Commercial Real Estate brokers who work in the transactional market have ten great years ahead of them. Tech is flying at the industry fast and furious, and early adopters are taking advantage of their Beta Tester status. However, those early adopters are more often than not, the letter brands, CBRE, JLL, CW, etc. Global firms whose marketing and tech dollars can be pulled from all their income streams, not just those that are purely based in brokerage. These next ten years will be a lot of fun and super profitable for beta testers. Different startups will create and disperse hundreds of technologies, some will fail and others will grow and dominate its market segment. The beta AB testers will determine which product rises to the top. It will be a lot of fun and everyone using tech will continue to make a lot of money while tech works itself out.
This is going to happen exponentially faster in major markets than out in the suburbs and tertiary markets. “Country Cousins” will crawl toward Tech adoption in the transactional brokerage world. It is far more difficult to scale information in suburban markets with just a few million square feet of any one product type. Brokers and investors tend to be generalists and many local real estate owners are the companies that occupy the buildings. Therefore, marketing is the inevitable gateway drug to tech and affordability will be the key factor in speed to adaption.
To properly prognosticate about tech disruption it’s paramount to note that brokers working in the small corners of the world are going to follow a different path to total tech meltdown than those in the cities where WeWork is a landlord and will develop all the Deep Learning it can to match tenants to its spaces before on the street brokers ever hear from someone who clicked on a WeWork office page in the East Village and found themselves located in a sister site in Poughkeepsie.
Within three years, across the board, property discovery is going to be handled by A.I. (Artificial Intelligence). Any independent, secondary market brokerage firm capable of developing its own in-house A.I. application to search 8-10 disparate property and public information databases and match prospects to properties, similar to what Ten-X does on its site, will be making the big leap from a brokerage company to a technology company.
The other not quite ready for prime time brokerage technology that will immediately upend the world of the real estate consultant, the broker consultant and the property manager is data extraction. Gone (in 24- 36 months) are the days of reading and writing lease summaries or abstracts. Gone are the days of human eyes tracking rental payments (already nearly disappeared from residential rental management offices), Gone are the side by side comparisons of RFP’s. Deep Learning is going to kick the brokers’ ass once perfected and this, for many, should be of grave concern. Not that the broker or consultant won’t still be needed, but with those tasks gone, those transaction fiends who bill hourly for paper shuffling will need to find another way.
In ten years, the nature of transactions will be changed from start to finish. In some cases, brokers will be able to control their role. Whoever grabs onto machine learning now will see their bottom line explode. Those who align themselves with construction firms who have gone digital will thrive. Why? Because those firms are going to be able to streamline their building process, bring the costs down and be in a position to buy land sites which are out of financial reach for more traditional spec builders. Bring 3D printing into the mix and construction in the year 2032 is going to look very different than it does today. I wouldn’t want to be one of those big brokerage house project management, tenant fit-up liaisons in ten years. These days, they act as a buffer between landlord and tenant for calendared items, punch lists, and timeline management. With the proliferation of drones and robots, the only “eyes on” for day to day construction operation concerns will be robotic. Are land surveyors already feeling the pinch of Krespy and their topographical mapping capabilities?
While the industry works toward tech adoption, early adapting brokers will thrive, but in ten years, it’s going to be a different world for the big city broker and their suburban small market counterparts.
LinkedIn Kristin Geenty SIOR
Website The Geenty Group Realtors