3 Ways PropTech is Revolutionizing the CRE Industry

3 Ways PropTech is Revolutionizing the CRE Industry

The commercial real estate industry has historically been associated with seedy brokers, false information, and limited options. Today, however, tech startups and digital tools for real estate (dubbed “PropTech”) are revolutionizing practices and helping to change consumer attitudes towards CRE. The resulting changes are simplifying commercial real estate processes and allowing growing businesses to find the right space.

Transparency

Previously, there was limited incentive for CRE brokers to be open, as clients looking for office space didn’t have the tools to conduct their own research and thus relied fully on broker knowledge. Consequently, brokers had the motivation to act self-servingly.

With PropTech, anyone can access a holistic picture of what’s on the market and is therefore empowered to explore all options. Data transparency levels the playing field so that all players enter into a deal knowing the same information, meaning that clients are able to get a fairer price. Because clients are becoming more informed, firms that value openness and honesty have a significant competitive advantage.

Organization

With the staggering amount of information at their fingertips, it’s crucial for brokers to stay organized and efficient. Pen and paper no longer cut it — brokers and landlords now use PropTech tools (for example, VTS and CompStak) to optimize and streamline their workflows. They can organize listings and closely track each step of a deal, which allows them to better derive critical insights, calculate portfolio risks, and take meaningful action. By automating inventory and deal management, firms and brokers can spend their time focusing on their clients.

PropTech is also changing the way decisions are made. VTS and CompStak, for example, have business intelligence functionalities that brokers can use to strategically generate leads and analyze market trends. 


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PropTech tools don’t only serve firms and brokers, however — there are tools for all actors in the CRE industry. Systems like NANTUM aid building owners in getting real-time information (for example, on occupancy, water usage, etc.) on the buildings in their portfolio. This is key in reducing unnecessary expenses and improving operational efficiency. 

Flexible Solutions

Startups often can’t commit to the standard 5-10 year office lease term because of their inability to accurately forecast growth. A variety of PropTech services offer businesses the ability to rent space for months, weeks, or even hours at a time; this addresses a wide variety of needs, from company off-sites to pop-up events. And for startups who don’t want to invest in furnishings only to have their needs change at a moment’s notice, turnkey office space provides a convenient option.

Some growing companies don’t necessarily need (or have the budget for) an entire office, but still want a space to congregate. Companies like PivotDesk provide an opportunity for these smaller businesses to rent desks from businesses with extra space. Not only is this a financial win-win, but it also creates a unique working environment full of potential for creative exchanges, networking, and partnerships. The availability of diverse office solutions has assisted in breaking down the barriers to entry faced by small businesses, fostering innovation and entrepreneurship.

Overall, the benefits of PropTech work in tandem for CRE companies and growing businesses, creating a fairer, more efficient, and more comprehensive office search process for all.

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Maya Rajan
Maya Rajan is with SquareFoot, a new kind of commercial real estate company that understands the needs of growing companies and delivers the most flexible, transparent experience on the market.
Maya Rajan

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