Jeri Frank is the co-founder and CEO of STRATAPHOLIAa software solution for companies that own and manage real estate with NNN leases.
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Of all the challenges facing the commercial real estate industry today, there are a few big ones that loom above the rest. Although the topic of climate change and sustainability has been making headlines for decades, it is now finally coming to the fore. And of course the global supply chain crises, material shortages and labor shortages continue to have a huge impact as well.
To solve these complicated problems, we need to use all available resources and information. By embracing technology and innovation, we can meet our challenges and create a better future for the real estate industry.
Climate change and the impact on technology
First, let’s talk about climate technology and how it affects the real estate industry. Nearly half of all greenhouse gas emissions are generated by real estate. About 27% of annual CO2 emissions from construction activities and another 20% comes from building materials, construction and other construction-related causes. Concrete, steel and aluminum for new construction in particular make a major contribution to CO2 emissions. Existing buildings contribute to the climate crisis through a lack of energy efficiency. While upgrades are available, many real estate developers and owners are slow to embrace sustainable solutions.
The climate crisis can no longer be ignored. But with this threat comes an opportunity for change. As CRE professionals, we can make impactful decisions and invest in technology that will drive change. We can convert existing buildings for a more energy-efficient future, and we can develop new buildings that use sustainable building practices and materials. This is one area where we really have the power to change the future by reducing CO2 emissions. From proptech software development to innovative new building materials, technology can make it all possible.
Addressing concerns now instead of later
If our goal is to create a more environmentally friendly future for our industry, it is imperative that we step up our efforts now, not later. Today’s buildings will still be there in a few decades, and your energy-efficient choices will be even more valuable in the future than they are today. The world is working towards a net-zero future with goals to eliminate all carbon emissions from the built environment. By reducing future energy bills and meeting rising efficiency standards, you increase the attractiveness of your properties and prepare for the future.
Aside from the climate, the supply chain crisis is the other major challenge for commercial real estate. Material shortages and labor shortages made it challenging to develop new buildings and renovate older buildings. This is especially difficult because developers and property owners have been slow to embrace technologies such as deep construction analysis and management software. This reluctance to adopt valuable technology has helped many companies that develop and operate commercial real estate to struggle with supply constraints. Rather than being unprepared and unable to deal with the tightness caused by supply chain issues, technology makes it possible to collect and act on countless data points.
Technology can provide property owners and developers with the data they need to make sound decisions at all stages of a building’s life cycle. When real estate owners and developers use today’s technology to make their decisions, everyone from owners to investors to consumers can benefit. Anyone considering investing in a real estate fund should ask for transparency about the company’s technology strategy. Do they rely on their ‘gut feeling’ or do they collect robust data and use it for decisions such as site selection, design and asset management? What data points do they collect and how do they plan to use those facts to make future decisions?
Innovations to lead the way
There are innovative companies and entrepreneurs who are working on a better and brighter future for the commercial real estate sector. We must seek out these companies and individuals, invest in them and give them the recognition and support they need to spread their ideas. We should develop innovative technologies that solve the problems we face. When making decisions, look beyond your individual role and look ahead to the future of the industry. In this way, each of us can do our part to accelerate the innovation and technology that enable a brighter future.
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Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.