Technology is a core part of commercial real estate lending, development, leasing, selling and buying. Today, it’s hard to imagine any of these sectors functioning without things like online platforms and databases, design software, or data management programs. Technology is used to connect buyers and sellers of real estate, to collect and analyze information about how borrowers or assets will perform, to design building systems, etc. In this way, the adoption of technology is improving many underwriting, investment, and design processes, and most industry players understand that it is critical to staying competitive in this space.
However, fewer people recognize how technology affects brick-and-mortar buildings. But in fact, it can directly impact the value proposition of certain assets! Because of this, technology should be an important consideration in how investors, lenders and brokers evaluate deals. How so?
Tech Changing How We Use Real Estate
Technology has taken over many jobs, but it is also creating a risk of obsolescence for certain building types. That’s because technology is changing how we use real estate.
For example, that advent of online shopping changed how we interacted with physical shops. It reduced the demand for big-box stores, replacing them with smaller “display” stores in prime areas. At the same time, the demand for distribution centers to process all those online orders shot up.
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