3 Ways Technology is Impacting Commercial Real Estate

May 22, 2017

8:30 pm

Back in 2010, I was working in a financial role and looking for an office for my company. I realized, from the consumer’s perspective, that my options for finding one were limited. The commercial real estate industry was completely segmented, with brokers and landlords holding all the information, and thus, the power.

After consulting with my two friends in the industry — my cofounders Jonathan and Justin — everyone confirmed my sentiment: commercial real estate was tech-averse and disjointed. In response, we launched TheSquareFoot as an office listing platform, and later became a brokerage to help clients secure deals.

When technological advances and information being more available to the consumer there are a few significant trends to be aware of when you are considering an office space for your startup.

The Sharing Economy Will Continue to Grow

The startup craze has ignited a fire in office sharing. In 2015, devoted coworking spaces like The Yard and WeWork became increasingly popular, and so did other options for coworking: desk-sharing via PivotDesk, office spaces by the hour through sites like Breather, and space rental for events through Splacer.

Read our coverage about startup activity at WeWork

Young companies don’t have the resources to lease an entire office but might consider renting out a few desks or a place in a coworking space for the interim. For well-established companies, take advantage of this demand by leasing out unused space. Not only will this counterbalance costs, but it will also encourage collaboration beyond the confines of your business.

Chicago coworking SPACE

SPACE Coworking, Chicago

The Demand for the Internet of Things (IoT) 

As the workplace decentralizes, the need for transparent information about different locations grows. With IoT connectivity, monitoring and managing this information becomes simple because it allows an administrator to view and manage all this information about every location, from anywhere in the world. For a tech startup, having the ability to monitor their office from afar or IoT enabled amenities will be an appealing quality.

For developers of IoT technology, commercial real estate is the perfect industry to tackle because it can entertain enterprise-level contracts, and many businesses are technologically inept.

While the demand for IoT will increase, it will likely not become commonplace right away due to buildings unable to support it. There are some simple IoT technologies that don’t require extra credentials, but if startups want to go full high-tech, they’ll have to find a special property and pay a premium.

VR and AR in Real Estate

With the advancement in virtual reality and augmented reality, potential customers will be able to take remote office tours, plan an office redesigns and have a greater understanding of architectural concepts.

Commercial broker houses and businesses should care about the convergence of VR into office leasing and begin to request VR and AR mockups because it means greater and more realistic foresight into offices in the future, which will allow these businesses to effectively map out the trajectory of their in-office growth. For example, Sage Realty Corp. has been offering VR tours for a building currently under renovation, which won’t be ready for physical tours until later this year.

For the customer, having the option of augmented reality tours can help them imagine being in their office and watching it morph into a design concept right before their eyes. Being able to visualize things through a 3D headset will allow the viewer to imagine the transition and not just the final product.

Technology will continue to have a huge impact on commercial real estate and the office leasing process. Even as the coworking concept grows, technology will be there to help it grow faster. For startups considering moving into a new office, take into account these trends. By encouraging more connectivity between people, objects and visualizations, you will ultimately make your business stronger.

Read more about real estate tech at Tech.Co.

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Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world's most promising young entrepreneurs. YEC members generate billions of dollars in revenue and have created tens of thousands of jobs.

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