A proptech
glossary: 10
terms to know
How much do you know about the cutting-edge tech tools and concepts for commercial real estate?
Almost every Baby Boomer—and most younger Americans—have owned, have interacted with or recognize the Slinky. Making its debut in 1945, the “walking” spring toy was an instant hit, selling out of its entire stock almost instantly. By 2000, it had sold a total of 250 million units and entered the National Toy Hall of Fame. What many Americans don’t know, however, is the novelty’s originally intended purpose: to keep sensitive ship equipment steady at sea.
Like the Slinky, many products and services that touch our lives today were created with a different application in mind. This is especially true in the built environment, where many new and maturing technologies are taking hold in the places we live, work and play. Read on to learn about 10 important technologies and tools that are currently driving innovation in the built environment.
1. Artificial intelligence
Artificial intelligence (AI) refers to software or machines that can complete tasks and solve problems by thinking like a human. The applications of this technology in CRE are vast: from powering virtual assistants in buildings to collecting and managing utilization data for properties. AI can help planners understand occupancy demand in hybrid workplaces where employees’ time in the office varies from week to week. And as AI technology becomes more sophisticated, it will take over more of the data-mining tasks within facilities management, freeing up human managers to take on more interesting and optimized roles.
2. Internet of Things
The Internet of Things (IoT) is a network of physical devices, appliances and other items integrated with electronics, software, sensors and more, that digitally collects and exchanges data about the physical world. In the built environment, new IoT sensors and data analytics tools allow landlords and occupiers to better monitor their buildings—even remotely—and gain insights into how spaces are being used. These devices can track and analyze data around occupancy levels, equipment usage and other factors to enable more dynamic management, ensure smooth operations and facilitate cost savings. IoT technology will be especially valuable in managing the hybrid, flexible workspaces of the future.
3. 3D printing
3D printing, the process of “printing” or creating a physical version of a digital 3D model by laying down many thin layers of a material, has a variety of proptech applications, especially in construction. 3D printing can produce virtually any machinery part imaginable, with fewer limitations than traditional manufacturing technologies like injection molding. 3D-printable glass allows builders to produce specialized, custom glass features on site, reducing the cost and time on construction projects. Looking ahead to the future, 3D printers will be capable of printing building components from a wider variety of materials, as well as creating new shapes such as complex curved forms that are not currently achievable by conventional building methods. Finally and importantly, 3D printing technology also has the potential to revolutionize construction of needed shelter in disaster relief zones and communities that lack adequate affordable housing.
4. Digital twins
A digital twin is a virtual representation of a physical building, populated with real-time data about the physical asset that is transmitted through meters, wireless sensors and other IoT devices. During design and construction, these tools can be used to simulate building operations, fine-tune design features and verify that construction meets design standards. In completed buildings, digital twins enable property owners to do predictive modeling, make proactive adjustments to their real estate assets, reduce waste and increase resilience.
Digital twins will transform facility management by allowing facility managers to simulate new technologies and methodologies, analyze performance issues, and generate predictive insights to create more comfortable, productive and environmentally responsible spaces. They will also enable more accurate planning and scheduling of complex tasks and fine-tuned materials deliveries in commercial properties.
5. Blockchain
Blockchain is a decentralized digital ledger of recorded transactions contained in individual “blocks,” each connected to those before and ahead of it to keep records secure. Although it's more commonly associated with the finance industry, blockchain can be used in the proptech world to execute contracts—specifically, smart contracts. A smart contract is a computer protocol designed to digitally facilitate, verify or enforce the negotiation or performance of an agreement. In a smart contract, the terms of the agreement between buyer and seller are written directly into lines of code, which exist across a distributed, decentralized blockchain network. Smart contracts can improve communication efficiency, lower costs and reduce the risks of breach and fraud in leasing transactions. In the future, smart contracts may allow for fully digital management of property agreements.
6. 5G
Representing the next generation of wireless network technology, 5G cellular networks promise to support speeds at least 10 times faster than existing 4G cellular networks. In addition to transmitting data more quickly, 5G systems will allow more devices to connect simultaneously to a network. With internet connection being one of the most essential necessities for commercial building occupants, 5G networks can change the way people interact with space by enabling other technologies to operate at their full capacity. Faster wireless connectivity also has the potential to enable new smart building and IoT applications independently of Wi-Fi networks. Together with lower energy requirements, these advances will enable wider adoption of sensors, smart devices and other innovative proptech tools.
7. Autonomous vehicles
The real estate applications of autonomous (aka “self-driving”) vehicles revolve around their potential to transform the way people navigate space. City streets, parking lots and more will need to adapt to the increased number of autonomous delivery, rideshare and shuttle vehicles on the roads, and the rise of self-driving cars will also affect the need for parking at commercial properties. In the more distant future, fully self-driving cars could enable cities to reshape public transportation facilities, eliminate traffic lights and redesign road networks and urban infrastructure to be more compact and efficient.
8. Virtual reality
VR is a computer-generated, immersive, responsive 3D environment, typically viewed through a headset or on a smartphone. VR equipment enables users to observe and explore an artificial world, as well as interact with virtual features or items. For proptech purposes, VR can help architects and their clients simulate experiences in buildings during the design process, before beginning construction. Immersive VR has the potential to revolutionize the way future renters, buyers and real estate investors evaluate buildings by reducing or even eliminating the need to visit them in person.
9. Augmented reality
Augmented reality (AR) superimposes virtual enhancements such as text, graphics, audio and 3D models on real-world scenes in real-time. In the CRE world, AR tools can integrate information displays and wayfinding to deliver personalized navigation experiences within buildings. In the future, AR will simplify maintenance and construction processes: For example, computer-generated images of a structure, informed by geo-referenced building information models, could be superimposed on walls and floors to help workers identify hidden elements.
10. Big data
Of all the proptech terms defined here, big data is perhaps the most sweeping, ubiquitous and vague. CRE models are using big data—large data sets that can be analyzed computationally to reveal patterns, trends and associations—to draw on a wider range of factors in property searches, often at a hyperlocal level: from local air quality and popular commuting routes to more traditional inputs such as asking and closing prices of buildings. In offices, data (along with the aforementioned IoT) helps companies track occupancy levels and make decisions around health, mobility and space usage especially relevant during the COVID-19 pandemic. Finally, as existing public data is increasingly digitized and collected, developers and property owners can leverage it to make more informed decisions about factors like sustainability and future climate impact. Big data has powerful future implications for virtually every corner of the commercial real estate industry, from warehouses and supply chains, to shopping centers, to city planning—and those examples are just scratching the surface.
The field of proptech is evolving rapidly as new technology emerges and industry professionals discover more creative and innovative ways to apply it to the built environment. Taken from our first-ever global technology report—which you can read here—these are just 10 tools and concepts that have the potential to add significant value to projects—and more are being created every day. Commercial real estate may be slow to the technology transformation, but it is catching up quickly, changing the way we design, construct, manage and even move through space.
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