Why CRE Needs to Invest in Technology Now

The commercial real estate industry will not only benefit from technological efficiency, it needs it. In the next few decades, we will see rapid global population growth, urbanization and an increase in institutional capital investment. To manage these growing demands and supply market needs, real estate owners and investors will need to create efficiency through technology.

“The global urban population is expected to reach 6.3 billion by 2050. This is up from 3.6 billion in 2010,” Riggs Kubiak, CEO of Honest Buildings, tells GlobeSt.com. “With such an influx of people into urban areas, buildings will need to be repositioned. Urban centers as big as NYC to small suburban downtowns all over the globe will need to meet the changing needs of people to live, work, and play. As this large influx of people is happening, institutional investors will see assets under management swell to $101.7 trillion dollars by 2020.”

Honest Buildings is a purpose-built technology platform focused on capital planning, and Kubiak says that these are the kinds of platforms that real estate owners should be investing in today. “Given the shifting demands of both urban dwellers and institutional investors, owners will need to find new ways to create value for their tenants and their investors over the next 10-20 years,” he says. “With this increase in institutional investment, owners will experience increased demands from these investors, especially around reporting and the use of data, resulting in higher competition to secure these investments. New methods and processes and better project management, approvals, capital planning and integrations will need to be applied to the ways that owners deploy capital. This changes the trajectory of progress for urban areas all over the world, which in turn affects every single one of us in the real estate industry, and every single one of us as people who live, work and play in urban areas.”

Owners have been slow to adopt new technology because—frankly—there are few technologies built for real estate owners. More purpose-built real estate technologies, as Kubiak calls them, will only increase the integration. Owners are already showing an increased interest. “Owners collectively spend trillions of dollars per year to build, reposition, and maintain the built environment where human beings spend 90% of their time,” he adds. “We believe they should be driving technology that is built so specifically for them it feels like a custom-built Ferrari. Ultimately this will lead to better buildings, better cities, and a more productive society.”