual walkthroughs of space, but that’s just the beginning. Augmented reality has a real potential today that isn’t yet fully leveraged. Imagine a building engineer being able to see the work order, warranty or other documentation about a specific asset, just by holding their phone to in front of the asset. With AR being incorporated into the new phones, that’s starting to happen today, improving the time it takes for building engineers to do their work and reducing the time and cost of getting remote support for solving problems.
Since virtual reality is more about being fully immersed in your virtual surroundings, there is a thought that it would supplant the video call, allowing remote works to “feel” like they’re all together. That concept was discussed but there wasn’t a general agreement on its adoption or value. Completely removing the physical nature of human interactions is doubtful, but the current video-meeting experience is not the best either and ripe for disruptive changes.
In summary, we’re in a great time where the advances in CRETech are real and here now, with a bright future ahead for IOT, machine learning, blockchain and augmented reality. These technologies will all make a big impact in the employee experience, and it’s about time.