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As a commercial real estate development professional, you face mounting challenges each day. Thankfully, these hurdles aren't unique to you and your company.
Let's look at the challenges faced by other real estate project teams and some of the recent CRE technology advancements to help provide direction on how to tackle common problems.
Current Challenges in the Commercial Real Estate Industry
With the right approach and a willingness to stay on top of CRE technology trends, you can turn challenges into opportunities to dominate your field. Let's begin by digging a bit deeper into today's most pressing hurdles.
The most common issues faced by others in your position include:
Challenging Economic Climate
Our economy has felt uncertain and unstable recently, from a virus sweeping the globe to a highly contested election cycle to potential military action to inflation woes. This affects everything from the price of milk to filling up your gas tank.
Forbes tells us that the economy is coming back, but unemployment is still up, many companies offer work from home, and people are relocating. These changes have a significant effect on the commercial real estate sector, particularly when it comes to leasing. Ken McElroy of MC Companies tells us that "...most stable companies will renew their leases but flock to smaller space requirements which will create vacancies in many areas."
Commercial properties can be especially sensitive to changes in the economy. Despite the ebb and flow of the current economy, all is not lost. Strategically building or renovating a commercial property to align with changing trends and targeting tenants is needed. This can be done by focusing on businesses that are resilient in the face of anticipated market changes. Focusing on the healthcare, food and beverage, and education industries is known to help your company weather the storms that are expected to come. Some financial experts call these industries "recession-proof." While there are certainly exceptions to recession-proof developments, the key is to understand the right next move, meaning risk mitigation.
There's always going to be a certain amount of risk when investing in real estate. While you can't completely eliminate risk, you can certainly reduce it. This is where the right CRE technology, specifically AI software, plays an essential role! The right software enables you to identify trends, challenges, and opportunities in real-time. It makes it possible to see what is happening across your commercial real estate portfolio. Simply put, this technology means you can lower the risk on your projects and get more predictable outcomes.
Old School vs. New Methodology
The transition from old to new can feel nerve-wracking and cumbersome. No, we don't mean old properties versus new options—we mean the old way of doing things compared to newer, often better alternatives! Chances are pretty good that your daily life looks nothing like it did a few years ago. Why would you work the same way, with the same tools, as when you entered the industry?
A few short years ago, almost no one considered the commercial real estate industry innovative and welcoming of advanced technology. Things are very different now. As a top CRE technology opportunity, AI will soon cease being a competitive advantage and become a must-have capability.
Today's best software does more than just give development teams time back in their days. New technology can also:
- Increase the credibility of your staffs' reports with automated reporting and centralized data
- Improve efficiency regarding high-level financial reporting
- Regain control over portfolios and proactively monitor project success
- Much more!
Changing Demographics Lead to Changing Needs
Technology isn't the only thing getting older; people are too. Industry insiders are saying that the baby boomer generation's desire to age outside of traditional nursing home facilities is shaking up commercial real estate. According to a Chicago Tribune story, baby boomers are opting to age in place. The "near-gridlock" is keeping about 1.6 million houses off the national market and leading to a rise in multi-family housing to meet the needs of young professionals and families.
If multi-family housing is your niche, millennials are searching for an entirely different living experience than generations in the past at their age. These people want multi-family living that also allows for a growing family and convenient access to their favorite spots in the community. These trends don't even account for people in the workforce who either work from home or have a hybrid working situation. The latest data tells us that 45% of full-time employees are working partly or fully remote. More internet cafes and shareable workspaces are needed now than ever before!
Who or what is your target? Do you know what the people you are developing for value in housing, shopping, retail, workspace, or retirement life? As you find out, you can adjust your sails accordingly. Whether it means adding on, remodeling, expanding, or building new commercial real estate space, the right technology will give you the insights you need to make the right decision. What you're looking for is a cloud-based intelligence platform that empowers real estate development teams to achieve easier, more predictable outcomes on the most complex projects.
CRE Technology can Help Alleviate Your Industry Burdens
It's time you increase revenue and performance while decreasing stress and miscommunication. Make today the day you learn more about how you can use new AI software to your benefit.
The Ultimate Guide to Commercial Real Estate Technology is available for download now. In this ebook, you will learn all about the latest, exciting new technology. It describes in further detail how teams like yours can leverage AI to add efficiencies and reduce risks. Download your copy today!
Tag(s): Real Estate Technology