8 real estate technology trends for 2020
Real estate technology in 2020 will present an opportunity for both residential and commercial firms to differentiate themselves through relationships. In the coming year, we predict that technology will be a catalyst that enables firms to drive tenant satisfaction, keep occupancy rates high, and build stronger relationships with everyone from residents to investors. We’ll see continued technology adoption in the industry as more firms gain real value from their software.
1. The most anticipated downturn still won’t happen… or will it?
Spoiler alert – no one has a crystal ball that will predict when “the most anticipated downturn in history” will happen. The only thing we’re certain about is that speculation will continue regarding the timing of the downturn. But, based on a very unscientific survey that we conducted at the MRI Ascend Users Conference in Anaheim, a room full of industry leaders thinks that the downturn will take place in the second half of 2020 or early 2021.
Pro tip: Regardless of when the real estate cycle ends, firms that leverage technology to mitigate risk and drive efficiency will be better positioned to weather the storm.
2. AI gets (more) real
Building on the momentum of prior years, 2020 will bring more pragmatic applications of artificial intelligence (AI) to the real estate industry. All new technology goes through an initial hype cycle, and AI is no longer a shiny new object but has moved closer to actual implementation. As tech adoption gains strength, and more firms embrace the use of data and analytics, AI can optimize traditionally manual processes such as lease abstraction and also impact the business in more strategic ways – enabling faster decision making, increased visibility and transparency, and improved tenant satisfaction across the portfolio.
Pro tip: Exploring the use of AI to automate manual processes, make data more easily accessible, and empower your staff will help firms evaluate opportunities more quickly and grow the value of the portfolio faster. There will also be AI opportunities in customer-facing arenas where natural language processing is become more of the norm.
3. Big data becomes smart data
Deloitte’s 2020 Commercial Real Estate Outlook says “real estate is no longer about ‘location, location, location;’ it has evolved into a new mantra: ‘location, experience, analytics’.” Real estate firms have long been enamored with the idea of gaining insights from data, but the groundwork required to actually achieve ROI from it has historically been difficult to put in place. In the coming year, the real estate industry will be better equipped to leverage data with the help of proptech solutions that enable integration and standardization. In the past, firms have looked to data for short-term insights, but over the coming year, technology will provide ways for firms to analyze data as part of a longer-term strategy.
Pro tip: Data science and analytics will be a prominent feature in the future of the industry, and real estate professionals should educate themselves on basic data science as it will become an integral part of daily jobs at all levels in the organization.
4. New consumer privacy regulations will surprise many
Real estate firms, particularly multifamily owners and operators, will need to put processes in place to comply with new consumer privacy regulations. The California Consumer Privacy Act (CCPA) goes into effect in 2020, and it will have an impact far beyond just California. The recent General Data Protection Regulation (GDPR) enacted in Europe has had a global impact. Other than NMHC, there are few industry voices talking about GDPR or CCPA yet. The requirements of these new regulations and the fines for non-compliance will catch many off guard.
Pro tip: Multifamily owners and operators need to have a detailed understanding of how their organization manages data, so they will be better prepared to comply with potential changes to consumer privacy practices.
5. Proptech is more than a buzzword
The term “Proptech” is no longer just a hashtag – it’s an industry, and it refers to more than just the tech startups that are disrupting real estate. As we predicted last year, VCs are no longer throwing money at ideas — the companies that provide real value to clients have emerged as successful. But with a broader array of technology tools to choose from, real estate owner/operators will be challenged to sift through the noise and effectively evaluate the available options.
Pro tip: Real estate firms with tech-savvy leaders who can distinguish between disruption and innovation will be better equipped to evaluate the technology providers vying for their business.
6. Digital amenities for renters are table stakes
Multifamily property managers know that today’s renters expect digital services and amenities, from the time they start searching for a new apartment, to signing the lease, and moving out. Most renters are Millennials and Generation Z, and virtual tours, electronic lease signing, online rent payments and package management are table stakes now.
Pro tip: Multifamily properties that embrace the shift to a more resident-centric approach will be able to attract and retain residents more efficiently by providing digital services.
7. Increased focus on the customer experience
Most multifamily operators have already shifted from a lease-centric approach to a more wholistic resident-centric mindset to increase occupancy and resident satisfaction in their community. But commercial firms will soon experience a similar trend. The landlord/tenant relationship will become a vendor/customer relationship, making metrics around tenant satisfaction, appreciation, and turnover more important than ever, especially as commercial leasing continues to become more fluid.
Pro tip: At the property level, landlords will need to proactively invest in their properties and monitor them more closely to keep tenants happy.
8. Affordable Housing will still be a conundrum
As interest rates continue to go down, money will be cheap. This allows developers to get financing more easily, but they will likely continue to focus on high-dollar development opportunities instead of low income and affordable housing. For affordable property managers, efficiency and automation will be key to achieving results with limited resources.
Pro tip: Purpose-built software can help affordable property managers automate compliance, manage multiple funding types, and streamline operations so they can better serve the community.
We may not have a crystal ball, but as a pioneer of the real estate software industry with nearly 50 years of experience, we’ve seen many changes over the decades. 2020 will certainly bring some challenges and opportunities, but real estate firms that leverage technology to manage their relationships and their assets will come out ahead.
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