Since March 2020, the real estate industry has experienced a large shift to a digital environment in the face of a global pandemic. As investors shift their attention to the future of commercial spaces in a tech-driven world, many are wondering which COVID-related changes can be expected to stick around.
Recently, a panel of experts from Deloitte, One11 Advisors, CohnReznick, and MRI Software shared their insights into the specific ways investors, owners, and occupiers in the real estate industry are reacting to current market trends. Here are some of the key takeaways:
1) There’s increased interest in innovation – from all parties
Even as both the traditional office environment and brick-and-mortar retail were experiencing turbulence, the pandemic has accelerated the adoption of technology. Real estate owners and operators were forced to move their businesses further into the digital space than ever before, and many have come to recognize the benefit that these innovations can have on how their organizations are run. To quote Ken Meyer, Principal at Deloitte Consulting:
On a foundational level, everyone recognized that everything needed to be accessible, and everything needed to be properly integrated so you could drill down and see the data.
Since the pivot to digital in 2020, many of the reasons that owners and operators traditionally opted against impactful tech adoptions simply vanished. Now, with those barriers gone, companies are investigating the possibilities of tech innovation as a competitive advantage more than ever before.
2) Tech adoption can mitigate risk in strategic planning
Having access to the right data can help you make more informed business decisions, but in a world where it seems like everything is “unprecedented,” access to historical information isn’t always enough. Utilizing technology that enables businesses to analyze market trends, variables, and other external factors can provide valuable insight that can be used to drive better decision-making and optimize return on investment.
3) Investors want to understand the end users of their services
Core aspects of offices and retail centers were dramatically impacted by the loss of foot traffic at the start of the pandemic. Real estate investors have become acutely aware that they rely on more than just consistent rent rolls and cashflows – they also rely on the employees that work for the occupiers, or on the customers that retail tenants depend on for profit. In order to boost performance in businesses dependent on the human element, investors need more information on the end users of their services – customers, employees, visitors – than ever before. By taking cues from the relationship-driven residential sector, commercial real estate investors are adopting smart technologies that enable them to benchmark the behaviors of those end users in order to drive performance.
Among all these observations, the panel of experts agreed on one thing: the digital transformation in the real estate industry is here to stay, and when it comes to tech adoption, looking forward will be the only way to stay ahead of the curve. Learn more about the opportunities for real estate investors in a post-COVID environment.