Technology and innovation can help the commercial real estate industry offset the effects of a slowing economy and global competition. That’s the prediction from some industry experts, who suggest that companies that are willing to innovate will be better positioned to weather the current real estate slump.
The nation’s commercial real estate market continued its downward trend in the past three months, according to the latest PricewaterhouseCoopers Korpacz Real Estate Investor Survey. The report notes that “A weak economy, the credit disruption, job losses and a wide pricing gap” have vacancy rates climbing and property values dropping across much of the country, particularly in the office and mall sectors.
At several recent real estate conferences nationwide, the focus has been on software and automation technology. Proponents say these tools can help building owners and managers streamline operations and accounts, especially if they install “smart building products” such as wireless Internet, automated lighting and heat controls, and remote access to maintenance programs.
More and more tech companies are introducing products and services that capitalize on the commercial real estate industry’s need for maps and other forms of location-based information. Microsoft, for instance, recently introduced a Virtual Earth 3D program, which uses building models fashioned from photographs to create realistic virtual perspectives of buildings and neighborhoods. It’s designed to compete with the popular Google Earth.
Coldwell Banker Commercial incorporated Virtual Earth 3D in its revamped website earlier this year. The Parsippany, NJ-based firm, a subsidiary of Realogy Corp., wanted to enhance the functionality of its online mapping tool and provide its brokers and customers.
“Commercial real estate is a relationship-driven business,” says Tom O’Sullivan, Director of Marketing and Technology at Coldwell Banker Commercial. “It’s built on a lot of handshakes and personal interactions, but the industry as a whole has really lagged behind when it comes to technology.” O’Sullivan says the firm “wanted to create an online tool that would help our brokers blend traditional marketing with modern technology.”
Using the latest technology can give companies an edge. But Brian Boero, a partner with Oakland, CA-based 1000watt Consulting, says technology can also help real estate professionals cut operating costs in tough markets. He suggests real estate pros:
- Cut software expenses by using free web-based conference calling services and tools as Google Docs.
- Distribute property listings as widely as possible through web sites offering free or low-cost distribution.
- Build your reputation by blogging.
- Use digital forms and online document storage so you can retrieve documents even when you’re not in your office, saving paper, time and commuting expenses.
Durkan Consulting Group Inc. in West Chester, PA, a full web services firm that designs and creates custom web solutions, offers commercial real estate clients a “Due Diligence Webroom™” The secure, web-based document repository allows CRE pros to connect relevant parties to the webroom and track their activity. It gives potential investors access to information about specific investment opportunities, including leases, tax bills and licenses.
Dustin Gellman, CIO of Chicago-based Catylist Inc., a provider of marketing-based commercial information exchange (CIE) technology for commercial real estate communities and brokerage firms, says more commercial firms are doing targeted marketing.
As a result, customer relationship management (CRM) databases are increasingly popular. In addition, market research has become more affordable. By combining this market research with sophisticated software programs, industry professionals can build databases and refine them to their target markets.
He says it’s important to start with a marketing plan. “The first step should be the production of materials–digitize property information into spreadsheets, word documents, audio and/or video. Next, identify all the different places where the information can be distributed–for instance, online or through mail, blogs or audiocasts. Finally, identify the target audience, that is, the most likely purchasers or tenants, and how they can best be reached,” he explains.