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According to CBRE's U.S. Real Estate Market Outlook 2022, the industrial real estate sector will carry its strong momentum from 2021 throughout this year and beyond.
With the pandemic accelerating consumers' shift to online purchasing, more space to store and ship goods to consumers is needed. The problem is that demand for distribution centers has exceeded existing industrial real estate space. Fortunately for real estate developers, this presents an enormous opportunity.
With a surging market, building out facilities that are operable in a timely manner will be the key to capitalizing on this market trend for real estate developers and owners, and technology can aid these efforts – namely automation, AI, and data analytics. Let's take a look at the different ways real estate development software can help the sector's growth and help you seize this window of opportunity.
Real Estate Development Software Enables Delivery In Tight Project Windows
Not only is there a need for industrial space across the United States, but there's also a need for updated distribution centers that have modern capabilities such as automation baked into the building (more on that later).
According to CBRE, industrial occupiers have new expectations regarding industrial building functionality. This, combined with an extremely tight job market that has led to production issues, will expand automated technology and robotics in industrial real estate. Since automation will require building amenities found mostly in newly constructed facilities, this will increase the demand for first-generation facilities in 2022 and beyond.
The rise of new industrial development needs and high market demand will increase the likelihood of industrial project success. But how can you ensure your distribution center project goes off without a hitch and sets up a facility that'll satisfy demand?
Real estate development software is the key.
While real estate developers have dealt with poorly optimized software that fell short to spreadsheets for tracking cost and project progress, new technology has emerged in recent years, leading the charge to a more modern approach. Real estate development software automates project cost tracking by syncing with your existing email-based workflow, so there's less time spent inputting data and making decisions based on misentered numbers that can delay your project and hurt individual and project performance.
By cutting down on administrative work with automation, you're freeing up your team to make strategic decisions that lead to shorter development time and help you bring your facility to market faster. Real estate developers can use automation, AI, and data analytics to ensure projects meet profitable opportunities in the industrial sector.
The Need for Technological Innovation in Industrial Facilities
To keep up with the needs of industrial occupiers, facilities need to include modern capabilities. According to wealthmanagement.com, technology like drones, IoT capabilities, order processing analytics, excellent network connectivity, and more are all part of the movement towards "smart warehouses."
Many development teams may not have the experience working with vendors who provide such warehouse technology. It can be challenging to assess which vendor will help you increase returns on your last-mile distribution center while also meeting the needs of occupiers. You don't want to work with a vendor that will become a bottleneck, delay your project, and increase costs with unexpected change orders.
Tracking all of the vendors you receive proposals from and comparing bids is key to making the right decisions. This is, again, where real estate development software can benefit your team. Bid comparison technology allows you to store all of the data surrounding vendor procurement in one platform. It keeps the entire process transparent and centralized, so your team has all of the available cost data and communications to help make the right decision to aid your industrial development. Developers can optimize vendor choices with platform data and secure the best possible contracts.
Seize the Opportunity
According to Plante Moran, leasing activity is up 70% from the Q4 average observed pre-pandemic, and rent growth increased at a rate of 8% in Q4 2021 as the market witnessed increased demand with limited supply. While there's no telling how long this trend will last, it only benefits your industrial projects to work as efficiently as possible to meet demand.
Pre-development technology lets you centralize your project planning and help add transparency to the tasks needed to start projects on the right footing. With critical insights and centralized data, you can proactively set your project up to be delivered on schedule and under budget.
Make sure you capitalize on the demand and earn the returns your team deserves by updating your project delivery with newly optimized real estate development software. Northspyre, Northspyre Plan, and Northspyre Plan+ will help maximize your industrial development from the start all the way through project completion. Ditch the spreadsheets and take a proactive approach to project delivery with automation, AI, and data analytics.
Are you looking to learn more about all commercial real estate technologies? Access The Ultimate Guide to Commercial Real Estate Technology here.
Tag(s): Real Estate Technology
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