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CRE Moves from Awareness to Adoption of Proptech

National  + Weekender  | 

In common with other industries, commercial real estate is adapting to today’s “data everywhere” world, and making investments to create value through data and analytics, says Altus Group. In particular, over the past two years, the CRE universe of owner-operators and investors has experienced “a significant acceleration from awareness to adoption of both emerging technology as well as the utilization of data analytics,” the firm says in a new report.

Driving efficiency through automation is a key priority for CRE executives, and the use of AI and machine learning is approaching a critical mass, says Altus. CRE firms are now automating processes or applying AI and machine learning in a variety of areas, although widespread adoption is still on the distant horizon.

Altus’ global survey of 400 CRE executives at firms with at least US$250 million in assets under management found that 41% are using automation for benchmarking and performance analysis, 39% for scenario and sensitivity analysis and 36% for budgeting and forecasting. Nineteen percent are using AI and machine learning for scenario and sensitivity analysis, followed by 16% for accounting and property management.

More common among CRE firms these days is the use of transaction-based platforms, such as online property exchanges, lending marketplaces and crowdfunding. Altus says these increasingly are being used to streamline processes and create a more direct line between buyers and sellers, lenders and owners, and investors and funds, effectively altering the relationships between them at a fundamental level.

“The combination of new market entrants, new technologies and changing demographics have created disruptive models within CRE,” says Altus CEO Bob Courteau. “This is having a profound impact on portfolio planning and decision-making.”

At the same time, he adds, “this presents new opportunities for organizations who rapidly embrace innovation and proptech to reduce complexity, increase efficiency and drive performance.”

However, Altus’ report notes that while this changing sentiment and increasing investment is promising, “CRE firms continue to be selective when it comes to adoption.” Many haven’t recognized the potential opportunity and benefits of some rapidly emerging technologies that have already gained traction in other industries.

“This could be a symptom of the fact that many CRE functions, systems and related data are still heavily siloed,” according to Altus.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).