How Disruptive Technology Is Changing CRE
"Tech is no longer a buzzword in commercial real estate. It’s becoming a staple, foundational and embedded,” said Bob Sulentic, president and CEO of CBRE. As the largest property services firm in the world, the company has been investing heavily in technology in recent years, including a suite of enablement technologies called Vantage, which provides automation, visualization, data analytics and other capabilities for various stages of the real estate lifecycle.
However, there has been a flood of new real estate technology startups entering the market in recent years, with a huge amount of investment capital flowing in with them, as everyone recognizes the potential for disruption within our industry. These new startups are changing how we think about space, with the ever-growing space-as-a-service offering as just one example. They’re also bringing new digital approaches into the industry with a big focus on the user experience and open integrations. The large influx of investment money is accelerating the innovation curve, and is forcing legacy suppliers to re-evaluate how they serve the real estate industry. Several promising technology trends are also making this possible.
Integrating and aggregating data from building operations is one area that has historically suffered from inefficiency. It is challenging to leverage portfolio assets and data intelligence to proactively problem solve and avoid the day-to-day issues that cost more in the long run. CBRE is able to uniquely collect and leverage big data in ways that not many other property firms can. We are also constantly looking for new technologies, and are able to apply those solutions and scale them quickly. Sulentic touched on this in his 2018 keynote at Realcomm | IBcon, stating: “We manage five billion square feet of space around the world. We have a lot of information about what goes on in those buildings and what the users of those buildings want. We’re in a position today where we can buy technology companies and integrate them smoothly into our business.”
Artificial Intelligence (AI)
AI is the most important technology for augmenting and supporting the future of work, and those that are ahead of this trend can be early disruptors. AI can provide insights and real-time information based on building data. Consider using data to proactively predict asset failure, allowing a more efficient use of capital spending. Or, using data to optimize technician routes, more quickly satisfying customers and reducing the amount of wasteful drive time between buildings.
AI can help automate manual and redundant tasks, performing them faster and more accurately, which yields a better foundation for decision making. Adoption of AI, however, has room for improvement in the world of real estate. In a recent, informal survey of industry participants conducted last year, one third of respondents indicated that they were planning or had rolled out an AI project. This year, that number increased, as half of the respondents indicated that they were doing so. While the increase is significant, it still lags behind the 60-80% AI pilot/adoption rate in industries outside of commercial real estate.
Mobile Applications & Workplace Experience
With the broad-based acceptance and accessibility of mobile applications, employee- and tenant-based experience apps are becoming more prevalent and sophisticated. For example, the organization's experience services offering – CBRE 360 – provides a range of occupier and tenant services through a mobile application. Many companies are looking to these apps as a channel to consolidate the various technology point solutions and also embrace the personalization of workspace. The near ubiquity of mobile technology coupled with the convergence of Internet of Things (IoT) capabilities and AI has made it possible to track, compile and assess employees’ work-day preferences for things like amenities, services, work stations, conference rooms, parking, commuting and room temperature.
As a recent example, a global technology firm wanted to improve the health and well-being of its employees. After working with the client to understand their employees’ preferences, we developed a menu of wellness elements, allowing flexible deployment for different office locations, occupants and budgets. These ranged from creating walking meeting maps, rewarding and encouraging healthy eating choices, increasing employee convenience services (which are funded by individuals), introducing cookery classes to workplace kitchens and even having fresh, local produce delivered to offices. We also implemented higher-cost programs such as fresh juice bars, massage chairs, nap pods, loan bikes and relaxation spaces. By understanding and planning around workplace preferences, we were able to customize an experience that enabled better employee engagement.
Smart Buildings & IoT
Advancements in AI and mobile technology are finally fulfilling the “smart building” promise. For an industry that has historically lagged in technology uptake, and one where the promise of an IoT-based smart building has been more promise than reality, the recent rise in interest and adoption is notable. With a greater availability of domain-specific cloud solutions, the plummeting costs of sensors, the growing capabilities of edge devices, the broader move to an IoT subscription model and an increased focus on the personalized experience, the ability to deliver a true smart building is very real. Competition from real estate technology startups has accelerated progress, as new industry participants apply innovative tech solutions to well-known industry challenges.
