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The National Association of Realtors has released its long awaited Commercial Real Estate ALERT which analyzes the latest trends in CRE. We’re breaking down some of their top findings with 4 compelling statistics:

1. 84% Of CRE executives see technology as the answer to industry complexity

This was the finding of a global survey conducted by KMPG. The day of “mom and pops” managing regionally is over. Owners now handle complex and often global portfolios. This gives rise to an increased number of players, stakeholders and moving pieces with not millions, but often billions on the line.

Yet the technology in the industry has been slow to evolve with top execs down through the ranks working on spreadsheets and technologies developed over 20 years ago when the industry was very different from what it is today.

Full Quote from the NAR Report:

“In a global survey by KPMG—Confronting Complexity: Research Findings and Insights—it was revealed that over 94 percent of commercial real estate executives identified complexity as their greatest challenge, with information management ranking as one of the top two reasons. At the same time, pointing to technology as a solution, 84 percent identified information management as the solution.”

 

2. Forbes found that only 11% of CRE Executives consider themselves on the leading edge of technology

Despite the fact to 84% recognize the solution, 89% are still not willing to step out of what’s comfortable, albeit dysfunctional in the current CRE environment. These executives see the gap between themselves and the 11% growing.

They understand that — in an increasingly competitive commercial real estate market — investors see working with anything other than a top firm not worth the risk.  Investors are demanding more transparent, real time data on platforms that provide a seamless user experience. They expect that their firm is using cutting edge technology throughout the organization to get big data driven results. Those lagging behind just can’t deliver.

 

Full Quote from the NAR Report:

“In a survey taken by Forbes—CIT CRE Outlook—only 11 percent of executives rated themselves as being on the “leading edge” when it comes to the implementation of technology. Most respondents recognize that the stakes are high but they continue to struggle in dealing with the challenge of working with the tech-enabled participants that are entering the industry and the impact that is having on commercial real estate investments.”

3. Over 50% of RE leadership plan to become more data-centric in 2017

According to this CCIM survey, leadership sees a necessary shift from just using data to support decision making — often in a reactive rather than proactive manner. They believe that data should be shaping their corporate strategies.

Advancements in technologies in the realms of automation, AI-based analytics and the Internet of Things have made the collection and quick aggregation of once overwhelming amounts of data more affordable, attainable and in real time. This data has the potential to transform the corporate strategies of those firms who implement effective data analytics structures.

 

Full Quote from the NAR Report:

“…more than half of corporate real estate leaders who responded to a CCIM survey said they plan to become data-centric by 2017, using corporate real estate data not just to support opinions or decisions but also to shape corporate strategy.”

 

4. As the office space requirements decrease, industry looks for new competitive edge

Thanks to advancements in mobile technology, the space allocated per employee has decreased from 250 to 151 square feet, reducing overhead for companies by as much as 30%. It’s quite an enticing proposition. But it presents a challenge for the commercial real estate market.

Leadership will need to rediscover their competitive advantage through technology. They’ll find new ways seal the deal with the tech- and data-focused investor, through incorporating:

  • Smart building technologies
  • Sustainability
  • Improved building data collection through IoT (Internet of Things)
  • Better automation of building systems

 

Full Quote from the NAR Report:

“Technology has also opened the door to working remotely, which has led to a declining demand for office space as the desire for less traditional workspaces has grown significantly. In 2010, the average space allocated per employee was 250 square feet and CoreNet projects that in 2017 it will further decrease to 151 square feet. With less required space per person, the new open layout designs result in an increase in the overall cost for additional air conditioning, rest rooms, electrical, networking, HVAC, etc.”

 

Competing In CRE Means Investing in the Right Technology

At CommissionTrac, we’re excited about the future and invested in the technology of tomorrow. If you’d like to learn more about how we can help you integrate mobile, effective, efficient, data-driven technology into your business, contact us today.

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