Technology is reaching deeper into the commercial real estate domain, prompting a variety of relevant questions. These include: What is CREtech? How does it differ from PropTech? How do professionals in the real estate industry use CREtech? How can CREtech expand a broker’s market reach? And what are some new CREtech trends to look for? These are some common industry questions, and there are no simple answers for any of them.
What is CREtech?
CREtech is an abbreviation for Commercial Real Estate Technology. Technologies such as multiple listing services and the digitalization of public records represent a mere scratching of the surface when it comes to CREtech. There are also physical technologies like drones in use that are enhancing the commercial real estate business for both professionals and consumers. Properties that feature professional drone photography sell on average 50 percent faster and are viewed 118 percent more than listings that do not. Regarding the multiple listing services, more than 50 percent of buyers find a property through a multiple listing service before consulting a professional.
These statistics make it quite clear that the old saying “you eat with your eyes” holds true. Consumers want to be able to easily access information regarding properties and view them on their own time. The addition of professional photos and drone footage allows for consumers to better visualize the prospective property and get an idea of the potential pros and cons.
What is the difference between PropTech and CREtech?
Often the words are used interchangeably. Some contend PropTech is more of a European term, where CREtech is more popular in the United States. With CREtech’s obvious commercial bias, some feel that PropTech spans a spectrum covering both residential and commercial properties. On the other hand, CREtech is often considered to have a broader view in the sense that it covers all aspects of a transaction, such as any financial technologies involved, where PropTech is more limited in scope to site-specific technology. In any case, both terms are increasingly thrown about, and they have a wide overlap in definition.
How do professionals in the Real Estate Industry use CREtech?
Getting back to the topic of drones, they have made a major impact on the CRE industry, by allowing professionals and consumers alike to photograph and inspect properties in ways never done before. Through the aerial photography now available with drones, professionals and consumers can inspect buildings roofs, rooftop mechanical units, the building’s façade and countless other things. This is extremely beneficial as often the roofs of buildings are not easily accessible, if at all. This makes site searching a quicker and easier process, as customers can quickly determine if a property would meet a specific requirement, without wasting time arranging a meeting and traveling.
How can CREtech expand a broker’s reach?
Related to the opportunities drones present, virtual reality gives clients a chance to walk through a listed property without ever leaving the office. This technology can be used for both existing properties and projects that have yet to be built. As this technology can negate the need for an onsite visit by the client, brokers can cast a much wider net in searching for buyers. The search radius no longer needs to be limited to a tolerable driving distance to “kick the tires” of a given listing.
Unsurprisingly, the biggest tool that professionals use is the internet, and its never-ending list of multiple listing services. These platforms allow agents to professionally market their listing with all the pertinent information and reach potentially thousands of prospects daily. The most common platforms are Loopnet, Costar, MLS, Biproxi, Crexi, and 42Floors. Some of these are tailored for the consumer like Crexi, Loopnet and 42Floors, whereas a platform like Costar is designed to market to other real estate professionals.
What are some new CREtech trends to look for?
One emerging trend is the use of online auction websites like Ten-x, which is geared for owners who want to move their properties quickly. Owners list their property with Ten-x, which then casts a global net to their credible network of buyers and investors to help sell the property. The benefit of this to the buyers is the ability to bid on properties from the comfort of home, while also saving potentially large sums of money on desired properties.
Professionals are leaning on technology to get savvier about land use as well, turning to companies like MapYourProperty to get information on zoning and environmental sensitivities. Another company, Ecological Services and Markets Inc., develops models of ecosystems to better inform development decisions. These calculations include factors such as environmental data and local policy.
All of these examples illustrate the wide range of ways CREtech is affecting how commercial real estate professionals work today. And more ways are sure to follow.