As a recent example of the opportunities that smart buildings offer, a global professional services firm engaged us to structure services to respond to predictive outcomes within a building, utilizing building monitoring information and workplace occupancy within the building to improve the customer experience. We are testing the deployment on new technology for power generation and investing in this based on the proposed outcomes. The potential offering is beyond any currently available in the marketplace.
While much progress has been made, broad and integrated IoT ecosystems can be difficult and expensive to achieve. Many point solutions must be integrated, and an abundant of challenges exist in the application of consistent security requirements.
While the speed and volume of technologies in commercial real estate is increasing, the successful application and translation to client value is not. Although there are exciting opportunities in the marketplace for new-age technology solutions – including data integrations, AI, mobile apps and smart buildings – they must be produced and applied in a manner that is secure, financially viable and better quality than previous approaches.
This Week’s Sponsor
CBRE, a Fortune 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm based on 2017 revenue. It employs 80,000 people and serves real estate investors and occupiers through approximately 450 offices worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
The World's #1 Conference on Corporate Real Estate, Facilities,
Technology & Innovation is Returning to Silicon Valley!
Join the most innovative Corporate Real Estate and Facilities executives from companies such as Google, Exxon Mobil, JLL, Intel, McKesson, LinkedIn, American Express, Salesforce, Wells Fargo, CBRE and many others, as they gather to discover, discuss and debate how technology, automation and innovation will continue to impact the next generation of how we use and operate corporate facilities.
Watch this brief video and learn more!
UPCOMING REALCOMM WEBINARS
A Path to Net Zero – Driving ENERGY EFFICIENCY in Smart Buildings - 7/18/2019
One of the first trends to emerge in the modern smart building movement was energy conservation and efficiency. Approximately eight years ago, the industry realized that connecting energy related equipment to a network and applying advanced analytics and complex integration strategies could result in a significant reduction in energy and natural resource consumption and a resultant decrease in energy related expenses. In recent years, operational efficiency and occupant experience have been added to the smart building discussion, sometimes overshadowing energy efficiency. This webinar will focus on the very important goal of including energy efficiency in the comprehensive smart building strategy.
Ruairi is a respected high-performance building design expert. His aim is to elevate the built environment and restore order to the climate for future generations. He specializes in commissioning services for new and existing buildings, building energy assessments, high performance building design, energy modeling/advanced building simulation, and measurement and verification consulting.
Sarah currently serves as a Senior Advisor for the U.S. Department Building Technology Office where she leads commercial zero energy efforts, district-scale solutions, and a pSarah currently serves as a Senior Advisor for the U.S. Department Building Technology Office where she leads commercial zero energy efforts, district-scale solutions, and a portfolio of data infrastructure projects. In previous roles at DOE, Sarah led local government clean energy innovation programs. Sarah has over 15 years of experience in sustainability and energy work. Before DOE, Sarah worked for Baltimore City where she helped establish their Office of Sustainability.
Ryan Knudson, is the AVP for Operations and Energy Management at Macerich. He is responsible for the development, execution and operations for all Capital Expense Energy and Smart Building projects as well as national program vendor management. He oversees the daily operations of Macerich’s portfolio with a focus on same center NOI growth.
Akshai Rao, a vice president at Yardi, is responsible for the development of procurement and energy management solutions to ensure high-performing buildings. Prior to Yardi, Akshai spent five years at Bain & Company where he focused on technology and telecom.
Jean-Simon Venne is a tech expert who thrives on developing and implementing new technology to solve long-standing commercial issues. He has over 25 years of experience in the fields of telecommunications, biotechnology and energy-efficiency specializing in the fast and efficient migration of technological innovations to commercial applications. With an industrial engineering background, Jean-Simon is uniquely trained to optimize the value creation opportunity that exists where new technology intersects with business and energy markets.
Gary Fescine FMA, RPA is the president of GFC his own consulting firm. He has recently retired from BlackRock where he was global director of facilities, building operations, overseeing 77 sites in 23 countries. He has held a number of related positions including director of facilities at The New York Times and director of operations at the New York Post. Mr. Fescine was the recipient of several energy savings awards including the Energy New York Award in 2017.