The commercial real estate industry has significantly transformed in recent years thanks to technological advancements and necessity. Property technology, or proptech, is one such advancement, and it has emerged as a game-changer, revolutionizing commercial real estate operations.
The integration of proptech has streamlined processes and brought unprecedented efficiency and transparency to commercial real estate operations. It has also empowered industry professionals to embrace data-driven decision-making and leverage innovative solutions for enhanced productivity and profitability.
While it is easy to understand the initial impact of proptech on the commercial real estate (CRE) industry, peripheral industries, and individual CRE professionals may struggle to understand how emerging tech fits into their business strategy.
In this article, we will explore the role of property technology (prop + tech) in the commercial real estate landscape and how CRE professionals can leverage it to optimize their business.
What is Proptech?
Proptech refers to using technology and technical innovations in the real estate sector to make operations more efficient. It encompasses a wide range of technological solutions and platforms that address various aspects of the real estate industry, including property management, leasing, sales, construction, and more.
The following are examples of proptech currently used in commercial real estate:
Smart building management systems: These systems use Internet of Things (IoT) sensors along with data analytics to optimize building operations. They monitor and control various elements such as energy consumption, HVAC systems, lighting, and security, resulting in cost savings, improved sustainability, and enhanced occupant comfort.
Virtual and augmented reality (VR/AR): VR/AR technologies enable immersive virtual tours, allowing potential tenants and investors to explore properties remotely. This saves time and resources by eliminating the need for physical site visits and helps stakeholders make informed decisions. While this tech existed pre-pandemic, it became more widely used due to the covid crisis of 2020-22.
Property management software: These platforms automate and streamline property management tasks, including rent collection, maintenance requests, lease management, and accounting. Property managers can efficiently handle their portfolios by centralizing data and providing real-time insights, improving tenant satisfaction and operational efficiency.
Online real estate marketplaces: These platforms connect buyers, sellers, and investors, facilitating the listing and searching of commercial properties. Online marketplaces simplify the process of property transactions, increase market transparency, and expand access to a broader range of opportunities.
Proptech examples for real estate agents, leasing agents, and brokers:
CRM platforms help agents and brokers manage client relationships, track leads, and streamline communication. This type of proptech can be used for managing B2C (tenants, investors, buyers) and B2B (builders, service providers, suppliers, etc.) in CRE.
Virtual tour software enables agents to showcase properties remotely and provide immersive 3D virtual tours to potential clients.
Online listing platforms allow agents and brokers to efficiently market properties, reach a wider audience, and connect with potential tenants or buyers.
Examples of proptech for building management
Smart building management systems use IoT sensors and data analytics to optimize building operations, monitor energy usage, improve maintenance efficiency, and enhance occupant comfort. Deemed "the smartest building in the world," The Edge in Amsterdam recognizes when workers arrive to work, and it adjusts temperatures and lighting to individual preference.
Maintenance management software streamline work orders, automate preventive maintenance tasks, and track maintenance history, ensuring efficient facility management. The Ankara City Hospital in Turkey is a great example of a large hospital system that integrated proptech. It is one of the largest hospital systems in the world with 4,000 beds, 22 subsystems and 800,000 data points. Their smart proptech, a "single integrated building management platform," allows them to lower the risk of infection, efficiently maintain medical equipment, improve energy usage and serve patients better.
Tenant engagement platforms enhance communication between building managers and tenants, providing a centralized platform for service requests, event notifications, and community-building initiatives. An example of this can be seen in Dallas, Texas, and the AMLI Fountain Place apartment building, which has used proptech to reduce the building's carbon output, which reduces costs of living for its residents.
Proptech and sustainability
Proptech and sustainability go hand in hand. Many of today's modern buildings use proptech to reduce their carbon footprints, reduce energy usage, and provide better air and living quality for tenants and visitors.
Here are three examples of the marriage between proptech and sustainability:
Energy management systems (EMS) monitor and optimize energy consumption, identify energy-saving opportunities, and promote sustainable practices in buildings. They're common in hotels, hospitals, and large office and mixed-use buildings.
Waste management solutions employ smart sensors and data analytics to optimize waste collection schedules, reduce landfill waste, and enhance recycling efforts.
Green building certification tools like LEED (Leadership in Energy and Environmental Design) and BREEAM (Building Research Establishment Environmental Assessment Method) facilitate the certification process, encouraging the construction and operation of sustainable buildings.
Proptech has revolutionized the commercial real estate industry, providing innovative solutions to improve operational efficiency, enhance user experiences, and drive growth. By embracing proptech, CRE professionals can unlock new opportunities, and achieve higher levels of success.
Learn more about proptech and CRE with these helpful resources.