Technology and real estate outsourcing are becoming increasingly integrated and corporate clients are reaping the benefits
Buildings and the technology that lies within them have become synergistic entities, requiring that real estate executives become technology experts, as well as leaders in real estate strategies. Data governance, IoT integration and predictive analytics are just a few of the technological advances that are shaping this new real estate specialty and enhancing executive experience and corporate performance.
The result: convergence of real estate and IT outsourcing, two disciplines that were considered apples and oranges in the past. However, the two are becoming increasingly integrated, forging new partnerships between information management and investments and acquisitions. A technology consultant is now just as likely to work for a global real estate services provider like JLL as they are to work for IBM or Unisys.
Indeed, the use of data and technology by forward-thinking real estate organizations is efficiently and effectively boosting their bottom line, but it is also delivering significant operating advantages to their clients' corporations. Highly efficient building operations, advanced amenities and workplace services, data-driven workplace and portfolio strategies and greater business agility are among the many benefits realized by corporate clients today.
Undeniably, the commercial real estate industry has come from behind in the technology space. Technology has changed the once highly tech-resistant industry in a variety of ways, including:
- CRE organizations are launching partnering agreements with key technology innovators. JLL has most recently forged a five-year technology and services partnership with Enlighted, a leading provider of advanced sensor technology, and Web-enabled visualization and analytic applications for commercial buildings.
- Several commercial real estate companies and capital sources are investing in promising technologies in hopes of financial gain from "the next big thing." Real estate service providers like JLL, meanwhile, are pursuing technologies that will help clients become more efficient, nimble and productive through their real estate and facilities.
On the flip side, the technology industry has been transformed by real estate, as well:
- Established real estate technology companies are not the only ones to gain force in the marketplace. Sizzling startups raised $428M across 56 transactions in the first quarter of 2016, a record for investment activty in the real estate technology sector. By the end of June 2016, a number of startups had secured financings exceeding $50 million, reflecting dramatic growth in the sector.
- As JLL has learned, significant time and resources are needed to research, select, and test new technologies, establish new relationships with providers and analyze potential acquisitions. A few of the larger real estate companies have full-time researchers and teams dedicated to technology and innovation.
Commitment to innovation
Not every CRE organization is willing or able to make the level of investment and resources needed to make the right technology decisions. At JLL, we are currently tracking 60 to 70 tech start-ups, including making direct investments in some, acquiring others, confirming enterprise-level services agreements, mentoring tech leaders and much more. We are always exploring more mature entities and technologies for possible enhancements to our technology ecosystem.
When we compete more effectively, our clients benefit. Being at the forefront of real estate technology advances makes it possible for us to offer the best amenities and workplace services to employees and clients alike. Partnerships between in-house corporate real estate teams and their service provider should include a mandate for innovation in service delivery and this will inevitably include technology. Embracing technology is critical in preparing for the future and future-proofing our industry.