Commercial Real Estate PropTech Hits ‘Tipping Point’
Commercial real estate is at a “tipping point” as PropTech adoption reaches a critical mass, reported Altus Group Limited, Toronto.
Altus Group has surveyed 400 commercial real estate executives worldwide annually for the last five years. For the first time, it found most CRE executives now fully recognize Proptech’s disruptive impact and acknowledge many advanced technologies can potentially solve their current challenges.
“Commercial real estate continues to rapidly accelerate its digital transformation and despite the growing complexity stemming from the proliferation of data, the industry is clearly shifting from a stage of trial and testing to one of practical innovation to solve their current challenges,” said Altus Group CEO Bob Courteau.
Courteau predicted continued automation and significant PropTech consolidation will deliver “considerable opportunities” for the industry.
A significant majority of commercial real estate executives–75 percent–predicted automation will eliminate some jobs. But counter-balancing this was the view that automation also presents an opportunity to introduce new types of jobs within the industry (71 percent) and shift jobs toward higher value-add tasks (67 percent). “While commercial real estate leaders recognize both the impact on jobs and the short-term productivity benefits that automation can deliver, a major challenge is to anticipate how it shapes the future of the commercial real estate workforce,” the report said.
Nearly half of commercial real estate teams said they spend at least 15 percent and up to 25 percent of their time managing and organizing data–equivalent to two to three months of the year, Altus Group said, noting eight of 10 commercial real estate firms now have a Chief Data Officer or equivalent senior executive to oversee its data strategy and data governance. As recently as 2016, only 56 percent had an executive in that role, the report said.
The report said online marketplace platforms have gained significant traction, with 61 percent of CRE leaders predicting these platforms will significantly affect the industry. Recent years have seen new marketplaces connect a broad network of market participants such as buyers and sellers, tenants and landlords, lenders and borrowers and investors and fund managers. So far, lending platforms have seen the most adoption; 63 percent of commercial real estate firms said they have used an online lending marketplace for a recent transaction and 79 percent reported they plan to increase their future use.