Technology is evolving at what sometimes feels like an accelerating pace. The entire NASA organization in 1969 did not have as much processing power as an iPhone 7 does today.
We’ve gone from the (at the time) cutting-edge 1G world of “brick phones” in 1981 to having discussions about widespread 5G implementation – and beyond.
At CRE.Converge 2018, Dale Dekker, AIA, AICP, principal, Dekker/Perich/Sabatini Ltd., led a panel about current trends and technology, what’s on the horizon, and what these trends and tech mean for commercial real estate.
We may be aware of or actively use smart sensors in our daily lives. We can track our daily number of steps using a smart watch, or walk into an empty office only to have the lights turn on automatically once sensors recognize that the space is no longer vacant. It’s likely that in the future, smart sensors will be embedded in everything around us, from our sneakers to our eyeglasses. By some estimates, Dekker said, there will be 45 trillion sensors worldwide by 2035.
Smart sensors have the capability of monitoring and collecting data for analysis, Dekker explained. They combine a sensing element with processing capabilities provided by a microprocessor. The “internet of things” can connect interrelated computing devices. All of this technology helps to power the rise of smart cities.
Juniper Research defines a smart city as “an urban ecosystem that places emphasis on the use of digital technology, shared knowledge and cohesive processes to underpin citizen benefits in vectors such as mobility, public safety, health and productivity.” The point of a smart city, after all, is not the inherent value of the tech tools or data itself, as TechRepublic notes, but how those can be used to improve the quality of life of the city’s residents and visitors.
How can existing buildings – about half of which were constructed before 1980 – become integrated with smart sensors? It will be a huge task, Dekker noted, but an imperative one for the commercial real estate industry to address in the coming years. Commercial real estate is shifting from an asset to a service, and smart buildings will become the expectation rather than the exception.
To illustrate blockchain, Greg Ceton, director of strategic initiatives and special projects for the Construction Specifications Institute, shared this hypothetical situation:
John and Mary are coworkers. They agreed that Mary will sell John her sack lunch for $20. It’s a fairly standard transaction.
Now, let’s add the twist that they agreed to this transaction in front of other people. This means that there were witnesses to the transaction.
This example contains a central tenet of blockchain, Ceton said: crowd-sourced verification that a transaction took place.
Blockchain is built on two technologies, he explained: peer-to-peer sharing and encryption. In a blockchain, peer-to-peer sharing provides the “witnesses,” called nodes. Encryption provides the digital thumbprint that confirms data hasn’t changed, and makes the details of any transaction or record as confidential as needed, Ceton said. Each block is linked together into a chain. The structure is relatively simple, he said; there are only a few elements to each block.
Real estate is perfect for blockchain because it’s all about sharing information (MLS data, title records, etc.), and that’s what blockchain does, Ceton said.
Blockchain functions for real estate:
- Provides a common database accessible to all parties.
- There is no trust needed between any of the agreement’s participants. Currently, for example, a company must place its trust in the government office that records and stores its building’s title.
- It disintermediates administrative middlefolks.
- Enables smart contracts to self-execute triggered by activities.
“For data geeks, it’s a really great time to be alive,” announced Charles Rath, CEO of RS21. “We’re starting to experience big data in all of our lives.” When Netflix first deployed an algorithm that showed recommendations of what users would want to watch based on their prior media selections, Rath said, it “creeped [him] out.” Now, he said that he has come to rely on it.
The appetite for big data has increased like never before. For a typical Fortune 1000 company, Rath said, a 10 percent increase in data use can result in more than $65 million increase in net income.
Making use of big data can help commercial real estate professionals optimize site selection as well as use and efficiency. Some organizations don’t make use of data because of obstacles including lack of expertise, lack of tools, bad data or poorly visualized data, Rath said. However, these obstacles need to be overcome.
“Big data analytics is no longer a luxury in commercial real estate,” Rath said, “It’s a strategic necessity.”
Marie Ruff is Communications Senior Manager at NAIOP.