The last year and a half since the upheaval resulting from COVID-19 has turned many assumptions about the commercial real estate arena upside down. In response, proptech innovation has gained ground to help commercial real estate professionals and their clients. Partner Insights spoke to Jennifer Parker, Director of Revenue and General Manager, Commercial Real Estate Digital, for JPMorgan Chase, about the progress of the industry.
Business Watcher: Why has commercial real estate traditionally been slow to embrace new technology?
Jennifer Parker: Historically, commercial real estate has not prioritized technology investments because they were not seen as a key business driver. In reality, the technology can be a primary business driver, whether through marketing units through social media or through the implementation of smart technology that facilitates access to amenities and other services that enhance the tenant experience. Commercial real estate has always been a relational business where like-minded people come together to network and share their experiences in space. But for commercial real estate leaders to maintain their competitive advantage, they must look beyond their traditional relationships to learn more about emerging technological trends that are transforming the industry and the wider consumer experience.
What is driving this technological transformation in commercial real estate?
Consumer purchasing behavior has changed dramatically over the past 10 years. The pandemic has further fueled consumer expectations that services can be delivered quickly, are easily accessible, and are available 24/7. These behavioral changes are prevalent across all industries, so it’s no surprise that tenants have different expectations than in previous years. Although commercial real estate has lagged behind in this technological journey, there are many tech players providing software solutions that make life and work more efficient for property managers, investors, developers and many more in the world. real estate ecosystem.
What are some of the most significant disruptions that have had a major impact on commercial real estate?
With travel limited due to the pandemic, work in the industry has moved online and many have had to find new ways to exchange documents, visit properties, move money and collect lease payments. Software companies responded by taking over the day-to-day tasks of commercial real estate, and these solutions kept the business going. These solutions have also helped improve operational efficiency and provide a better customer experience. Many of these solutions are here to stay and can help commercial real estate leaders stay competitive, delight their customers, and drive innovation forward.
How did proptech help alleviate the key tasks and responsibilities of property management?
Proptech – which can include everything from apps and websites for real estate research on hardware like motion sensors, smart home computers and drones for building inspections – is transforming the industry. Proptech solutions can dramatically reduce the time and effort required to complete simple tasks, including collecting rent through automation and booking meeting space online. In addition, the more data collected about a customer, the easier it is to understand their needs. For example, an automated booking solution that collects user data can provide insight into user wants and needs, so managers can provide more organized services and improve retention. By relying on technology to perform day-to-day tasks, you have more time for strategic and creative efforts.
What additional technological innovations do you think CRE will see in the years to come?
The primary roles of the business broker, appraiser, and others could change dramatically over time. I think we’ll see artificial intelligence play a leading role in reducing operating expenses at the property and enterprise level, and allowing attention to be redirected to other areas.
In addition, the pandemic has accelerated trends already in play, such as working from home. As companies allow employees to continue working virtually to some extent, developers will need to ensure that workplaces include aesthetic and highly functional spaces. This will drive the need for more advanced digital capabilities and adaptability throughout that space for recreational use during non-working hours.
Thanks to these advances, it will be possible to better exploit data to develop businesses. We will likely see more technologies aggregating demographic trends and allowing sophisticated investors to make quick decisions with better visibility into which deals meet their criteria.
Through the evolution of innovation in commercial real estate, what are the best approaches and methodologies to ensure that customers are at the center of everything that is done? What can we implement?
As innovation evolves, the requirements of residents and tenants will continue to change, meaning commercial real estate executives will need to identify ways to gain a deep understanding of the experience residents desire through technology. Everything from technological connectivity to safety and security will be important to the customer. Software companies can provide a personalized customer experience and provide commercial real estate executives with information to help meet customer expectations. One of the best approaches is to relentlessly research what customers want and then meet that need by providing easy-to-use, time-saving technologies. This can lead to a strong acquisition of new customers as well as a strong retention over the years. Providing a solid user experience offers a substantial competitive advantage.