Robotics in CRE: How automation is changing the real estate value proposition

From smart buildings and smart cities to AI and machine learning, there’s little room for doubt that the world is rapidly moving towards a fully tech-enabled society. Forward-looking commercial real estate (CRE) professionals are embracing these new capabilities, and revolutionizing the way we add value to commercial real estate operations.

In the previous article, we discussed the impact of IoT (the Internet of Things) and Artificial Intelligence (AI) in CRE. In part three of this ongoing series, we examine the role robotics plays in moving real estate into the future.

Hard-working hardware

One of the areas where the use of robotics in CRE has really taken off is drone-assisted operations. Drone technology is being used to target some key challenges faced in the industry. 

Processes that used to be far more complicated and expensive, like aerially mapping a property, can now be accomplished in a fraction of the time, and at a lesser expense. Part of the benefit is that drones allow developers and marketers to tell a story, as the development unfolds week by week in stunning images from on-high. Large construction sites can also be more easily managed when material stocks and inventory are being monitored with drones.

Another use of the tech is cutting down the time spent on surveying properties for maintenance and compliance purposes. Aerial surveys can easily reveal damage or deterioration and allow owners to address the problem sooner. 

Drones equipped with specialized imaging cameras can also detect major issues like gas leaks or help pinpoint areas of heatloss for energy optimization. Given the drive towards cleaner, more energy-efficient buildings, this is a technology that is likely to become a cornerstone of future CRE operations.

Virtual presence

Robots have also gained some traction working in building interiors. Machine technology can be used to map interior spaces and even, to present them to prospective tenants. 

San Francisco-based operator Zenplace uses small telepresence robots to show properties, complete with a screen for the realtor to interact with clients – all from the convenience of the office. This means a more convenient process for prospective tenants, who can gain access to a property using an app on their phone while cutting down travel time for the agent.

A bot by any other name

Another area where robotics is taking CRE by storm is software robots aka “bots”. Robotic Process Automation (RPA) is the use of bots to automate mundane and repetitive tasks that would otherwise need to be done by human workers. This means time-intensive work like document management or invoice processing can be outsourced, leaving brokers free to focus on larger strategic goals and more creative problem-solving. 

Using RPA, brokerages can also extract large amounts of untapped data from existing databases. This is likely to be an increasingly useful application in years to come, as digitization in CRE increases and large volumes of new data start pouring in from a slew of smart buildings being added to existing portfolios. 

What the bots can’t currently do is analyze that data – the creative interpretation that task requires is best left to humans.

Reimagining Logistics Assets

On the back of a burgeoning e-commerce industry, robotics is also adding value through streamlined logistics processes. The landscape of logistics assets is changing, with a movement towards micro-distribution centers and multi-purpose retail spaces opening up new opportunities. 

In a research report from the Commercial Real Estate Development Association (NAIOP) these new trends, and the robotics enabling them, are explored in detail. Some key findings are that previously underutilized spaces, including areas in malls or old parking garages, are finding new purposes as distribution sites that help solve the Last Mile problem of logistics. 

Given their location in urban and suburban centers, these new types of logistic assets are blurring the lines between logistics and retail. Landlords and owners can now install logistics mini-sites in existing buildings, largely thanks to automated storage and retrieval systems that shrink the operational footprint. It’s a new way of imagining space and how assets can best be put to work. 

An additional interesting trend is that larger logistics assets are now often being established further away from city centers. While this may sound counter-intuitive, with greater automation the need for on-site staff decreases, and companies can take advantage of cheaper land and operations costs in more remote areas. The NAIOP report goes on to quote ABI Research’s projection that, by 2025, some 4 million commercial robots will be hard at work in over 50 000 warehouses.

The human face of robotics

By now, you could be forgiven for thinking that this sounds like the start of a robot revolution that will put a lot of people out of work in the long run. The truth is, we are far from independently functioning robotics and AI. 

Advances in these technologies allow people to do their jobs faster and more easily, taking a lot of the monotonous aspects out. As rapid-fire data-handling, logistics, and site management become the norm, there will also be an even greater need for people to oversee those processes. And the potential robotics offer for improving CRE operations means more ways to add value for customers and CRE professionals alike.

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What’s happening in … Panama City?

Nestled on Panama’s Pacific coast, Panama City is a bustling commercial hub that houses the regional headquarters of multinational giants like Caterpillar, Dell, BMW, and Philips. The city combines an eclectic mix of towering high rises, commerce districts and old, colonial areas like the charming Casco Viejo. 

An international trade hub

Progressive tax laws and the ease of setting up a business in the country have contributed to robust growth. The country is a top economic performer in Latin America and holds a unique position of global trade importance due to the presence of the recently-expanded Panama Canal and the world’s second-largest free trade zone. 

Panama has therefore established itself as a trade and logistics hub, with a lot of the resultant economic activity concentrated in, or near, Panama City. Thanks to this focus on a services-based economy, Panama also attracts large amounts of foreign direct investment (FDI), leading the Central American region in 2019 with $4.835 billion claimed.

