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The Real Estate Industry’s Technological Evolution

Chanel Di Blasi
Associate
Crosbie Gliner Schiffman Southard & Swanson (CGS3)
San Diego

The real estate sector is not immune to the digital revolution, which is impacting many industries’ services and productivity levels.   This ongoing technological shift is transforming the real estate industry, resulting in the plausible idea that many traditional forms of service may become obsolete.  This idea is led by the belief that the digital transformation of the real estate industry is driving efficiency and improving transparency, even resulting in the portmanteau, “Proptech,” a blending of the words property and technology. 

The digital revolution is not going anywhere – it’s growing and evolving, creating  remarkable change and opportunity.  For real estate professionals – and other related industries – it is time to embrace the change and learn how to use these powerful tools to gain a competitive edge. 

A young, tech-oriented generation has fully embraced this digital revolution  – from artificial intelligence and cloud computing to mobile solutions and data analytics – resulting in more and more real estate companies’ adaptation of new and more sophisticated technologies to gain a competitive edge. 

There are several areas wherein technology is being used in the real estate industry. Below is a non-exhaustive list of transformative uses:

Proptech Platforms: Falling firmly under the proptech umbrella are well-known platforms like Zillow and Redfin and property management platforms such as Appfolio, which help potential renters and homeowners finetune their property search –as well as provide closing tools and financing software services. These hugely popular digital platforms may help increase listings’ accuracy and transparency, giving potential buyers a more in-depth look at a property all from their cell phones.

Technology and transactions: A multitude of digital tools and platforms have streamlined the often complex and paperwork-heavy transaction process. A few of these new methods include electronic signatures, online document management systems and secure payment gateways – all minimizing in-person meetings to complete often excessive amounts of paperwork and other administrative red tape.

Artificial intelligence (AI):  Increasingly mainstream yet controversial, AI has evolved into a powerful tool for real estate professionals, enabling them to analyze market conditions, evaluate property values and identify the optimum investment opportunities.  AI is a resource for many real estate-related professionals including architects, who use the technology to optimize design. Additionally, AI can automate repetitive routine work such as listing descriptions and property searches – allowing real estate professionals to concentrate on more productive activities. 

Chatbots: A form of AI, chatbots are designed to simulate conversation, and can respond to inquiries without live human help. If more detailed assistance is needed, chatbots can redirect clients to a live human counterpart. Chatbots allow real estate 

professionals to spend less time responding to routine intake and frequently asked questions, while providing clients with quick responses. 

Computer vision: An element of AI which enables computers to glean information from images and videos, is being used to enhance accuracy of property listings, providing potential buyers with more comprehensive information. 

Data analytics: The analyzing of raw data resulting in conclusions on industry trends, pricing dynamics and investment opportunities, data analytics is emerging as a vital tool in the commercial real estate industry – with potential to add substantial value to new development projects.   By harnessing the power of predictive analytics, businesses can make more informed decisions, mitigate risk, and optimize their strategies to remain a top player in today’s competitive market.

Property management: Owners and managers can now leverage digital platforms to manage properties more effectively and efficiently – using new technology tools, mobile applications and software for rent collection, tenant correspondence, maintenance, document sharing and more – all leading to a reduction in operating costs and improved tenant satisfaction. 

Real estate investment platforms: These online platforms enable investors to pool their money to invest in a diversity of real estate projects – democratizing access to real estate investment by allowing smaller investors access to large-scale projects that were once only privy to institutional investors. Widening the investment pool, these platforms also enable developers to raise capital. 

Construction technologies: Amid soaring costs and plummeting constructing starts, new construction technologies are creating a more efficient and cost-effective approach in the development of real property. From drone technology and building information modeling (a digital representation of a projects’ characteristics) to utilizing technology to   advance sustainability and autonomous machinery, technological advances in the construction industry are soaring. Additionally, construction is one of the top growing industries for drone adoption and predicted to become a $28.3 billion market. Drones can help with site inspections, pre-construction planning, architecture and design, and oversee real time construction progress.

Real estate robotics: While still in its early stages, robotics is poised to be an important player in the real estate industry, and can handle tasks such as property inspections, showing property to prospective buyers and renters – and even reduce crime by providing security services. 

Virtual and augmented reality: Many companies are using virtual and augmented realty technologies to streamline the leasing process – using immersive 3D virtual tours for prospective tenants. In a similar vein, augmented reality  technology allows architects and developers to visualize proposed projects in real-world environments.

Smart buildings: A smart building utilizes its intelligence to gather data from user devices, sensors, systems, and services on the premises. The Internet of Things (IoT), AI and cloud technologies have all converged to make buildings smarter – increasing digitization and decreasing energy consumption – transforming how buildings are operated and maintained. These cutting-edge technologies allow remote monitoring and control of a variety of building systems – including HVAC, lighting, security, and energy management – cutting overhead costs, saving energy and increasing ease and efficiency.

Mobile applications (apps): Today, consumers can do everything with one tap on their smart phone – from buying groceries to purchasing a concert ticket – so it is not surprising that real estate investors and home shoppers are increasingly buying, selling and browsing for properties using various mobile apps. While mobile apps are not a new trend in real estate, with the emergence of new development tools and frameworks they are more widespread and capable than ever. 

Blockchain technology: Blockchain is an advanced database mechanism that allows transparent information sharing within a business network and is poised to be a game changer in the commercial real estate sector by making transactions faster and cheaper. While known for their cryptocurrency systems, blockchains can be used to make data in any industry unalterable. Blockchain technology also minimizes the chance of fraud – eliminating the necessity for intermediaries such as title companies. 

Not unlike the Industrial Revolution and other obsolete industries throughout history, the digital revolution in the real estate industry will result in professionals having to pivot and reinvent their services in a changing industry. Part of the pivot will require real estate professionals to look at the digital advancements as a tool to provide streamlined services rather than viewing the digital advancements as an enemy of the industry. Most of the advancements to date allow for professionals to vastly reduce overhead costs and time, to aid in accuracy, and to execute services remotely without the need to physically be present.

The digital revolution is not going anywhere – it’s growing and evolving, creating  remarkable change and opportunity.  For real estate professionals – and other related industries – it is time to embrace the change and learn how to use these powerful tools to gain a competitive edge.

Associate at Crosbie Gliner Schiffman Southard & Swanson (CGS3), San Diego.

Chanel Di Blasi/Bio

 

Chanel Di Blasi is an attorney with Crosbie Gliner Schiffman Southard & Swanson LLP (CGS3). With a strong background in a broad range of landlord-tenant and business real estate disciplines, she helps landlords, property owners, and developers navigate the dense maze of California regulations, with an emphasis on residential and commercial landlord-tenant disputes, leasing, contracts, affordable housing, construction, and compliance. 

Active in the community, she is a mentor for Big Brothers Big Sisters, is involved with the SDSU Alumni association and is a member of the San Diego County Bar Association and the Lawyers Club of San Diego.

She holds a J.D. from Thomas Jefferson School of Law and a Bachelor of Science degree in television, film and news media production from San Diego State University.

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