Posted on January 16, 2019
Written by Joan Woodard
Commercial real estate is in the midst of a digital revolution, and some of the biggest upheavals will affect professionals who work closely with property owners and tenants.
Technological innovation is accelerating in the commercial real estate space, and it has the potential to disrupt a large segment of the brokerage business.
In 2017, according to CREtech, more than $5 billion was spent on developing and implementing real estate-related technology, and there are more than 3,000 developers working on real estate software systems in the United States alone. Blockchain, artificial intelligence, machine learning and predictive analytics will change the way real estate is leased, sold, sourced and valued (see more on page 52). These technologies will improve direct interaction between property owners and tenants and challenge the very need for a broker to be involved in many lease transactions, significantly reducing commissionable activity.
The residential real estate space shows the two directions technological innovation can take. The first direction is digital technology that empowers agents. The second direction is coming along more slowly, but it is where technology displaces agents by empowering sellers and buyers to do most, if not all, the sourcing, market comparisons, showing, negotiation and processing of documentation involved in a transaction.