The flip-side of having an economy rooted in world trade and foreign investment is that the pandemic hit Panama particularly hard. The country recorded a 17.9% GDP contraction in 2020.

CRE crunch through the pandemic

Due to the hard lockdown measures implemented from March 2020, real estate sales in Panama City came to a halt. As in many other cities, industries like tourism also took a hefty hit, and the retail sector faced challenges as the hard lockdown extended into June.

For Panama City’s office market, the pandemic came at a particularly inopportune moment, hot on the heels of an oversupply phase in 2019. The boom in office construction was the result of a period of sustained growth during 2013-2015, which saw a large amount of development undertaken in subsequent years. 

At the end of 2020, the office property sector recorded a vacancy rate of 24.2%, with increasing competition between rentals. This includes Class A and A+ offices, which showed a 25.7% to 26.5% increase in vacancies quarter-on-quarter by Q4 2020.

Similarly, in the first quarter of 2021, general property prices in the city have dropped, following a 10-15% drop-off in rents in 2020.

A strong recovery expected

Despite the hard impact of the pandemic, the overall investment sentiment in 2021 is positive. Early in the year, Panama gained a vote of confidence with the extension of a $2.7 billion precautionary credit line by the International Monetary Fund (IMF). 

The city has also resumed key development projects, like a twin cruise ship pier that will open up new tourism opportunities to bolster the local economy. And as far back as May 2020, Forbes listed Panama City as a strong contender for an investment with a short-term horizon, even in the midst of the pandemic downturn.

Charting a course

This strength is reflected in the extensive measures being taken by the Panamian government to encourage investment and build confidence.

According to President Laurentino Cortizo: “We have an economic recovery plan that has five pillars. We cannot talk about economic recovery if we do not have a good vaccination strategy […] that’s the base of that. We do have programs for small, medium-sized enterprises. We have infrastructure projects that generate quite a lot of employment. We have also […] some resources for our financial sector, and the bigger economic activities, for example construction. And the last one […] is related to the attraction of foreign direct investment.”

The reopening of international travel in October 2020 also saw an influx of FDI, as buyers jumped at the lower prices on offer in the Panama marketplace. Property tax exemptions and the opportunity to obtain resident status through real estate investment are additional contributing factors to the country, and Panama City’s, appeal.

Click here for the details of NAI Global’s regional partner in Panama.

Top Tech: Salesforce

We’ve been on a mission lately, to share best practices and some of our favorite commercial real estate (CRE)-related technology tools in a series of blogs. This is our fifth in the series, and explores the uses of Salesforce. For clarity, this is NOT a paid or sponsored blog. We are motivated only by sharing information with our network. We want to hear from you too: What are your favorite tech tools? Is there a CRE digital solution we should know about?

Below we provide just a few reasons why they make our top tech list, and you can also visit them directly on http://www.salesforce.com/.

What is Salesforce?

First off, the basics: Salesforce – the company – is listed on the New York Stock Exchange, and Salesforce – the platform – is essentially a customer relationship management (CRM) tool. It is enterprise-focused, providing companies with the means to streamline all their sales and marketing functions, in order to promote goods, services and more sales – and because it is cloud-based, it’s accessible to anyone anywhere with a browser.

It is, we’ve read, the top CRM platform in the world. If you need to communicate with customers and manage your customer base, automate processes, or manage events, these are all to be found under the Salesforce umbrella.

Contacts managed

Real estate is a field that has traditionally been seen as high customer touch and low tech – especially on the residential side of the industry. The scope of the CRE market however demands a lot more than a mental rolodex. A CRM strategy informs how you manage your stakeholder engagements and a CRM system, like Salesforce, brings together all customer touchpoints – email, website, phone, social, and more – and gives you a single, smart view of all interactions with an individual.

For both clients and for customers, you can see how powerful that would be. No more wondering if your colleague followed up or what the last status of your discussion was. It will all be viewable and linked in one place.

Get smarter

In June 2021, Salesforce also announced the launch of their Einstein Relationship Insights (ERI) tool which makes use of artificial intelligence (AI) research to gather meaningful insight into the relationships you enjoy with companies, customers, and prospective clients. This will be a very interesting addition to watch. Venturebeat says “ERI can help sales reps close deals faster by acting as a virtual agent for salespeople in all industries, scanning news articles, social media, collaboration apps, email, and other online sources to uncover and deliver account and contact information”.

Marketing power

The kind of data that goes into a CRM – and can be extracted from one – can give your marketing and communications the edge. For example, you can capture a client’s personal contact preferences, so you always know what’s the best way to start a chat on their preferred medium.

Salesforce also offers things like an email studio so you can send gorgeous and relevant mailers – as well as mobile, social, and advertising studios – and a journey builder so you can guide customers through the steps, channels, and departments as needed.

What is your top tech tool for CRE? Share your favorites with us.  

