Digital transformation of commercial real estate

Digital transformation in commercial real estate has arrived.

The construction industry is changing the way it views building occupants.

Commercial tenants are treated as valuable customers and guests, not just "space tenants." After all, without them, vacant commercial properties can weaken even the most robust investment portfolios. Therefore, real estate investors need to look for the most precise and healthy investment portfolio to ensure the maximum value of commercial real estate.

Now more than ever, commercial real estate owners looking to successfully lease must consider the tenant experience.

No wonder the importance of tenant experience is growing rapidly. Digitalization is the conduit for change that will enable landlords to take new responsibility for delivering services rather than just providing square footage. In this process, it is no wonder that digital channels are key, which will enable landlords to achieve

"Space as a Service" - Digitalization is improving tenant experience The Role

Workplaces are becoming increasingly comfortable, welcoming and vibrant thanks to forward-thinking developers and owners. Significant progress has been made in delivering today's post-pandemic experience as staff learn to stay at home.

Occupiers want to improve the tenant experience, and they look forward to using the digital environment as part of the service for a better living experience.

Therefore, for those who wish to achieve lasting success in the industry, technology cannot be ignored. That’s why digital transformation in commercial real estate is so important.

What is digital transformation? Why is it so important to the commercial real estate world?

Digital transformation is actively reshaping the commercial real estate industry. This helps foster a long-needed healthy collaboration between landlords and tenants, where the tenant is the “customer” or “guest” and the landlord is the service or provider. This transformation not only improves the efficiency of commercial real estate, but also provides owners and tenants with a better and healthier way to work together.

But the benefits of digitizing commercial real estate don’t stop there. It also simplifies operations and cuts overhead costs. And, most importantly, promote sustainable development.

Digital transformation can be described as the integration of digital technologies in all areas of a business: including operations and real estate.

But it’s also about creating a culture that embraces change. This culture is not afraid to try new concepts. This culture is dedicated to finding ways to make things better. This culture will be key to the industry’s digital success.

Solving the Problem: New Innovations in Commercial Real Estate

According to JPMorgan’s 2023 Business Leaders Outlook: Commercial Real Estate, the industry is concerned about inflation, rising interest rates and possible Worried about the emerging economic recession. However, there is enough potential in today’s problem-solving real estate technologies to keep people optimistic. In other words, digital transformation could be the key to major change.

During the digital transformation process, setting goals is an important task. This helps influence which technologies are adopted and how they are best used.

For example, a property owner might work to solve a specific problem that is holding them back. It can also set goals such as reducing operating costs to improve profitability, improve property management efficiency or enhance sustainability.

And then there are goals that trickle down to the tenant experience, such as creating a healthier building, a building that runs more efficiently, a building that is energy efficient from the ground up, designed to improve tenants’ bottom line and support their own sustainability efforts.

Imagine these benefits trickling down to the tenant experience, improving the lives of workplace users and visitors at the grassroots level. There are tangible benefits at every level.

So, what can the industry expect in terms of digitalization?

What technology is driving the transformation of commercial real estate?

Intelligent Building Technology

Smart building technology combines the power of Internet of Things (IoT) connected sensors, artificial intelligence and machine learning to control, monitor and optimize a range of building operations. As data is collected and analyzed from across the building, it is aggregated into smart dashboards, providing managers with the information they need to make informed decisions, often in real time.

That’s not all.

The technology also creates automated processes that replace time-consuming manual tasks and free up countless hours to focus on more constructive tasks.

Owners can enjoy a range of benefits, many of which can be passed directly on to tenants...

Advanced Sustainability

Smart building technologies incorporate Powerful energy management tools designed to directly reduce a building's carbon footprint. The system automatically adjusts lighting, heating and ventilation based on weather conditions, occupancy and other factors.

Additional features monitor system and equipment health, moving maintenance plans from reactive to proactive so you can budget ahead and reduce the risk of harmful downtime.

Improving Occupant Comfort and Engagement

Focus on workplace wellness has been growing significantly since 2021. It is now known that healthy spaces free of daily worries are beneficial for increasing motivation, productivity and creativity.

In smart buildings, occupants are able to optimize their personal workspaces. Heating, ventilation, air conditioning and lighting can all be controlled via apps on users’ personal devices, creating the best environment to get work done and fostering a feeling of being valued in the process.

HVAC automation systems can also improve indoor air quality, promote workplace health, and avoid issues like dampness and mold caused by humidity.

Improving Building Management Efficiency

Smart building technology promotes compatibility across a range of building equipment and systems, allowing property managers to operate proactively rather than reactively. By having a comprehensive view of the building and its systems around the clock, preventive measures can be taken to prevent small problems from turning into catastrophes.

The HVAC automation system kicks in again, this time to protect the building from moisture and mold damage.

Better Security

Smart security systems make occupants feel safer and buildings enjoy a higher level of protection.

AI video surveillance, remote monitoring, mobile credentials and role-based access control can all reduce landlord liability, streamline operations and help improve the all-important tenant experience.

Clearer Communication

Smart building technology can enhance tenant engagement and satisfaction. Communication becomes more streamlined, with owners/property managers and tenants able to communicate in real time via smart device applications. Convenience is king as time-consuming helpline calls are a thing of the past.

