By: Charlie Blaesser, GIS Inc.
In his best-seller The Tipping Point¹, Malcom Gladwell wrote, “The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire.”
Since the book was published in 2000, the ideas and concepts Gladwell describes, have been the subject of numerous editorials, speaking engagements, shifts in leadership, and have even spawned entire corporate training courses. With focus on the social aspect of change, he describes “agents of change” that influence and spread acceptance of “ideas, products, messages, and behaviors.”
While specifics of Gladwell’s theories have been embraced and debated, the phenomenon is real.
The Technology Tipping Point
For years the Commercial Real Estate (CRE) space has lagged behind other industries in its adoption of, and willingness to embrace, new technology. I have engaged in round table discussions with CRE professionals from all over the world, and listened to them describe new technology as “too difficult”, “unnecessary”, and “overkill.”
Today, in those same circles, and in my daily interactions, new technologies (i.e. 3D mapping, spatial modeling & analytics, indoor positioning, foot traffic analytics, virtual reality etc.) are now described as a “competitive advantage”, “game-changer”, and “differentiator.”
Agents of Change
There are multiple factors that have contributed to the change over time, however, in 2016 I believe these factors below will confirm we are moving beyond the tipping point with the use of technology in Commercial Real Estate.
Competition: One thing that has proven to consistently drive innovation is competition. Today, it has never been easier for large and small CRE organizations to implement technology that can make an immediate impact on their business.
Take for example an enterprise mapping platform. Organizations with associates and brokers operating in local markets all over the world, are using CRE web applications to analyze their local markets and identify properties that have a very specific combination of criteria (both site characteristics AND market characteristics). And with a few clicks they can quickly identify property analogs, draw drive times, pull a demographic summary, create presentation quality reports and maps and generate a compelling site tour summary. If you don’t have plans to implement these capabilities yet, you can bet your competition does (or already has).
Millennials: A growing percentage of organizations, and clients alike, fall into this demographic cohort. They will continue to influence and spearhead new technology into every aspect of the CRE business. And as clients, they now expect a level of service that new technology can provide (i.e. speed, real time data and information, sophisticated analysis).
These “always connected” Millennials also exist in great numbers in the general public - providing great opportunity to collect information (like foot traffic metrics) that support portfolio optimization, and property evaluation.
M&A Market: 2015 was a record year for mergers and acquisitions. Totaling almost $4 trillion in spending, it spurred a large spike in real estate due diligence and research. 2016 looks to be another strong year in this space, and we are seeing a spike in the need for technology that will allow for advanced portfolio analytics.
At GISinc, we have applications that directly support this activity, including an Esri Platform based M&A application that allows REITs to merge large properties datasets in batch, and evaluate the potential aftermath. We can even automatically flag conflicts by property lease conditions and restrictions – and allow decision makers to easily understand risk and increase deal intelligence.
CRE Technology Community
If you agree that CRE technology is here to stay in this space, but your perception that its “too difficult” (it’s not!) to implement into your business, or if you believe you lack the necessary technical resources (you don’t!)
I recommend you check out great web content like Five Steps to Help You Find the Next Great Idea in Real Estate, by Esri’s Patrick Fowler. Check out products like GISi SmartSite™, an innovative application that’s being used today by some of the largest organizations in the world.
And most of all, I recommend you reach out to and network with those in the CRE technology community. LinkedIn is a great resource, (look for special interest groups that have active members and current content) and you can feel free to contact myself, or a GISinc CRE team member and set up a time to connect in person.