If you’re new to the commercial real estate world, “proptech” is likely one of the buzzwords you’ve heard thrown around. But what is proptech for commercial real estate, and what exactly does it all mean?
Here’s a quick breakdown of proptech companies, and how they are already giving commercial real estate (CRE) professionals a competitive advantage in a modern landscape.
Proptech: The Latest Innovations in Commercial Real Estate
Property technology, also known simply as proptech, can be defined as the usage of technology and software to assist in today’s real estate needs. For the office sector specifically, this could mean everything from digitally facilitating unique workplace experiences, to offering advanced data and analytics capabilities for real-time feedback, to even helping property teams purchase, sell, and manage their assets.
In short: the goal is to make everything about owning, leasing, or working in a building unique, easier, and more efficient.
This also means that it’s not just for those who own and manage real estate, but the people who lease and work inside the buildings. For the office employee, having an app for their building is becoming more of a necessity every day, and allows them to conduct a very broad array of functions — anything from being a mobile key card to ordering food to visitor registration and beyond. Instead of needing several different apps to make life more efficient, the goal is to integrate everything into one central building app on a tenant’s smartphone. This creates, as we like to call it, a customer-facing “remote control” for your building.
Key Takeaways from Proptech Industry Growth
In the United States alone, proptech companies are part of a booming industry of real estate technology ventures. It is said that there are around six proptech firms for every one million people, with 38% of those working in the commercial sector — a percentage which only continues to grow.
Forbes reports that the fast-track of property technology in the real estate industry accelerated by 1072% from 2015 to 2019. Other accounts reveal that in 2020, 81% of real estate organizations planned to use new digital technologies in traditional business processes.
Due, in part, to new health and safety regulations in the wake of the COVID-19 pandemic, experts clarify that the biggest reason for proptech growth is instead matching consumer demand and habits. In the same article, Jim Berry, Vice Chairman and U.S. Real Estate Leader at Deloitte, explains: “The pandemic has certainly created unique challenges for the real estate industry. It is important to recognize that while the pandemic served as an accelerant, it did not change the trends that were already occurring. As memorable as 2020 events have been, 2021 and beyond will be telling, as certain CRE companies begin to step into opportunities to better align their operations with those of the occupier and end-user.”
This is backed by a recent Deloitte CRE Outlook Survey, which reveals that 56% of CRE respondents claim the pandemic exposed shortcomings in their organizations’ digital capabilities — as well as only 40% of respondents saying their companies have a defined digital transformation roadmap.
To HqO, these revelations make perfect sense. We’ve long since identified the shift in CRE market value from B2B to B2C: buildings and their locations alone are not enough to help owners and property teams succeed. Rather, in our current experience economy, the most value can be achieved through focusing on the people who occupy office buildings. This notion is why we first coined the term “tenant experience,” and have been helping CRE leaders succeed in this category ever since.
Making the Most of Your Proptech Solutions
The more landlords and property teams engage with CRE’s digital transformation, the more proptech real estate enhancements will serve as a differentiating factor to help attract and retain tenants and generate value. As the industry navigates this relatively new journey, property teams will get the highest return on investment (ROI) through connecting their otherwise disparate building systems in a singular, easy-to-use location. Fortunately, the HqOS™ end-to-end operating system provides CRE owners with a leap in the right direction. The three layers of HqOS — which include our Marketplace, Tenant Experience Platform, and the Digital Grid™ — work seamlessly together to produce compounding positive results for any portfolio.
To learn more about our latest industry insights, download a free copy of our industry outlook: The State of Tenant Experience in 2021.