Green down under: Sydney’s ambitious eco targets

Australia is certainly feeling the effects of the global climate crisis in recent years. The sensitive and beautiful ecosystem enjoyed by the “Aussies” has been ravaged by heat waves and wildfires and drowned in record-breaking floods – not to mention the tragedy that is the widespread bleaching of corals on the Great Barrier Reef, the result of rising ocean temperatures.

Perhaps this is why Australians are getting serious about cracking down on common pollutants and regulating the ecological impact of the industry. The latest news in this regard is the tough energy standards introduced by the City of Sydney (the government of Australia’s most populous city), and support for these coming from the leading property companies in the region.

Zero net emissions

Commercial Real Estate Australia published an article in late May 2021 detailing how the commercial real estate (CRE) and property leaders in the city have come out in support of the tough new energy standards that will apply to all development applications – from as early as the start of 2023. Specifically, the City[MOU1]  is targeting zero net emissions for the entire local government area by 2035.

The report reads: “For the first time, City of Sydney is proposing that DAs to build or redevelop hotels and shopping centers must achieve a minimum National Australian Built Environment Rating System (NABERS) environmental rating, in this case, four stars. It also wants to increase the existing NABERS rating for office buildings from five stars to 5.5 stars by the start of 2023.”

Sydney Mayor Clover Moore says this makes economic sense, as well as environmental, and will help “save more than $ 1.3 billion on energy bills for investors, businesses and occupants between 2023 and 2040”.

Lead by the people

What’s particularly interesting about this, and other eco-friendly news emanating from Down Under, is that these gains appear to be driven at a regional and personal level, more than from the incumbent government which has been described as “one of the most climate-skeptical political groups in the developed world”.

For example, green energy is a big talking point in residential and commercial real estate (CRE) spheres, with considerable demand from consumers. One in four Australian homes now have rooftop solar energy supplies, says Recharge News. Clean energy is now almost a third of the power mix in the country.

Demand-side driven

The real estate industry is considered a thought leader in this space in Australia and has been recognized by bodies like the Global Real Estate Sustainability Benchmark (GRESB), in which they have topped the charts for a decade.

Australia’s Green Building Council calls GRESB “the global benchmark for environmental, social and governance (ESG) performance of real assets, defining and measuring standards for sustainability performance”, explaining that this assessment metric includes not just property, but also real estate investment trusts (REITs), funds, and developers – representing assets in excess of AUD $6 trillion.

Australian companies are also prominent in the Dow Jones Sustainability Index – another indicator, perhaps, of how the [professional and personal] tail can wag [government] dog in pursuing greener CRE.


The Great Migration: Remote Work Has People Moving Again

The US has been a ‘low move’ country for a while. The Census Bureau keeps statistics on how many Americans move to new residences each year, and their data shows that the national mover rate has been on the decline for almost 40 years. It peaks at just over 20% in the mid-1980s and has been trending down since. Then came the Covid-19 pandemic and its remote work revolution.

According to a new Apartment List report, published in May 2021, the pandemic has “sparked a rebound in residential migration”. This comes out of their recent remote work survey which drew qualitative comment from some 5000 Americans, and used the US census data, to establish that 16% of Americans moved between April 2020 and April 2021 – “the first increase in migration in over a decade”.

Wealth has legs

The research finds that the largest increase in this residential migration rate over the last year can be seen in high-income households (earning over $150,000) which is particularly interesting as people in this segment have been the least likely to move in the last decade.

Remote workers, specifically, were a whopping 53% more likely to move than on-site workers – making remote work “one of the major drivers in this trend”, a trend they expect to “remain prevalent even after the pandemic wanes”. 

“Wealthy movers in 2020”, the report says, were “more likely to move further from job centers in order to buy homes, enjoy more physical space, and live in places with lower cost-of-living” as a result of their flexible and high-wage jobs.

Six-figure households, the survey concludes, were “twice as likely to purchase a home” and “more likely to have gained additional physical space” because they are able to put greater distance between themselves and their previous place of work/employer.

Heavy burdens to bear

This is a trend turned on its head, as traditionally wealth and likeliness of moving have had an inverse relationship, where low earners move more often than high earners. In 2010, for example, there was a 27% movers rate among workers with household incomes less than $25 000 – compared to a 9% rate in the segment where household earnings were $150 000 or above.

This data further underlines how the Covid-19 pandemic had a disproportionate effect on low earners. That is not to say that low earners didn’t move in 2020 – they certainly did in droves. We see that this group had a movers rate of 28% according to the survey, and the Apartment List argues these workers moved “in search of more affordable living arrangements” in the face of income insecurity.

Widening divide

While the increase in moving can be seen in a positive light, for the real estate sector and the recovery of suburbs and remote work spots, there is also the worry of a growing divide: what Business Insider calls a K-shaped graph – describing the different trajectory of “professional workers” and “everyone else”, a trend also seen starkly in the millennial generation.

Social: Have you recently moved or is your employer looking at continued remote work options? What do you look for in finding your ideal area or city?