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Seeing Pros and Cons in “Digitization” of Real Estate

A future-focused Urban Leaders Summit discussion in Frankfurt in May on embracing new technology raised just as many questions as it answered.

Many German business leaders have been fretting about what they call Industry 4.0—the sweeping changes created by machine learning, automation, the “internet of things,” and big data—innovations they categorize under the umbrella of “digitization.” The waves of change triggered by this digital shift are going to be felt for generations to come, as more and more jobs are capable of being done by machines. Will we need humans at all? Will we create a superintelligence that finds us an unnecessary burden?

But going back to the present, Sascha Friesike, professor of digital innovation at VU Universität Amsterdam, wondered why urbanization continues to grow even as we increasingly decentralize work. If jobs can be done from anywhere, why do we still largely choose to move to cities?

Klaus Dederichs of Drees & Sommer was wary about the rush to incorporate the internet of things into properties. Tests have shown that the current generation of smart devices, which usually operate over wi-fi, is easy to hack. “They are compromising buildings’ cybersecurity,” he said. “What if terrorists attack smart buildings rather than drive into crowds?”

But Dederichs did also note some potential for buildings to get smarter, optimizing energy use being one of them. Building information modeling (BIM) is another promising field in the world of smart buildings. This digitizing of the planning, construction, and maintenance of buildings increases efficiency and extends the life of a project. Thus far, BIM has not seen huge adoption rates in Germany; the industry is hesitant largely because of the financial investments and the additional training needed for workers.

Blockchain came up in practically every discussion, as did artificial intelligence. It is difficult to find the middle ground between viral anxiety and tech evangelism, said Thomas Metzinger of the Johannes Gutenberg-Universität Mainz. “What do we do when a smart city crashes? And it will crash. We need graceful degradation,” referring a web design term that refers to designing a project to continue to function even if some features fail.

“We aren’t going to build houses that aren’t future-proof anymore,” said Martin Rodeck of EDGE Technologies, owned by OVG Real Estate. You cannot risk a new building being outdated within five years. And you should not jump on a trend like blockchain or virtual reality just because everyone else is doing it—you need to focus on how to solve the problem at hand.

Read more on Urban Land Institute

 

Nine Things To Keep In Mind About Blockchain In Real Estate

Blockchain is the next frontier of the real estate market, making inroads at a fast clip.

The use of the technology will make it possible to have transparent transactions that sellers and buyers will benefit from. From real-time ledgers to full-on shared databases and processes, blockchain throws the doors wide open with possibilities in real estate. However, does it come at a cost?

Some agents think it might, while others are embracing it with abandon. Yet, there is much to learn and consider before adopting blockchain into your business processes.

Nine members of Forbes Real Estate Council share the thing that everyone in their profession needs to know in order to safely and efficiently begin adopting blockchain or the tools it enables.

Read more from Forbes

 

 

AI is Changing the CRE Game: Here’s 5 Ways

CRE industry leaders using artificial intelligence to analyze and apply data to decision making saw productivity increase of up to 6% compared to competitors.

In a study by Harvard Business Review about the revolution of big data as a management tool, it was found that artificial intelligence used to analyze and apply data to decision making by those at the top of the CRE industry saw an increase of up to 6% in productivity compared to their competitors.

AI is changing the CRE game in several different ways and in turn, having an impact on all CRE sectors in different ways.

Read more from NAI Global

 

 

Three Reasons Commercial Real Estate Professionals Should Be More Open To Tech

The real estate industry isn’t exactly known for being receptive to new technology.

Many in the industry view technology as unnecessary, as countless people have built real estate empires and made untold millions from hammering the phones. Today, though, it’s getting harder and harder to compete in real estate without technology. In particular, there are three distinct advantages of technology that should have real estate professionals more open to adopting new developments.

Read more from Forbes

Smart tech becoming key to attracting renters

Tenants want more tech in their apartments and multifamily landlords and developers are putting in the technology to meet that demand.

While building-wide WiFi, electric chargers and rooftop decks remain popular among tenants, smart building technology is becoming the new “it” amenity.

From package delivery lockers to smart locks, landlords are turning to tech-enabled amenities to woo tenants who are willing to pay more for these features.

In a Schlage and Wakefield Research survey of 1,000 U.S. multifamily renters, 86% of millennials are willing to pay one-fifth more for a smart apartment. Gen Y renters are 61% more likely to rent a unit because of electronic access such as keyless entry, and 55% are willing to pay more in rent for a unit with a smart lock.

Smart lock systems, such as Latch, Kwikset, August Home, Schlage and Yale Locks & Hardware, are being installed in existing and new units throughout the country.

Read more from Bisnow

Google scoops up another downtown San Jose transit village property

SAN JOSE — The shape and scope of Google’s game-changing push to craft a transit-oriented village in downtown San Jose is starting to come into clear focus following recent purchases south of Diridon station by the search giant’s development ally.

Mountain View-based Google’s realty partner, Trammell Crow, bought a property on Oct. 31 at 691 W. San Carlos St. just west of South Montgomery Street, a site that consists of a house and land adjacent to the residence, Santa Clara County property documents show.

Read more from the Mercury News

WeWork will open a new SF HQ in the Salesforce Tower

WeWork has money to blow, so the $20 billion startup is putting some of it toward a second headquarters — this time in San Francisco instead of New York, Recode reports. The plan is to locate the HQ in the new 61-floor Salesforce Tower, which is slated to open next year.

WeWork will lease out three floors in the “Bay” area of the tower, which Salesforce Tower describes as “the best vistas to the City, Golden Gate and Bay Bridges.” The plan is for those three floors to serve as both a headquarters for the company’s employees and co-working spaces for WeWork customers.

Read more from TechCrunch

Why CRE will look totally different in 5 years

Thankfully, we don’t have to talk anymore about how the commercial real estate industry doesn’t use technology. That conversation is officially over. And now that CRE has adopted technology, we’re in the midst of a massive change.

The CRE industry will look completely different in the next five years, and there are a few key factors leading to that transformation.

Read more from Buildout

CoStar Market Insights: San Francisco/East Bay Ranks Top for Meeting Amazon’s HQ2 Search Requirements

The San Francisco-Oakland-East Bay metro area came out on top in a ranking of more than 50 major U.S. metros that fit Amazon’s requirements and preferences for locating a second national headquarters. 

An interesting possibility could be the Oakland Coliseum Complex. All three of the professional teams currently using the facility have plans to leave within the next few years leaving the 130-acre property with no set future.

Read more from CoStar