Summary: Every industry has adapted to technology. In commercial real estate development, as in many other industries, the effects of technology are wide-ranging. These innovations have played a vital impact in commercial real estate development and property development overall.
The way we communicate, order products online, power our homes and offices, and even how we drive are all being changed by technology (or have our cars drive for us). It advances at a dizzying speed. The number of inventions and ideas that have the potential to change our lives in ways we could not have ever dreamed of a few short years ago is endless, including artificial intelligence and nanosensors.
And because to the introduction of technology, virtually every area of the economy has undergone transformation. Like many other areas of the economy, we are only just beginning to understand the full extent of how technology is affecting the development of commercial real estate. Due to recent technological advancements, we are always changing, adapting, and improving how we conduct business and create properties.
We wanted to look at three other technical developments that are influencing real estate growth in addition to the broad, encompassing ones like smartphones, cloud storage, and improved communication apps.
- Establishing The Ideal Information Age
Data. The value of data in the modern real estate market cannot be overstated. Technology has widened the data floodgates. As Helen Thompson of Esri recently observed, “Data is typically looked at as peripheral to the business, as lubrication for the wheels, but it is the gasoline for the car.” Developers now have better access to market information, site information, income assumptions, and a wide range of other data, thanks to the quick expansion of research and analytics programs like CoStar, Real Capital Analytics, and Reis.
Furthermore, open data projects are ushering in the information era. Anyone who genuinely wants to find information can find a ton of it. Today’s real estate professionals have access to enough information to help them make the best decisions, whether that information is obtained openly and freely online or through analytical software tools. Additionally, the real estate markets are becoming considerably more transparent thanks to these open data. Many websites collect information on availability, prices for purchasing and selling, and much more, which has reduced margins everywhere.
- Making Everything More Compact
Self-driving vehicles are already here, whether you’ve seen them on the road in all their whirling sensor glory or heard about Google, Uber, or Tesla’s research into the technology. And they’re also going to take over the roadways. A report published in June 2016 by IHS predicted that by 2035, approximately 76 million self-driving cars would have been sold worldwide.
In other words, as this technology advances, it will significantly impact how and where humans evolve. As we’ve mentioned before, tertiary markets and suburbia are experiencing population growth because they are more affordable, have more space, and appeal to those looking to start families. Additionally, autonomous vehicles give up a world of opportunity for those seeking suburban living while still being able to work in urban centers and be productive.
A Morgan Stanley study estimates that Americans spend almost 75 billion hours each year driving. According to the same analysis, the productivity benefits would be worth $507 billion yearly in the United States. Self-driving cars will provide commuters with the much-needed time they once lost since, as the saying goes, time is money.
This will affect development in various ways, from the kinds of buildings and parking garages built or not built in city centers to the quantity of development that will rise in peripheral markets to accommodate population growth.
- Boosting Sustainability
Environmental concerns and initiatives to increase overall energy efficiency have drawn more and more attention in recent years. Companies are aware of this; by 2018, the U.S. Department of Labor estimates that green buildings will create 1.1 million employment and $75.6 billion in salaries. Council for green buildings. And modern technology makes it feasible to design “smarter,” “greener,” and more sustainable structures.
This means that while developing commercial real estate, property technology that can aid in reducing energy use, increasing water retention, and improving the effectiveness of heating and cooling systems must be considered. It entails the use of eco-friendly building techniques, low-emittance windows, and smart glass. Commercial real estate developers can boost building sustainability by utilizing new technologies like cool roofs, which reflect heat and sunlight.
Even what we now consider basic features, like energy-efficient, automated lighting, and appliances, are becoming standard in many new constructions. Commercial real estate development—and all other types of property development, for that matter—has benefited greatly from and will continue to benefit from these pervasive developments.
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