Proptech seems like a buzzword that has been appearing in many technology-focused articles lately. The word incorporates such a wide range of technologies that it can become quite confusing to comprehend. Over recent years, proptech in commercial real estate has been on the rise, owing to a hasty adoption due to the pandemic
However, proptech is far from a buzzword, as the industry garnered over $23.8 billion of investment in the previous year. It’s clear that investors see potential but it’s an umbrella term and it is very easy to get overwhelmed by the wealth of information available on this subject.
Qiyamgah , presents a detailed analysis of the uses of proptech in commercial real estate.
What Is Proptech?
Proptech is an amalgamation of two words – Property and Technology. As the name suggests Proptech includes everything that is disruptive in the real estate sector regarding technology. It can include anything from a simple platform that helps facilitate buyers and sellers to agree upon a price to building techniques relying on modern 3D printing techniques to produce houses quickly and efficiently.
What Fueled the Rise of Proptech?
Proptech is a disruptive technology and the real estate sector is known for being slow to adapt to innovation. The meteoric rise of proptech was largely fueled by the pandemic that has plagued the globe for the past two years. Isolation forced the industry to adapt and look for creative measures, and in that time of need, proptech seemed like the perfect solution.
How Proptech Is Reshaping Commercial Real Estate
Proptech is helping commercial real estate adapt to the changing trends in the market, and its influence can be seen in the industry today.
Drones
Monitoring properties and their progress is an essential part of real estate development, especially in the commercial sector. Drones can help top management monitor development in real-time and stay abreast of the progress without wasting time and energy. Drones also help with metric points of data for analysis such as temperature, Structural integrity, and environment.
3D Modelling and Printing
The need to map a space in 3D helps visualise a concept that is abstract, giving the builders a better and more comprehensive idea of what to build. 3D modelling also helps design teams in collaborating on projects efficiently regardless of where they are located.
3D printing has transitioned from a gimmick to a real game-changer with many startups now working to iron out the bugs that are hindering the growth of this disruptive technology. There are many showcases of startups that have 3D printed entire houses without any need for human input. These houses, although relatively small, were constructed in under 24 hours at a cost just shy of $10,000.
3D printing can make a significant dent in timelines for some commercial projects that require human labour as it is cheaper and works around the clock. Even if it does not completely take over the entire sector, 3D printing can augment the commercial real sector in many ways.
Virtual and Augmented Reality
Gone are the days when you had to read an advertisement in the classified section and visit the property to get a sense of what it offers. Augmented reality can help you scope out a space or property in the comfort of your own home while making changes in real-time to the property or decor to get a better sense of what you are buying.
Artificial Intelligence
Artificial Intelligence has made its way into the real estate sector and it is here to stay. Its earlier adoptions were limited to just pre-programmed chatbots that calculated their responses with slightly more intelligence than a regular programmed.
Nowadays, it has come a long way and provides complex data analysis and much more in terms of data points. A startup called Verge sense is taking IoT sensors and placing them around the workspace to map and track employee movement around the office to figure out dead space and dead zones to redesign the space which boosts productivity. It also provides comprehensive insights on workplace utilization and more to help retain and boost employees. Uses such as these can benefit the real estate sector significantly.
Documentation Tools
Real Estate is a sector that traditionally requires a lot of paperwork. It is old fashioned in terms of how it operates. However, AI can be employed to help speed up the documentation process from business proposals to write-ups. AI grows with the more data it has to process and grows better and more attuned to the company over time, making the job of hiring specific writers obsolete to a point.
Tensor Flight is a startup that offers tools to assess the value of a property by geolocation and other marked attributes to save time and money while making the repetitive job of insurance underwriters easier and more efficient.
Removing the Guesswork
Commercial Real Estate property managers look over many metrics and data points before selecting a location. However, AI can help alleviate the guesswork out of the equation. For example, when selecting a retail property, if all the data including foot traffic, Trade areas, and cross-shopping patterns are available, the decision process of choosing a retail site or its marketing efforts are targeted and much more efficient. This kind of data is a game-changer in commercial real estate and is possible only because of prop tech.
Value Addition
How Commercial Real Estate Firms Are Reacting to Proptech Adoption
Commercial real estate professionals are taking a cautious approach to proptech. They are not going to jump head-in only to invest in a technology that was nothing more than a gimmick.
Investments in Proptech are continuing to rise, and for good reason. However, there is also a large learning curve attached to proptech and disruptive technologies. This means that more often than not, adopting a technology requires a major buy-in. A complete redesigning of a fundamental process can be costly for many firms.
Due diligence is not only helpful but also a necessity when it comes to avoiding investing in a dying technology. Proptech is an umbrella term and can be applied to any sort of real estate business. It requires tremendous skill and expertise to sift out the gems from the debris.
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