2018 has been a year of extraordinary innovation and fundamental shifts in the way commercial real estate professionals operate assets and manage portfolios. I’m confident the industry will look back and consider this to be the year when the PropTechindustry reached a tipping point, with even the most traditional and risk-adverse executives accepting technology as critical to the day-to-day functioning of landlords and brokers.
For proof of this shift, look no further than brokerage. Someone once told me that brokers would never change. Recently, JLL CEO Christian Ulbrich said publicly the firm has a vision to become a technology firm focused on real estate. Considering where the industry was just five years ago, that’s an almost unfathomable shift.
This adoption is only just the beginning. Looking forward, here are my predictions for how PropTech will progress in 2019.
1. The underlying infrastructure of leasing and asset management will be completely transformed
2019 will be the year that commercial real estate finally undergoes the same transformation that other industries, like financial services, experienced decades ago. Historically, thanks to disparate systems, disjointed and manual processes, and poor team communication, it’s been incredibly difficult (if not impossible) for many landlords to measure and improve their business performance and ensure they’re on target to hit their portfolio objectives.
In 2019, these inefficiencies will be eradicated for good, with landlords fully embracing technology to transform their leasing and asset management processes. By managing all of their deals, assets, and customers in one place, landlords will capture insights that will enable them to make faster, more informed decisions across their assets and enhance portfolio performance.
2. Market data will completely change the game
Being able to transform your processes is just one piece of the puzzle. 2019 will see the true game-changer emerge — market benchmarks.
For decades, CRE professionals made leasing and investment decisions with limited visibility into markets and their performance within them. Executives relied on anecdotal information or general market reports based on self-reported data that was months old upon release.
As I’ve written about before, VTS is changing that. We recently announced plans to launch VTS MarketView™ — the industry’s first real-time benchmarking and market analytics. For the first time, CRE professionals will be able to compare property-level performance against the market across key metrics, all based on live, real-time transaction data.
3. Managing tenant relationships will become a focus for all investors
Today’s tenant has a wide variety of compelling space options to choose from. Landlords are quickly realizing that to avoid losing tenants, and the resulting loss of income, building ongoing relationships is key. 2019 will be about doing this successfully, and at scale.
That said, managing customer relationships has been difficult. Tenant and lease data has been buried and it’s almost impossible to see where connections exist across a portfolio. VTS has been working closely with our clients to solve this challenge—we recently launched VTS Tenant Relationship Management (TRM), the only relationship management software that has been designed specifically for CRE. TRM enables landlords to capture all tenant and lease data in one place and uncover relationships portfolio-wide—allowing landlords to better retain high-value tenants, mitigate against risk, and accelerate new leasing opportunities.
4. Commercial leasing will move online
More leasing transactions will happen online in 2019, and not just the smaller spaces. Increasingly, tenants are expecting their leasing experience to be like those they have when they transact with other brands — flexible, quick, and simple. Tenants have already seen the shift from offline to online for what would be considered other “large” transactions. For example, when they shop for cars or homes, yet commercial leasing is now one of the few industries left where this is not the norm. As coworking and flexible space continue to emerge in response, landlords and brokers will evolve their service offerings too.
5. Tech will become critical for talent attraction and retention
Tech will play an even more powerful role in 2019 in respect to attracting and retaining the best people. Millennial and Generation Z talent have hardly known a world in which smartphones and apps weren’t second nature. Candidates will be looking to harness the same level of technology at work, and in 2019 the presence of an innovative culture will, in a large number of cases, be the decisive factor for job candidates evaluating a role at your company.
As technology and real estate continue to converge next year, it’s tech-forward owners and brokers who’ll win the talent battle — and the battle for industry dominance overall.