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Is data the new oil?

Data’s transformative effect on CRE can help tenants ‘future proof’ their real estate decisions

July 24, 2019

Technology sits at the forefront of today’s society. To remain successful, companies must adopt a mindset of rapid and continuous adaptation to keep up with the exponential growth of technological competition that is characteristic of the 21st century.

Commercial real estate is a number-crunching game, so it is perfectly positioned to benefit from the advancements in artificial intelligence (AI), machine learning and big data we’re seeing today across almost every industry. In fact, think of any real estate discipline that utilizes data: building valuation, financing, transactions, energy management, asset management, transportation management, and the list goes on.

Big data is already being used in many of these disciplines, but the use case will explode in the next decade. In fact, the use case will move far beyond just the “traditional” number-crunching disciplines of real estate and reach you, the tenant. 

Predictive analytics is a “treasure” for corporate tenants. It is dramatically ratifying the front-end analysis that real estate advisors like me use to inform clients on cutting edge real estate strategies.

We can now leverage our most robust labor pools while fully accommodating for overall cost considerations. The corporate tenant who executes on competitive intelligence to capture the best and most cost effective global talent will attain a critical ‘first mover’ advantage to scale. Big data, AI and other new advancements are rapidly evolving to create new tools and opportunities for companies looking to make even smarter real estate decisions. Decisions that will ‘future proof’ their locations now and tomorrow and help them outperform the competition.

Human + technology = innovation

Yes, the future looks incredibly bright for the interaction of humans and technology in real estate. An enormous push over the last several years has transformed the tech sector of CRE into a multibillion-dollar industry. JLL has stepped up as a leader in this shift by making a point to invest in prop-tech’s future. We have committed over $100 million to create our very own prop-tech venture arm known as JLL Spark. Some truly groundbreaking data and AI tools have already come to our attention that are radically transforming the next phase of CRE innovation and the tools we can use to drive value for our clients. New installations like deep learning, that is, programming computers to evolve and teach themselves based off their own troubleshooting and market data allows us to singlehandedly offer the most comprehensive and prescient analyses to our clients.

JLL is committed to the digital evolution of the real estate industry. We have been using Blackbird, a computerized system and method for visualizing integrated real estate data, with clients for years. This isn’t just a digital tool for analyzing rents and availabilities or a geospatial site selection tool.  It digs deep into the decision making process to explore non traditional CRE data such as transit availability, amenities, workforce demographics, Millennial ‘heatmaps’ and competition for those workers around likely locations for a next office or HQ. The data is also constantly getting ‘bigger’ – meaning we are adding even non-traditional sources such as GPS data from mobile phones, even growth of coffee shops within a certain radius. This allows an even greater depth of analysis.

A pillar of modern technological advancement, AI is also helping companies once they have made the decision to expand or relocate. One of the primary ways we are seeing leading edge technologies penetrate the office environment is through JLL-developed advancements such as JiLLTM , an AI-powered workplace platform using a conversational smartphone app to help employees streamline work and be more productive. How? By assisting them with time-consuming administrative tasks such as setting up meetings, locating colleagues, filling service requests, reserving a desk or conference space, finding and ordering lunch, a rideshare or the next airport shuttle, all through a voice assistant.

JiLL is part of a subtle shift within the office environment. ‘Cool’ offices are no longer defined simply by their aesthetics, amenities, or any one component in general, but the overall effectiveness that can be achieved through deliberate cohesion of these aspects. The future of workspace will be defined by how and why technology makes employees inside (and outside) more productive and satisfied.

Smart tenants choose smart cities

What is even more exciting to me is that it is not just the real estate industry and its advisors embracing big data and AI. Cities are becoming major actors in this play. As more employees commute from homes that are digitally connected and increasingly ‘voice activated’ it is reasonable to assume they will demand to have parallel convenience both on the way to work and within their workday schedules.

Companies like NVIDIA are employing platforms like NVIDIA Metropolis, which applies deep learning to video streams to help cities better manage resources, traffic patterns, and public safety. According to NVIDIA, video is the world’s largest generator of data through “hundreds of millions” of cameras on government and commercial property, public transit, and roads, railways, ports and airports. NVIDIA predicts there will be more than one billion such cameras operating by 2020. Private companies gathering data constitutes a large public concern over privacy rights, however, from a lens that evaluates the net positives for cities, communities, and corporate entities when ethically used, data analysis should be involved in our everyday lives.

And, as cities and urban centers themselves get ‘smarter’ the robust infrastructure needed to support, enhance and integrate technologies will provide a broader platform for further technological advances. There is also transformation taking place in the infrastructure needed to handle the explosive growth in data. Companies like Fungible are providing enhanced, reliable infrastructure for existing data centers, allowing improved performance and handling of future data flows. 

Smart cities corral big data to enhance public services, ease congestion, improve public transit and safety, even facilitate easier parking for visitors. So, it is not just in the workplace where AI can enhance productivity; it’s out on the street as well, with companies like Scoop. If deep learning can help your employee get to work faster, with less delay and more safety, how much more productive will that employee be in the workplace? 

About the author

Rich Branning is a JLL thought leader orchestrating a team of specialists in brokerage, finance, workplace management, construction, global incentives and labor analytics. In his 25 year career he has advised and represented some of the Bay Area’s top high growth global companies, offering creative negotiating strategies with an entrepreneurial point of view on more than 20 million square feet of corporate real estate transactions.

You can reach Rich directly by email at rich.branning@am.jll.com or via phone at +1 (650) 480-2188. 

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