Technological innovations have impacted the real estate industry, like anything else. At least two major trends are making a difference both in the scale and growth, namely the pushback against escalating real estate leasing and the drive to utilize new technological capacities with disrupting trends of real estate tech.
Remote Work Models Translate to Smaller Footprints of Traditional Office Space
New research by Regus Canada suggests that nearly half of the Canadian employees work from outside of their employers’ main offices. While the figure seems to be a little exaggerated with other sources like Randstad suggesting between 20 and 30 percent of the workplace, the fact the gig economy becomes a more accepted employment model across the world is beyond the shadow of a doubt.
What does this mean for the real estate industry? This reduces the amount of office space needed to accommodate employees. This trend is translating into more telecommuting employees. Health insurer Aetna has reduced its office space by more than 2 million square feet saving approximately $78 million annually. The company also closed its 1.3 million square foot building in Connecticut. New startups, like Airbnb, are disrupting the modes of real estate industry challenging hoteliers and maybe even making their business obsolete. These trends will automatically translate into lesser demand for office space and new modes of doing business where the focus is on efficiency.
Collaborative technologies Impact Real Estate Market
While the work is turning to telecommuting as an alternative to traditional modes of employment, remote work is not without shortfalls. “Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people and impromptu team meetings,” Jackie Reses, the head of Human Resources of Yahoo!, said.
Companies look for more innovative solutions that will also be cost-effective. Collaborative workplace organizations are emerging, such as WeWork and Workspring that are changing the commercial real estate dynamics. They offer shared office spaces for companies that lack the capital to invest in real estate or want to escape the unnecessary costs of the real estate, furniture, etc.
Real Estate Tech Disrupts the Market
The rise of smart buildings and further consolidation of real estate data on the web will change the role of a broker to advisers. It is expected that more and more owners will sidestep brokerage fees exposing the buyers to a more extensive array of properties and making it easier to cost-compare.
The way communication is accessed and managed has distorted what were once “normal business modes of real estate industry.” We expect to see a new platform in the industry with a complete new vision.
Forbes predicts an emerging third phase of real estate technology that “will include companies that leverage sensors and virtual reality to create smarter spaces, machine learning to standardize and draw insights from industry data and platforms to more efficiently manage transaction services as well as to design, manage and outfit physical space.”
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