But smart building technology does more than just facilitate communication. It can also change the entire problem reporting process.

Smart predictive maintenance alerts building managers or owners to potential problems. This is a refreshing new approach that provides tenants with a more concierge-like experience.

Digital twin

A digital twin is a virtual version of a physical object, process or system. It uses Internet of Things (IoT) connected sensors to extract data from the real world and synchronizes the data in a virtual replica environment. Any changes that occur in the physical world are reflected in the virtual world and vice versa.

There are great advantages to testing what-if scenarios in the commercial real estate world. By creating replicas of buildings, various experiments can be carried out in a safe environment.

Digital twins can analyze data, workflows and the impact of human behavior in real time. Actionable insights can be gathered before critical decisions are made and resources allocated.

Energy Efficiency

Digital twins monitor and control lighting, heating, ventilation and air conditioning (HVAC) systems in real time. All systems automatically adjust based on occupancy and climate conditions, optimizing energy use and reducing waste.

Building managers can road test various scenarios, such as what would happen if an office environment reaches 100% occupancy during a heat wave. Is the system robust enough to handle growing demands? What happens to energy consumption? Such foresight can help avoid frustrating realities.

WORKSPACE DESIGN

Reorganizing an office to test changes in productivity and comfort can present challenges. By leveraging digital twins, the effects of layout changes can be tested in a virtual environment with minimal disruption.

The technology provides detailed analysis of resource consumption, energy usage and fluctuating comfort factors through simulation without affecting daytime work.

Resource Management

Monitoring resources is a time-consuming task. But thanks to digital twins, things like water, energy and office supplies can be managed more efficiently. As supply dwindles, the ordering process automatically prompts. Only place orders when necessary, so you avoid overstocking and unnecessary waste.

Digital twins can also detect anomalies. For example, if water usage is much higher than normal, a leak alarm may sound. Or, if the machine's output drops, it may need repairs. In other words, the technology helps with monitoring, potentially averting major problems.

Equipment lifecycle and asset tracking are also important components of this technology, allowing informed decisions on replacements and upgrades.

Occupancy Monitoring

With real-time occupancy data, managers can optimize desk allocation and reduce overall office floor space.

According to surveys, office spaces spend about one-third of their working time idle. This is a huge and unnecessary waste of energy and resources that is entirely avoidable, thanks to the wealth of insights provided by digital twins.

Sustainability Strategic Planning and Reporting

Digital twin modeling can help companies determine which sustainability strategies are best suited. Before making any permanent changes, options can be evaluated.

Another feature of the technology is in-depth data on resource consumption, energy use and sustainability metrics, making ESG reporting and regulatory compliance processes a breeze.

Blockchain

Blockchain is a centralized public digital ledger used to record transactions and track assets across a business network. With this technology, permissioned participants can access the same information simultaneously, increasing efficiency, building trust, and eliminating conflicts.

This technology has had a huge impact on the commercial real estate sector, changing everything from real estate purchase and sale transactions to financing, leasing and management.

Greater Transparency and Lower Costs

By providing a secure, tamper-proof trading platform, blockchain helps reduce fraud and increase costs for all parties involved trust between them. The technology can also reduce transaction costs by reducing the need for manual processes.

Blockchain “smart contracts”—contracts that automatically execute the terms of an agreement, reduce the need for intermediaries and increase the speed and efficiency of transactions.

More efficient data management

By providing a secure and transparent data storage and sharing platform, blockchain helps reduce the risk of data leakage and improve data accuracy.

Artificial intelligence - leading the data-driven revolution

In digital smart buildings, a large amount of data will be generated. It takes countless hours for people to absorb this data and draw meaningful insights. This is where artificial intelligence (AI) can play a huge role.

AI has the ability to filter terabytes of data in minutes and combine insights across a range of elements, including building performance, energy use, occupant experience and sustainability, to provide clear, actionable insights for buildings suggestions. These insights can yield huge benefits and lead to new and profitable opportunities.

As artificial intelligence develops and becomes more prevalent in the commercial real estate sector, we see it combined with other technologies such as drones and robots to improve feedback on buildings and their occupants through physical tours and interactive.

Digital transformation of commercial real estate - improving owner-tenant relationships

Today, commercial real estate owners are no longer just seen as space providers, their role has changed tremendously Change, has become a concierge service provider.

Now, it’s the landlord’s job to work side-by-side with tenants to provide the best end-user experience.

The interests of the tenants translate into the interests of the residents and visitors. Commercial tenants have a whole new agenda when looking for property. Gone are the days of location-focused searches.

Workplaces need to attract and retain great talent. It requires creating an immersive, engaging, healthy and comfortable workspace. Achieve ESG goals. Maximize profits by reducing overhead costs. and above all, achieving environmental sustainability.

This is quite a wish list for anyone seeking commercial property. But in digital construction, achieving this list is almost effortless.

Looking ahead, through conversations with industry leaders, landlords and commercial tenants, we believe the future of commercial real estate is bright. This industry holds the power to transform livelihoods. Promote business and personal growth. Most importantly, support environmental sustainability.

These responsibilities are very important. However, we believe that with the right digital innovation and mindset, coupled with supportive guidance from industry experts, there is no reason why these responsibilities cannot be achieved.

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