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How to Navigate Technology Innovation in Commercial Real Estate
As the world evolves, so does the technology that we use to operate within it, and commercial real estate (CRE) is no exception. With the introduction of artificial intelligence (AI) and smart technology into the world of commercial real estate, there has been a shift in the way that businesses and investors alike approach their commercial properties.
In this blog post, we will explore the ways the impact that new technology has had on the commercial real estate space as well as consider the changes that may be incoming as technology continues to advance.
Currently in Commercial Real Estate
Currently, the CRE industry is facing a challenging market. The global pandemic has caused a shift in the way that businesses operate, with many companies moving towards remote work. As a result, the demand for office space has decreased, and the need for alternative uses of commercial real estate has increased. However, this challenge also presents an opportunity for businesses to set themselves apart through the use of smart technology as a tool for maximizing profits, selling or leasing their properties, and enticing potential employees with access to innovative workplace tech.
Staying On Top of the Tech Trends
The commercial real estate (CRE) industry is rapidly changing, and staying on top of technology trends is critical for professionals to remain competitive. The use of property technology (proptech) is becoming increasingly important as companies aim to boost efficiency and reduce costs. Proptech involves the use of automated services, access control systems, and smart devices to improve basic building functions. This type of new technology is also important to increase efficiency by reducing tedious tasks, and opening up your teams to focus on the work that really matters. There are all sorts of proptech trends becoming more prevalent in the world of CRE lately, including virtual reality tours, artificial intelligence for performance, clean tech for energy efficiency, and smart technology and security. The adoption of these trends can help professionals in CRE shape their real estate endeavors and set themselves apart from competitors.
Keep Moving Forward
While the past several years have seen a rise in tech such as virtual 3D tours of commercial properties, the coming years will likely only see the push for innovative technology in CRE grow. If you are considering investing in smart technology for your business, here are a few ways to get started:
3 Ways that Tech Can Streamline CRE Operations
- Going paperless with automation is another crucial investment must. Providing a mechanism to digitally store signed documents and automating invoicing and payments through an automated clearing house (ACH) allows CRE management teams to stay on track with tenant payments and annual increases.
- Artificial Intelligence (AI) is another rising technology that can be used in many different ways, from monitoring building security and temperature control, to automating the process of generating leads and collecting applications.
- Tenant management portals and reporting and business intelligence through data are other technologies that CRE owners should invest in to provide tenant transparency, increase bottom-line results, and maximize annual rent increases while minimizing losses due to local market changes.
Why Does Tech Matter for CRE?
Prioritizing innovative technology allows commercial real estate businesses, and often their tenants as well, to operate more efficiently and effectively. By using AI and smart technology, businesses can reduce costs, increase productivity, and improve the tenant experience. As technology continues to evolve, there will be even more opportunities for businesses to innovate and improve within the CRE industry.
If you need a partner who understands the intricacies of commercial real estate – as well as the technology that comes along with it – we’d love to serve you. Reach out to our CRE team at Coldwell Banker Elite for a partner that will treat your investments as if they were our own.
3 Questions to Ask Yourself Before Investing in Commercial Real Estate
Committing your time and money to a commercial real estate investment property is a major decision, and for a first-time investor can seem particularly daunting. With so many variables and risk factors to keep in mind, asking the right questions can ensure that you’re taking on a property that will serve your needs and goals the best.
Before Investing in Commercial Real Estate…
First, you’ll want to evaluate your intentions and desires when it comes to investing in commercial real estate. These questions will help not only narrow your search and determine the budget range you should be looking in but will clarify your overall vision for the investment process going forward.
1. How Comfortable Are You With Risk?
This simple question will be hugely important as you’re deciding where and what type of property you’ll invest in. If you’re okay accepting some level of risk, you may be comfortable investing in a more “up and coming” area, whereas if you’d prefer to play it safe, you’ll want to look for more established areas. Similarly, a risk-averse investor may want to consider a more “turn-key” property, whereas if you are excited about potential gain and associated risk, a “fixer-upper” or a property that needs some renovation or remodeling might be a better option with more room for increased value down the line.
2. Are You Looking for a Property to Increase Cash-Flow, or to Appreciate in the Long Term?
Essentially, are you hoping to rent out the property regularly to increase your total money coming in each month, or are you hoping to acquire a property now and resell it at a higher cost later? Each is a valid strategy to make the most of a commercial investment, but it’s important to understand which approach you’ll be taking so that your choice of property is in alignment.
3. What Value do I Bring to the Table as a Commercial Investor?
If you’re looking to make an impact in the world of commercial real estate, it’s important to understand what you have to offer and how you are uniquely suited to build a business around your investment properties. Maybe you can purchase properties in cash, allowing for greater negotiating power and better profit margins. Or maybe you’re highly connected and able to fill a space quickly once you obtain it. Perhaps you can move quickly through the commercial real estate process and make sound, snap decisions.
Whatever it is, you must have a solid handle on what you bring to the table before you ever step foot in a prospective investment property. Taking the extra time to consider your competitive advantage will support your bottom line and your success moving forward as a commercial investor.
Getting Started with Commercial Real Estate Investing
Regardless of your level of experience with commercial real estate investing or the number of properties you own, these essential questions are an excellent litmus test for your business. Keep in mind that the answers may shift over time as the market changes and as your financial and investment goals change, so it’s a good idea to reconsider these three questions from time to time and keep a firm handle on your overall goals and strategy.
The best way to determine the right commercial real estate approach and ensure your investment is the best one for you is to work with a team that knows the commercial real estate market in your area inside and out. If you’re interested in commercial real estate investing in Virginia, contact our team at Coldwell Banker Elite to discuss and strategize for your future commercial property investing. With many years in the local commercial real estate space under our belt, our real estate professionals can take your goals and match them with the ideal investment strategy in the area. Reach out today to get started!
