That said, here are a few technology trends we are seeing that specifically address the environmental ones just mentioned.
The Office Building of 2030
- IoT-connected heat pumps boost efficiency and reduce emissions. Conventional HVAC systems are inefficient and typically rely on fossil fuels like heating oils or natural gas boilers to supply heat in the winter. A heat pump is a relatively new HVAC device that is energy-efficient and provides electrified heating in the winter. These IoT sensors can further improve efficiency by introducing artificial intelligence (AI) models that actively predict where and when heating or cooling is needed, based on historical trends. AI offers the opportunity to turn HVAC into a proactive rather than reactive system, reducing the upkeep needed by building managers.
- Virtual power plants offer a new revenue stream. Heat pumps with IoT sensors can allow building managers to increase or decrease HVAC energy use as needed. In addition, buildings can use local energy-generating resources like rooftop solar panels or battery storage systems to supply power back to the power grid during periods of peak demand. As a result, buildings themselves can act as a “virtual power plant” (VPP), reacting to periods of high demand on the power grid. VPPs can become a significant source of revenue for building managers.
- Smart glass reduces temperature control needs and increases privacy. More than a quarter of heating and cooling for buildings goes out the window—literally. Smart glass tackles this challenge by changing the level of tint, or how much light can pass through a window.
- AI-assisted occupancy and security tech keeps occupants safe. Advances in AI and computing power have allowed researchers to better detect and classify images using a technique known as computer vision. Computer vision is the processing of identifying and analyzing visual data with a computer the same way that humans do. An AI algorithm will typically rely on thousands of images that have been manually classified by researchers to teach a computer how to interpret visual information.
- Digital twins help facilities’ management. A digital twin is a virtual representation of a real object or set of objects, constructed with plenty of real-world data collected from IoT sensors. After an initial model is created, digital twins undergo simulations to provide performance feedback under various scenarios, without having to test the actual system. The insights gained from digital twins are used to improve the real object, and then new data is fed into the digital twin model. For example, a manager overseeing an office building’s HVAC system may want to know how much energy savings they’ll see by upgrading to a new heat pump. IoT sensors are already in place to monitor room conditions like temperature and humidity, as well as the energy consumption of the current HVAC system. Using IoT data and some 3D modeling, the building manager can construct a digital twin of the office building and run heat pump simulations on the digital twins to determine the potential benefits of installing heat pump tech.
Modular Construction
Modular construction is a method that involves manufacturing building components off-site and then assembling them on location. This approach dramatically reduces construction time, labor costs, and waste.
Improved design and customization options:
- Use of advanced design software and manufacturing techniques
- Allows for diverse architectural styles and building types
- Enhances the aesthetic appeal of modular buildings
Increased speed and efficiency:
- Parallel on-site and off-site construction processes
- Reduces project timelines and labor costs
- Minimizes disruptions and environmental impact at the construction site
Enhanced sustainability and eco-friendliness:
- Utilizes resource-efficient materials and construction methods
- Minimizes waste generation during manufacturing and assembly
- Encourages energy-efficient and green building practices
Building Information Modeling (BIM)
BIM technology has made significant strides in recent years, enabling architects, engineers, and construction professionals to create detailed digital representations of buildings. This approach not only improves the accuracy of the design process but also enables real-time collaboration among stakeholders. Advances include:
Integration of IoT and AI technologies:
- Enhances real-time data collection and analysis
- Enables predictive maintenance and energy optimization
- Automates space utilization and management
4D and 5D BIM advancements:
- 4D BIM integrates time and scheduling data
- 5D BIM incorporates cost estimation and budgeting
- Facilitates more efficient project management and cost control
Interoperability and open standards:
- Promotes seamless data exchange between different software platforms
- Reduces barriers for collaboration among stakeholders
- Accelerates industry-wide adoption of BIM best practices
Virtual and Augmented Reality (VR/AR)
Virtual and augmented reality technologies have found a solid footing in the CRE sector, with many companies using them to streamline the design and leasing processes. Matterport, for instance, offers immersive 3D virtual tours, enabling potential tenants to experience properties remotely. Similarly, AR technology allows architects and developers to visualize proposed projects in real-world environments, improving design accuracy and stakeholder communication.
Blockchain and Tokenization
Blockchain technology has the potential to revolutionize the way commercial real estate is bought, sold, and managed. Tokenization allows for fractional ownership of assets, opening up investment opportunities to a broader range of investors. Platforms like RealT and Meridio are pioneering the implementation of blockchain and tokenization in CRE, making property transactions more transparent, secure, and efficient.
AI and Envisioning Spaces
Generative AI, a subset of artificial intelligence that uses deep learning algorithms to generate new content, has immense potential to help people envision spaces and changes in layout within the commercial real estate sector. By automating and optimizing the design process, generative AI can enable architects, interior designers, and clients to explore a multitude of design possibilities with ease. Here are some examples of how generative AI can be applied to envision spaces and layout changes:
- Automated space planning: AI can be used to create optimized space plans based on specific design constraints and requirements. By inputting parameters such as room dimensions, desired layout elements, and furniture arrangements, generative AI can produce multiple design options that meet the criteria. This allows clients and designers to explore various configurations efficiently and select the most suitable one.
