Is commercial real estate technology being used effectively by professionals? What does the future hold for CRE technology?
These are among the questions addressed by a new study on technology trends in the commercial real estate (CRE) industry recently released by the Building Owners and Managers Association (BOMA) International and Building Engines. The report, “Commercial Real Estate Technology Trends 2018” answers critical questions, including:
- How effectively are CRE professionals using property operations technology?
- How are highly effective organizations using technology differently than others?
- What feature gaps exist in current CRE technology solutions?
- What do industry professionals expect for the future of CRE technology?
“CRE professionals are under increasing pressure to meet tenant expectations, reduce operating costs and adopt a host of constantly changing technologies,” said 2017-2018 BOMA International Chair Rob Brierley, BOMA Fellow, managing director of Real Estate Management Services and executive vice president of Colliers Boston. “BOMA International’s Technology Committee commissioned this research to understand how organizations maximize their investment in technology in the midst of such rapid change.”
“This report provides a roadmap for CRE organizations wanting to get more out of the technology that underpins operations at their buildings,” said Phil Mobley, vice chair of BOMA International’s Technology Committee and head of Research for Building Engines. “What we learned from the results is that ‘Achievers’ – the most technologically effective CRE organizations – are not afraid to explore the latest solutions, they invest strategically in technology, and they focus on securing broad and deep adoption across their teams.”
The basis for the report was the CRE Technology Effectiveness Survey conducted in February 2018, which revealed the attitudes, characteristics, and practices that distinguish technologically effective CRE organizations from their peers. Respondents fell into clear categories:
- Achievers: ahead of the curve in technology adoption and deployment
- Maintainers: keeping pace with changes in technology
- Trailers: lagging industry averages in technology adoption rates and results
More than 600 respondents completed the survey, representing a comprehensive set of property types, including major-market Class A/Trophy Office buildings, medical office buildings, industrial, retail and mixed-use properties. An equal mix of direct-ownership and third-party managed firms participated, and the study focused on organizations in the continental U.S.
Other key findings from the research include:
- Owners and asset managers stand to profit most from technology solutions that better address the breadth and strategic perspective of their roles. Only four percent of owners and asset managers consider themselves highly effective technology users.
- Early adoption is crucial for technology effectiveness in CRE: Achievers are four times more likely than Trailers to try new solutions as soon as they are available
- Achievers spend appropriately on technology, while Trailers tend to under-invest in tools that would help them operate better. Nearly six in 10 Achievers have “technology” as one or more budget line items, compared to fewer than four in 10 Trailers.
- Achievers have different priorities when purchasing technology than Trailers. Whereas Achievers place higher priority on customer service and brand image in their technology purchase decisions, Trailers are more focused on cost and time savings.
- Solutions mandated by corporate offices or building owners are 20 percent more likely to be “highly effective” than solutions selected at the property level.
- Achievers choose highly effective solutions four times more often than Trailers.
- Time and resource constraints are the largest obstacle to replacing underperforming CRE technology solutions.
- More than half of CRE professionals expect artificial intelligence/machine learning and drone technologies to have a significant or profound impact on the future of the industry.
The full report is available on the BOMA International website.