What is proptech?
Property technology, often called proptech, refers to the use of technology in the real estate sector. Proptech is commonly used to collect data-driven insights about building utilization, automate workflows, support property or portfolio management, and much more. The end goal of using proptech is to improve how people buy, sell, rent, design, construct, or manage properties.
Benefits of proptech for CRE
Property owners have a seemingly endless to-do list when it comes to managing and operating their buildings, but property technology is enabling digital transformations that make it simpler. Embracing proptech can lead to:
- Better data management: Real estate technology can collect and analyze data at scale. It allows commercial property owners to make smarter portfolio decisions and even forecast real estate market trends.
- Increased efficiency through automation: Proptech automation saves time and increases accuracy in many areas of CRE, including property management, building maintenance, real estate development, and portfolio valuation.
- Smarter, more sustainable buildings: Energy-efficient lighting, temperature control, and enhanced security systems are just a few of the many ways proptech makes building operations easier and more eco-friendly.
- Improved tenant retention: Technology can enhance the tenant experience and improve retention by making leasing, communications, and maintenance requests quick and easy.
2023 proptech solutions
Property technology is a fast-moving industry, with startups steadily blazing new trails. Here are some of the biggest trends in proptech for 2023.
Artificial intelligence
Artificial intelligence uses machine learning to leverage data sets and hone its responses over time. It can communicate this information to people in an easy-to-understand way using natural language processing. This combination makes it an outstanding new technology for real estate professionals, especially in the areas of financial modeling and real-time analytics.
Accurate property valuations are critical for CRE professionals. Traditionally, this has been a complex and time-consuming process, with the end result being subject to human error. AI can calculate an asset’s value precisely and almost instantaneously, allowing real estate investors to make smarter portfolio decisions.
Real-time analytics use up-to-the-minute data to create the most accurate projections for demographic and market trends. Real estate companies can use these to capitalize on opportunities before they become apparent to their competitors. For example, if a projection indicates growth in an underdeveloped area, investors can proactively plan to meet this demand with office buildings and other commercial real estate investments.
Virtual reality
Virtual reality is a 3-D, computer-generated environment that provides viewers with an immersive, life-like experience. The real estate industry has quickly embraced this technology as a cost-effective way to show properties to potential lenders or occupiers. Rather than having to do an initial showing in person, interested parties can take an interactive virtual tour first to determine if the property meets their needs and expectations.
Internet of things
The internet of things (IoT) made the smarthome ubiquitous, and now this technology is readily available at scale for commercial buildings. CRE professionals herald IoT for several reasons, including:
- Improving sustainability: An ecosystem of smart devices can optimize lighting, temperature, and water flow to reduce energy consumption.
- Increasing profit margins: With a reduction in energy usage and automated systems that eliminate the need for human oversight, owners can streamline operating costs and increase profit margins.
- Optimizing square footage: Occupancy sensors can track occupants’ space utilization to pinpoint underutilized areas that can be cut from the portfolio or transformed to meet a new need.
- Predicting maintenance needs: Building maintenance sensors and software can predict repair needs before they become expensive problems. They also reduce some of the human labor needed to monitor the space, submit work orders, and manage maintenance records.
Leading proptech companies
Savvy entrepreneurs have had their eyes on the proptech industry for the past few years. The companies below are paving the way for real estate tech that supports portfolio optimization, smarter investments, better building management, and more.
Density
Density creates sensor-based technology that anonymously measures how people use space. This data allows users to make the most of their square footage, improving the tenant experience and reducing expenses. It also enables CRE owners to make smarter, data-backed decisions about when to repurpose, consolidate, or expand.
Reonomy
The traditional real estate market has collected enormous amounts of data over the past decades, but the information has been siloed and unavailable to most CRE professionals. Reonomy has changed that. It has connected millions of records from various sources using AI and offers valuable CRE information technology as a service.
Zillow
Zillow is a well-known proptech company that serves as a real estate database that’s as useful for commercial real estate investors as it is for homebuyers. In addition to the easy-to-search database of property listings, Zillow also connects users with listing agents, provides property value estimations, and offers an app to create 3-D virtual reality property tours.
Headquarters Optimized (HqO)
HqO is a real estate technology platform that aims to improve the tenant-landlord relationship and the overall tenant experience. Billing itself as a remote control for commercial properties, HqO connects owners to all aspects of their buildings, from tenant engagement activities and amenities booking to the IoT systems controlling operations and maintenance.
Add proptech to your CRE toolbox
The meteoric rise of proptech in commercial real estate is providing CRE professionals with previously inaccessible data and the ability to control nearly every aspect of building management using a smartphone app. Property technology has already begun to transform how CRE operates. Now is the time to take advantage of these new technologies to ensure you stay competitive in the ever-evolving real estate landscape.
