A lot has been said about the increasing role of technology in our lives. It’s not surprising to hear that more people use cell phones around the world than use a toothbrush, or that 90 percent of the data created in all of human history has been created in the past two years alone. And while the buzzwords “sharing economy,” “disruptive power” and “democratization of information” have been bandied about at dizzying rates, they are also indicative of how technology has forever changed entire industries.
But where does real estate stand in this transformational wave of technology? How is technology changing the way we live and work? How can the real estate industry adapt to capture this disruptive force?
I think there are two main categories to frame how we can think about the role of technology in real estate.
The first is from a cultural standpoint: our expectations about the modern office have changed and demand for efficient and sustainable space has risen.
The other is how real estate professionals can use technology to enhance business by capturing dynamic data, connecting people and space, and identifying trends in real time. It’s the latter that has the potential to truly disrupt the industry.
If we look at the first phenomenon, it’s been obvious for some time that cubicles are a thing of the past. However, many experts believe that the open workspace has been overdone. The future of work is about choice – an ecosystem of places and activity-based space. In other words, because people spend more time at work than at home, it is important for them to have functional spaces and the flexibility to work both collaboratively and individually. The work space must serve this need and is something office developers will have to adapt to in contemplating tenant demand.
The increased use of data analytics also poses a challenge for the real estate industry. The days of reading quarterly broker reports to do market analyses will soon be gone. Companies like Compstak and Hightower want to use big data to deliver immediate and structured information that will result in real-time, dynamic analyses – so much so that some believe that buildings could eventually be traded like stocks, bringing significant transparency to the industry and completely changing how we evaluate real estate transactions.
It’s an exciting time to be a real estate professional. Changing preferences and technologies are creating flexible, functional workspaces and will change how we think about real estate as a broader asset class. Disruption breeds opportunity, and technology will continue to leave its mark on the real estate industry.
By Jonathan Lim (MBA ’16)
Jonathan’s video won a video contest sponsored by the Urban Land Institute (ULI) on the topic of how technology can disrupt the real estate industry.