In his best-seller The Tipping Point, author Malcom Gladwell wrote, “The tipping point is that magic moment when an idea, trend, or social behavior crosses a threshold, tips, and spreads like wildfire.”
Since the book was published in 2000, the ideas and concepts Gladwell describes, have been the subject of numerous editorials, speaking engagements, shifts in leadership, and have even spawned entire corporate training courses. With focus on the social aspect of change, he describes “agents of change” that influence and spread acceptance of “ideas, products, messages, and behaviors.”
While specifics of Gladwell’s theories have been embraced and debated, the phenomenon is real.
The Technology Tipping Point
For years the Commercial Real Estate (CRE) space has lagged behind other industries in its adoption of, and willingness to embrace, new technology. I have engaged in round table discussions with CRE professionals from all over the world, and listened to them describe new technology as “too difficult”, “unnecessary”, and “overkill.”
Today, in those same circles, and in my daily interactions, new technologies (i.e. 3D mapping, spatial modeling & analytics, indoor positioning, foot traffic analytics, virtual reality etc.) are now described as a “competitive advantage”, “game-changer”, and “differentiator.”
new technologies - competitive advantage
Agents of Change
Over time, there have been multiple factors that have contributed to the shift in the use of technology in CRE. However, in 2016, I believe three (3) key agents of change will confirm we are moving (or have already moved) beyond the tipping point:
1. Competition: One thing that has proven to consistently drive innovation is competition. Today, it has never been easier for large and small CRE organizations to implement technology that can make an immediate impact on their business.
Take for example an enterprise mapping platform. Organizations with associates and brokers operating in local markets all over the world, are using CRE web applications to analyze their local markets and identify areas and properties that have a very specific combination of criteria. With just a few clicks they can quickly identify property analogs, draw drive times, pull a demographic summary, create presentation quality reports and maps, and generate a compelling site tour summary. If you don’t have plans to implement these capabilities yet, you can bet your competition does (or already has).
2. Millennials: A growing percentage of organizations, and clients alike, fall into this demographic cohort. They will continue to influence and spearhead new technology into every aspect of the CRE business. And as our clients, they now expect a level of service that new technology can help provide (i.e. speed, real time data and information, sophisticated analysis).
This"always connected" generation is projected to surpass the Baby Boomers as the nation’s largest segment in 2016. And with indoor positioning services (that rely heavily on mobile devices) becoming readily available, CRE is poised to greatly advance their analytic capabilities. These technologies are collecting information (like foot traffic metrics) that help support portfolio optimization, space utilization, asset management and property evaluation. And with indoor navigation, they are even creating new revenue streams for property owners.
3. M&A Market: 2015 was a record year for mergers and acquisitions. Totaling almost $4 trillion in spending, it spurred a large spike in real estate due diligence and research. 2016 looks to be another strong year in this space, and we are seeing a spike in the need for technology that will allow for advanced portfolio analytics.
understand risk and increase deal intelligence
At GISinc, we have applications that directly support this activity, including an M&A application that allows REITs to merge large properties datasets in batch, and evaluate the potential aftermath. We can even automatically flag conflicts with property lease conditions or restrictions, allowing decision makers to more easily understand risk and increase deal intelligence.
CRE Technology Community
If you agree that CRE technology is here to stay, but your perception that its “too difficult” (it’s not!) to implement within your business, or if you believe you lack the necessary technical resources (you don’t!), I would recommend reaching out to and networking with those in the CRE technology community. You can capture new ideas, gain insight into different perspectives and make contact with industry peers. (LinkedIn is a great resource)
Also, you can read great web content like Five Steps to Help You Find the Next Great Idea in Real Estate, by Esri’s Patrick Fowler. And check out products like GISi SmartSite™, an innovative CRE web application that’s being used today by some of the largest organizations in the world. (ask for a demo!)
Above all, you can contact a GISinc CRE team member and we can set up a time to talk. We can discuss your business, and its specific needs and processes, establish or build upon your location strategy, and recommend the right mix of technology to support it.