What is Replacement Cost Value Insurance Coverage?
What is replacement cost value? Learn what replacement cost value is, how it may relate to your insurance policy, and how it compares to other insurance options.
Technology is rapidly advancing and new innovations coming to the forefront are impacting many industries, including commercial real estate.
The latest breakthrough technologies are enabling real estate professionals to handle their daily workload more efficiently, using advanced and secure methods for tasks such as analyzing data, marketing properties, and making transactions.
The following are some of the technological tools making their way toward wider use within the commercial real estate sector:
Artificial intelligence (AI) is a technology applied for everyday functions such as giving voice commands to a smartphone. It’s disrupting the real estate industry as a tool that can be used for conducting a wide variety of tasks, from analyzing data to more targeted marketing.
For example, real estate professionals can use AI to help quickly gather and analyze large amounts of data on a particular market, helping them make better investment decisions. It does this because it has the ability of a machine or computer to imitate human intelligence by learning, reasoning and learning from past experience. AI also can be used to draw from years of past data to forecast how a specific property’s value will change over the next few years.
The technology can assist real estate executives with building operations by culling data from sources such as sensors and a property’s operations team to monitor building systems. This provides valuable information on a property’s health and efficiency.
AI also improves marketing efforts. The technology helps real estate brokerages cater to potential tenants by tailoring property searches to match them with specific needs, such as allowing pets or being in close proximity to transportation. The technology’s data-gathering abilities also make advertising more effective by tracking ads and targeting them to a more focused group.
Additionally, AI can aid real estate professionals in more basic tasks such as sending emails and making phone calls.
Blockchain, a digital ledger first used as a database for verifying cryptocurrency transactions, is used in commercial real estate as a way to record and process transactions. It is a secure and transparent way to digitally store information by recording deals and information viewable by a certain network, which must approve any changes.
Blockchain technology also can help firms rapidly verify information on the many financial and other documents typically submitted to complete a real estate transaction.
Further, real estate professionals can use blockchain to place all historical property records, such as ownership history, in one place to improve accuracy.
Virtual reality is allowing potential buyers or tenants to tour space without ever physically walking inside it. Users can view the property from anywhere using a mobile device, saving time by reducing the need to schedule appointments to visit properties.
The Internet of Things (IoT) allows web-enabled devices to collect and send data over a network. It has many uses in commercial real estate.
For example, connecting systems within a building can provide information on how its utilities, such as lighting and HVAC systems, are being used. This can give building owners insight into the most efficient way to maintain the property.
Connecting building systems is also a way to monitor the property and immediately notify the property manager if something is not working. Further, IoT can improve the tenant experience by offering services such as indicating when parking spaces are available or automatically adjusting room temperature.
Autonomous vehicles are not yet readily available, but their expected arrival will bring with it new options for city and building planning. For example, the vehicles might be an attractive option for commuters, reducing the need to stick to the common practice of building near public transportation.
The vehicles also are projected to possibly be used as a taxi service, which would lessen the need for parking structures. This could lead to the redevelopment of existing lots. Less property reserved for parking also could become increased space for multifamily or other development.
More developers are being conscientious about reducing a building’s energy consumption with the goal of creating a net-zero building. This means the building creates as much energy as it consumes. With options such as solar panels, solar water heating, wind turbines, shading devices, and radiant cooling systems, developers can more easily work toward this goal.
The commercial real estate industry is historically slow to adopt new technologies, but incorporating the latest technological advances can provide valuable ways for real estate professionals to operate more efficiently while also staying ahead of the competition.
Ryan Letzeiser is the CEO & Co-Founder of Obie, a CRE tech firm that offers a free portfolio management platform for commercial and multi-family real estate. The company also offers tailored and competitive property insurance products. Obie is a Top 100 Finalist of the Chicago Innovation Awards. In addition, Ryan has years of experience in commercial real estate finance, dealing in the acquisition and disposition of institutional-grade commercial real estate assets ranging from apartments to retail and office.