The commercial real estate industry suffers from a reputation of being a laggard in terms of adopting new technology and maybe that’s not such a bad thing as the commercial brokerage community doesn’t jump to grab every shiny new toy as soon as it is introduced before it is proven to be a valuable tool. I should specify I am referring to the brokerage industry and not building operations.
However, over the last year or so, beginning with the rise of the tablet and the introduction of mobile applications by LoopNet and CoStar, we have seen more and more technology entrepreneurs bring new offerings to the marketplace designed specifically for the commercial real estate industry. In recent weeks we have seen several new products and services aimed at CRE launched and I only expect it to accelerate. Past history tells us that CRE doesn’t know Tech and Tech doesn’t know CRE. Maybe that is about to change? Tech looks at CRE and sees inefficiency and outdated ways of doing business but rarely understands its complexity.
If we have learned anything about start-ups from the dot.com bubble and burst 10 years ago, it is that not all these technology and internet offerings are going to be successful. If you read the major tech blogs it seems like there is a new social/mobile service launched every day and only a handful have become household names. While we now live in the Facebook / iPhone App era many of these services will fail to survive unless they bring values to our life either in the form of productivity or entertainment.
The same will hold true for technology aimed at the Commercial Real Estate industry. I think it is important to remember that commercial real estate is a complex b2b buying/selling process. Transacting commercial real estate is not like booking a hotel room. The services that bring efficiency to specific components of the process whether it is within the marketing, research or operations realm of the spectrum are the ones that will be successful. Rewind back 10-12 years ago when CoStar and LoopNet emerged as winners because they delivered efficiency to the fragmented marketing and research function of commercial real estate and yet at the time some felt threatened by these services. Maybe some still do!The younger generation of brokers is much more comfortable with technology and their future clients will expect them to be.
Technology won’t replace the brokerage industry; the process of transacting commercial real estate is complex with multiple participants in the process and occurs too infrequently for most purchasers/ sellers and users to learn all the nuances of the trade. Technology which brings efficiency is a “good thing” and allows service providers to focus on the aspects of their offering that brings real value. Anyone can find property or summons data with a few keystrokes into a software program. The value is in knowing what to do with that information.
The cell phone, personal computer and the internet changed the way we do business, now all three of those tools sit comfortably in the palm of our hands. Data-is-Data, now we can access more meaningful data and we can get it faster from anywhere at any time and share it to the world instantaneously, and that is all that has changed.