Let’s face it, our industry is kind of late to the game. We’re set in our ways: either unwilling or unable to embrace new technology. We’re so infatuated with nostalgia for the past that we’re unable to live in the present, let alone strategize for the future. Our traditional methods of business have worked thus far, so what’s the point? As both a media/communications professional and a (self-proclaimed) CRE expert, let me explain why you need to adopt new technologies RIGHT NOW.
You don’t have to be a tech guru to understand the power of Moore’s Law. This observation, which was made by Gordon G. Moore in 1965, states that the number of transistors per integrated circuit will double every 18-24 months – explaining the rapid (and exponential) growth rate of technology. I mean, we were using dial-up internet just yesterday, it seems. These advancements have made information more easily available, relieved us from relying on our memory, and, in many cases, allotted us more free time.
There are three main agents, or drivers, of this change in the CRE industry:
- Millennial infiltration
- M&A Market
Let’s peek at some CRE game-changers influenced by technology:
Yes, I know, this is another tech buzz-word we may not fully understand because it’s been thrown around in so many different ways. Well, there really is no rigorous definition of big data, according to Viktor Mayer-Schonberger and Kenneth Cukier who wrote a book on the subject. Instead, the two data experts outline what big data provides us:
“The ability to harness information in novel ways to produce insights or goods and services of significant value…..things one can do at a large scale that cannot be done at a smaller one, to extract new insights or create new forms of value.”
With such a large mass of information being presented to us daily, it can be hard to separate the important information from the rest.
In a 2015 Innovation Report, Altus Group Ltd. urged CRE firms to increase investment in technology innovation in order to keep business healthy. The report is based on a survey of 300+ CRE global insudtry experts. The report found that one-third of the global CRE industry is still using spreadsheets to manage assets and portfolios, a method prone to inaccuracies. Realty Biz News says the report also shows that nearly 75% of our industry is managing portfolios in ‘data silos’:
“This unconnected approach to managing information and assets, which often requires cumbersome data aggregation from multiple sources, can significantly hamper the timely data-driven decision-making and reporting transparency that investors are increasingly demanding.”
Integrated software solution speeds up the process of collecting and analyzing data from dozens of sources in order to make a timely, informed and strategic investment decision.
For CRE owners and developers, ongoing trends in smart building technology for maintenance and operations are important to keep up with. Not only do new technologies enable companies to identify cost savings and operational efficiency measures, but they can also be used to increase connectivity among various systems and ease communication between management and tenants, according to Deloitte. Connecting building systems, information and communication technology systems, and business systems presents a number of beneficial effects:
- Eases portfolio management
- Offers real-time reporting
- Increases tenant engagement/retention by strengthening the relationships
Other property-specific technology, such as smart sensors, can help developers utilize space more efficiently. In other industries, mobile and social media have been used to enhance employee engagement, as well. Deloitte reported that out of over 1,400 responses to a 2014 poll, nearly 28% of respondents in the real estate realm said they use social media to interact with employees. I can only imagine that number to have grown significantly in the last year.
While we are on the topic of social media, let me note that social networking sites are a HUGE part (or should be) of any CRE company’s marketing strategy. Many old-school marketers in the industry may dismiss the method as ineffective or exclaim that “industry leaders are not on Twitter or Facebook.” They’re wrong. Everyone is on social media, even your mom. Technology that starts off as being consumer-based quickly matures into the business world. Just take a look at Facebook.
B2B companies are no different. As marketing guru Gary Vaynerchuck says, “Behind every B is a C.” Essentially, this means that behind every business is a human making decisions based on their own experiences. Position yourself as an industry expert through a blog (like us), engage with industry leaders or publications via Twitter (or LinkedIn or Facebook etc.) to gain foot-traffic. Don’t just sell your business, entertain the investor, developer or tenants you wish to attract. Build your network, increase your social capital and actual capital will surface.
The first step to closing a deal is to make yourself visible. The next step is to build a relationship. In this highly-connected world, you can’t gain new business if you remain unseen.
Yes, I know change is a little scary. But it’s not all that bad. Technology is a tool, one that is here to assist us, much like a pencil or a hammer. I’m not entirely sure why our industry is so late to the game, but with tech-savy Millennials charging into the industry today with their successful CRE tech startups and business strategies, it’s time you adjust your CRE business mentality.