2018 Hot Trends in PropTech
Innovative technology focusing on improving the tenant experience is all the rage
This blog post was inspired by Alexis Zamkow of Applied Innovation, who shared her insights on the latest proptech trends at Okapi’s breakfast meetup in New York.
Smart real estate technology, known as proptech, is vastly transforming the commercial real estate (CRE) lifecycle. These innovative solutions are being deployed to make business processes more efficient for property owners, operators and facilitators, while optimizing the tenant experience and driving a reported 81% improvement in retention through enhanced facility performance. New market entrants, as well as legacy players seeking to achieve a competitive edge within the industry, must adopt AI-based proptech solutions to enhance data analysis and responsiveness, if they wish to remain relevant.
As such, there are several leading proptech trends facility managers simply cannot ignore. Alexis Zamkow of Applied Innovation shared her insights on these hot new trends at our recent breakfast meetup in New York City:
Trend #1 – Retail & telecom are leading the way
The US commercial real estate software market is worth an estimated $3.75 billion. This spend is expected to increase, as CRE facilities discover the tremendous potential in utilizing proptech to keep up with customer expectations and avoid churn. At present, facility managers across the commercial sector have begun to adopt and deploy AI-based solutions, with retail (49%) and telecom (41%) service providers leading the way. AI-based proptech enables these sectors to employ new and more customer-centric infrastructure management techniques that take into account demand for personalized customer experiences, streamlined maintenance & management processes, and digitally complex networks.
Trend #2 – Internal benefits are driving AI implementation
AI-based proptech seamlessly and intuitively connects all relevant personnel with the data they need to effectively communicate and delivery superior management results, while reducing the stress of daily operations. A direct result, this technology provides measurable internal benefits that together contribute to a more productive work environment and added value for the business, facility manager, employees and their end-users. According to AI-based solution adopters, increased operational efficiency tops the internal benefit scoreboard (78%), followed by enhanced employee productivity (77%), reduced operational costs (75%), greater legal/regulatory compliance at a lower cost (75%) and reduced false positives (68%).
Trend #3 – Establishing a dedicated AI-leader to increasing benefits
When comparing CRE facilities that have yet to establish professional ties with a dedicated AI-leader with those who have made the AI-based leadership jump, the benefits are clear. When an AI head is designated, the commercial organization enjoys a greater increase in inbound customer leads, sales and operational efficiency, lower overall operational costs and needs to spend less to secure greater legal/regulatory compliance than businesses who have yet to opt in. As such, a new trend is the establishment of dedicated AI-leaders to CRE facility management.
Trend #4 – Broad-based challenges still exist
The complete disruption AI seem to still be a few years off, with multiple broad-based challenges continuing to prevail within the CRE facility management field. Among those organizations already implementing AI-based facility management solutions at scale, a lack of appropriate skills and talent to complete the AI-based proptech revolution seems to be the most significant obstacle the CRE market currently faces (64%). This challenge is closely followed by concerns over data and cybersecurity (63%), employee concerns over their jobs being rendered obsolete (61%), a stubborn resistance to change (57%) and a staunch belief in the superiority of human judgement over machine learning capabilities (57%).
Trend #5 – AI-based proptech is expanding to new areas
The realization that deploying up-and-coming proptech solutions, including those that are AI-based, will optimize the organization’s performance and its customers’ experience is driving the expansion of said solutions to new and exciting areas within the real estate market:
- Residential – driving operations & leasing efficiency
- Preventive maintenance – creating a pattern across portfolio/asset types
- Leadership optimization – enabling better management of resources & operational costs
- Vendor performance – influencing onboarding, performance and overhead processes
- Inspection – streamlining functions so every inspection is passed with flying colors
- BMS & building sensor data – for a more informed, connected community
As players within the CRE market shift their priorities away from ownership and more towards the fulfillment of modern-day customer demands, key proptech trends are emerging, with surprisingly beneficial results for those inspired to adopt them. AI-based solutions are paving the way towards a smarter, more informed and more efficient facility management experience and should be adopted, without haste, to remain relevant in the ever-dynamic services industry that is commercial real estate today.
Want to learn more about how you can boost your CRE facility’s tenant satisfaction and retention?