- Adaptive design optimization: AI can help create designs that adapt to changing conditions or requirements. For instance, it can generate multiple layout options for a co-working space that accommodates different tenant needs, such as private offices, open workspaces, and meeting rooms. By simulating different scenarios, generative AI can identify the best solutions for each situation.
- Visualization and rendering: AI can be used to create realistic and immersive visualizations of space layouts. By generating high-quality 3D renderings or even virtual reality experiences, architects and designers can help clients and stakeholders better understand the look and feel of a proposed space. This enables informed decision making and reduces the likelihood of costly design changes down the line.
- Design personalization: AI can help create personalized designs based on individual preferences and needs. By analyzing user data, such as preferred styles, color schemes, or functional requirements, generative AI can generate customized layouts that cater to specific tastes. This can enhance user satisfaction and create unique, tailored spaces.
- Integration with BIM and AR/VR: AI can be combined with Building Information Modeling (BIM) and augmented/virtual reality (AR/VR) technologies to create a seamless design workflow. For instance, generative AI-generated layouts can be imported into BIM software for further refinement and coordination with other building systems. Additionally, AR/VR can be used to overlay generative AI-created designs onto real-world environments, enabling clients and stakeholders to visualize the proposed changes more accurately.
One notable example of a company harnessing the power of generative AI in the architectural design process is Spacemaker. Their AI-powered platform generates optimized building designs based on site constraints and requirements, helping architects and developers create more efficient and sustainable projects. In summary, generative AI has the potential to revolutionize how people envision spaces and layout changes within the commercial real estate sector. By automating and optimizing the design process, it enables architects, designers, and clients to explore a wide range of possibilities, ultimately leading to more efficient, sustainable, and user-centric spaces.
AI and Investors
From data analysis and predictive modeling to natural language processing and sentiment analysis, AI technologies are empowering investors to make more informed and strategic decisions.
- Data aggregation and analysis: AI can be used to gather and analyze vast amounts of data from multiple sources, such as property listings, transaction records, demographic information, and economic indicators. By processing and organizing this data, AI can help investors identify trends, monitor market conditions, and pinpoint investment opportunities.
- Predictive analytics: AI-powered predictive analytics can forecast future market trends and property values based on historical data and real-time market information. This enables investors to make more informed decisions about buying, selling, or holding assets, as well as identifying potential risks and opportunities.
- Sentiment analysis: AI can be employed to analyze sentiments expressed in news articles, social media, and online forums related to commercial real estate. By gauging public opinion and market sentiment, AI can help investors identify emerging trends, potential market shifts, and areas of investment interest.
- Deal sourcing and matching: AI-driven platforms can match investors with suitable investment opportunities based on their preferences, risk tolerance, and portfolio strategy. By analyzing data on various properties and comparing them to an investor’s criteria, AI can suggest tailored opportunities and streamline the deal-finding process.
- Due diligence and risk assessment: AI can be used to automate and enhance the due diligence process by rapidly analyzing data on properties, tenants, and market conditions. This enables investors to identify potential red flags and risks associated with a particular investment, helping them make more informed decisions and mitigate risks.
- Portfolio optimization: AI-powered tools can help investors optimize their commercial real estate portfolios by analyzing factors such as asset allocation, risk exposure, and market conditions. By providing insights into the best strategies for portfolio diversification and growth, AI can support investors in making more strategic and data-driven decisions.
Some companies leveraging AI to assist investors in the CRE sector include:
- Skyline AI: This company uses machine learning algorithms to analyze various data sources, enabling investors to identify profitable investment opportunities and make data-driven decisions.
- Cherre: This platform utilizes AI to aggregate and analyze real estate data from multiple sources, providing investors with valuable insights and predictive analytics to inform their investment strategies.
- Reonomy: Their AI-powered platform offers comprehensive property data, advanced search capabilities, and market insights, helping investors identify and evaluate potential investment opportunities.
AI technologies are playing an increasingly critical role in helping investors navigate the complex world of commercial real estate. By providing data-driven insights, predictive analytics, and enhanced decision-making capabilities, AI can support investors in understanding market conditions, identifying deals, and optimizing their investment strategies.
That’s a wrap on the technology advances we are seeing in commercial real estate, and more importantly, why they are getting traction. For more information on what’s happening or to see some of these technologies in action, I invite you to NAR’s iOi Summit. If you haven’t attended before, iOi stands for Innovation, Opportunity, and Investment, and it has become the preeminent technology and investor conference focusing on how PropTech is driving digital transformation in real estate.
Hosted by the National Association of REALTORS® (NAR), the sixth annual iOi Summit will be the best we’ve ever held. If you can’t attend, send someone from your team to network with 700 of the smartest people from real estate innovators, venture capitalists, entrepreneurs, brokers, title officers, mortgage lenders, and more.
