Real estate has always been traditional, with long-standing rules and a tendency to embrace minimalism. It has favored those who make cautious decisions within well-defined parameters. Historically, debt or equity investors have maintained a certain way of doing things.
However, the landscape is changing, and it is having a significant impact on the real estate industry.
The New Wave of Digital Tools for Real Estate
Proptech, the new wave of digital tools used by real estate professionals, is revolutionizing traditional ways of operating, altering office workflows, and reshaping the real estate business itself.
This shift has long been needed, and understanding the reasons for its emergence, who is driving the trend, and how it will benefit the field is crucial. The very foundation of real estate is changing, and those who grasp this transformation and adopt best practices are likely to be the most successful in this pivotal shift in real estate practices.
Proptech: A Need Always Present, Recently Revealed
The need for proptech has existed for a long time, but recent factors such as the pandemic and evolving consumer behaviors have accelerated its adoption. The necessity for agents and brokers to find innovative ways to showcase properties virtually and ensure seamless processes became apparent during the pandemic.
Although more experienced professionals have been slower to embrace proptech, the tools are moving toward widespread adoption. In today’s world, not adopting proptech could prove to be a detrimental business decision, despite the traditional culture of real estate encouraging maintaining the status quo.
A Generational Divide: Proptech at the Center
There is a clear divide between more experienced real estate leaders and the emerging generation of commercial real estate leaders concerning the value of proptech and the future of real estate technology. Currently, there is a strong argument that the status quo will persist.
Nevertheless, the tide is shifting in both offices and venture capital. Since the start of the pandemic, nine out of 10 real estate personnel have implemented digital tools in their practices, and 82% believe that proptech solutions will be necessary going forward. Venture capital firms recognize the potential of technology in supporting the $4.4 trillion commercial real estate market and are consistently investing in this area.
Putting Proptech Into Practice: A Changing Industry Driving Adoption
While technology has become integral to various aspects of our daily lives, commercial real estate teams still rely on traditional tools and processes. However, there is a danger in sticking to legacy tools for too long. Many are realizing that proptech allows for faster deal flow and facilitates the analysis of previously inaccessible properties.
Advantages of Information, Collaboration and Productivity
Proptech tools offer a competitive advantage in terms of information, collaboration, and productivity. Those who do not adopt these tools face the risk of being left behind.
Proptech solutions are fundamentally reshaping the future of commercial real estate by redesigning processes and enabling teams to work more efficiently and strategically. Consequently, brokerage offices are beginning to take notice.
How Adoption by New Generations Will Positively Affect Real Estate
Proptech is experiencing increased adoption, particularly as a younger generation of real estate professionals assumes more decision-making roles. This new cohort of commercial real estate talent has grown up with technology and finds it inconceivable to rely on traditional tools for managing their organization’s second-largest expense.
By adopting proptech tools and solutions, this younger cohort of commercial real estate professionals is propelling their teams forward by freeing up time for higher-level strategic thinking instead of mundane tasks such as manual data entry and tracking.
1. Automating Lease Management
Lease management software challenges the traditional use of spreadsheets in real estate processes, automating manual data input and administrative tasks to create a reliable source of lease data.
2. Reducing the Risk of Human Error
Proptech technology minimizes errors in lease management, helping to forecast rent escalations and manage critical dates more effectively.
3. Elevating Human Personnel for Strategy
Automating manual processes associated with lease management frees human personnel to focus on critical thinking and strategic decision-making, ultimately leading to better leasing decisions for the business.
Reliable Data and Practices
With reliable data and sound practices, employees can make better investment decisions and help propel the company forward. Real estate is gradually undergoing significant changes with proptech being one of those breakthrough transformations.
