Last January our CEO, Deb Noller, highlighted the top five CRE Tech megatrends emerging in smart building technology and considered their implications for 2017. The Internet of Things (IoT), facilities management and building automation all evolved at breakneck speed, while the pace of mergers and acquisitions was almost too much to keep up with. At the same time, CRE Tech saw unprecedented investment.
It’s clear the next generation of smart building technology has arrived and savvy enterprises are embracing it for a competitive advantage. As our holiday gift to you we’ve summarized the progress each megatrend experienced in 2017.
The Rise of the Building Technology Evangelist (BTE)
Prediction: Buildings will become more connected and professionals at all organizational levels will acknowledge the need to become more IT savvy. Frustration with outdated systems and processes will drive internal advocacy for more efficient, technological solutions.
Progress: With the wave of new building Internet of Things (BIoT) devices collecting vast amounts of data, enterprises are beginning to invest in smart building technology teams to take advantage of increased building connectivity and emerging software tools to manage portfolios.
Visionary executives are formatting smart building technology change from the top down
Prediction: The C-suite will feel pressure to operate large portfolios more efficiently as early adopter competitors embrace new solutions and garner dramatic results. Leaders will fuel organizational transformation by pushing traditional management teams to explore new technological solutions to old ROI challenges.
Progress: The focus has shifted from “How much did we spend to “How much did we save?” Key executives are empowering sustainability and facilities teams with the latest smart building technology to manage risk, cut operational costs and save energy. Full-service property management firms are opting to acquire or partner with smaller tech companies rather than build tools in-house.
Industry activity is accelerating and it’s an exciting time to be in the mix where billions of dollars of value will be created and/or missed. We can further expect that in a couple of years the term CRE tech will be dead and the industry will absorb technology into its DNA to be software enabled. – Michael Sroka, CEO, Dealpath
Systems will become part of the product and brand identity
Prediction: Commercial real estate operators will begin to leverage the systems they use to strengthen their brand reputation, provide an exceptional occupant experience and attract top talent.
Progress: Tenant-centric business models are springing up around the globe. Brands are gaining recognition and appeal for their tech-enabled spaces, sustainable practices and comfortable environments, particularly from the up and coming millennial workforce. Founded in 2011, WeWork has redefined the way occupants experience buildings by implementing a tenant-centric business model. To date, they’ve raised nearly $10 billion, creating a significant disruption for competitors like Regus, Impact Hub, and Galvanize.
If you’re serving a true need, and if you have a loyal group of customers…As the world goes through a tough time, these customers will stay with you. – Adam Neumann, CEO, WeWork
Emergence of centralized control & command
Prediction: Labor costs are rising and it’s no longer cost-effective to have an onsite facilities management team in each building. The industry will begin to centralize building management and control, requiring fewer people onsite.
Progress: Many REITs and property management firms have established central offices where energy managers, sustainability professionals and facilities teams can leverage technology to remotely manage their entire portfolios. For example, Microsoft formed a centralized senior energy team to develop a risk mitigation plan to address evolving carbon regulations and fluctuating energy costs.
Real estate operational data will become an asset
Prediction: Companies will shed vendors that require them to buy back their own data in favor of owning and managing it themselves.
Progress: Enterprises are starting to implement smart building technology solutions that leverage potent tools like Power BI to slice and dice building data, giving them deeper insight into building performance from individual sites to entire portfolios.
For the sake of our survival, we must not only see the rise of big data as an inevitable part of the industry’s growth, but embrace it as a key tool in our ability to remain competitive and stay ahead of the ever-changing curve. – Michael Lanning, President, Institute of Real Estate Management
Bonus: Companies that invest early in effective smart building solutions will have a significant advantage over competition
Prediction: Early smart building technology adopters will be ahead of the curve, and their savings over time will compound like interest.
Progress: Enterprises are finally beginning to understand the potential the right smart building solution can bring. From controlling operational costs to mitigating risk, they’re leveraging tools like fault detection and diagnostics, real-time command and control, sustainability reporting, occupancy sensors and tenant feedback to inform their strategies.
After such a robust 2017, we’re looking forward to even more progress for the CRE Tech industry in 2018, starting with the launch of our refreshed website. Stay tuned for an announcement in January!