Tech Innovations in Construction and Real Estate
Have you noticed that tech trends are becoming more and more common in Real Estate? New tech innovations are starting to make strong improvements in the industry. Bisnow’s CRE UrbanTech Summit in SF presented some fascinating discussion about how technology is impacting the commercial real estate industry with a group of all-star panelists which included startup founders and investors. Let’s look at a few that were presented at CRE UrbanTech Summit.
How Blockchain Will Impact Real Estate
First of all, what is Blockchain? The easiest way to understand it is to think of Blockchain as Google Docs. The traditional way of sharing documents with collaborators is to email the file to the recipients and ask for the updated version. In this case, the access to the document is closed until it’s emailed back. That’s how databases work and how banks manage transactions today. The problem with this sharing system is it’s not allowing multiple collaborators to make changes at the same time. Banks “briefly lock access (or decrease the balance) while they make a transfer, then update the other side, then re-open access.“
But Google Docs allows multiple editors to make changes at the same time, and the new data is saved constantly, in real-time. Blockchain is like Google Docs, but acts as a big database that’s decentralized and accessible by anyone. Blockchain can record not only financial transactions but virtually anything of value. The data is always safe, accurate, and unchangeable in Blockchain. It is “a kind of self-auditing ecosystem of a digital value, the network reconciles every transaction that happens in ten-minute intervals. Each group of these transactions is called a block.“
So, how Blockchain will impact the CRE (Commercial Real Estate) industry? Below are the trends that could potentially stir things up in the soon future:
- Smart contracts
- Efficient transaction process
- Cost reduction for supply chain management
A smart contract is just like contracts in the real world, except it’s completely digital. It is an agreement performed by computer codes and stored in a block in the Blockchain network. When conditions are met, the smart contract automatically releases the fund or complete the transactions. Because the data are stored in Blockchain, smart contracts are always safe and transparent. Due to the characteristics of Blockchain, once the smart contract is in place, it can not be changed or manipulated. In this case, the traditional trusted third parties like banks are no longer needed. Smart contracts can help companies in the CRE space to reduce substantial operational costs and become more efficient. Real estate transaction is just one of many scenarios that smart contracts can be used for.
Smart Building Tech That’s Happening Now
Today, 80% of the buildings are more than 30 years old in the U.S. “The challenge for all of us is taking that building stock and getting it into the 21st century,” said Manuel Fishman at the CRE UrbanTech conference. With emerging technologies, there are a lot of older residential and commercial buildings need to be improved. This is where 4D BIM (Building Information Modeling) comes in handy.
BIM has been part of the construction industry for some time now, it is an intelligent modeling tool for construction planning, designing, and managing the infrastructure. 4D BIM connects non-graphical and graphical planning information along with scheduling data to provide step by step visualization of the project development. Using BIM to build an infrastructure is the process of designing a building collaboratively within one computer system of models rather than a few separate drawings on papers. If one design element is changed, the 4D BIM changes it in all views that display that element.
In late September 2018 the newly constructed SF downtown centerpiece, Transbay Center, had to shut down temporarily due to a 2.5-foot-long crack discovered inside. Since then, it’s been almost a month and the reopening date still cannot be predicted. The contractor that oversaw construction for Transbay is now suing the Transbay Transit Authority for $150 million for the false design document that they provided and led to this delay. In this case, 4D BIM can be an extremely valuable tool to avoid costs and delays like what Transbay is facing.
Envisioning and Building the Future
What do millennials want in real estate? In the soon future, what would be the high tech living experience? Panelists from the CRE UrbanTech conference discussed about the importance of clean air, interactive buildings and furniture, IOT, smart building control, community and transit, e bikes, as well as the need for reduced housing cost.
“In a recent study, a company had to hire 11 people to makeup for the bad air quality they had in the office,” said Sara Neff from the panel. Clean air probably is one of the top needs in the soon future that people aren’t even aware of it yet. The clean air quality is playing a key role on human performance, such as work, health and wellness.
With interactive buildings and furniture, our surroundings will learn who we are and what we need. Such as, people will be able to pick their desks in the office based on the KPIs like air quality, productivity, close to the bathroom or snack bars, etc. For example, the smart furniture can analyze the data and understand when you need to stand and become a standing desk automatically.
To reduce the cost and inefficiency of building development requires some conventional tech solutions. Besides 4D BIM, indus.ai is also another new tech solution that’s becoming more and more desirable, even among some of the biggest industry players like Skanska, AECOM, Brookfield, and Ryan Companies. Indus.ai uses Artificial Intelligence and smart cameras to monitor construction job sites by collecting and analyzing videos and images. Brookfield is currently using indus.ai’s construction intelligence platform to monitor its Manhattan West project in NYC. “Everyday, there are 500 to 1,000 workers come to the job site, many have to wait up to 30 minutes for the hoist. That’s two-and-a-half hours of lost work time, and tens of thousands of dollars wasted per week,” said Matt Man, CEO at indus.ai. On average, indus.ai can help builders to save 10% – 20% of the wait time for the construction elevator on their sites.
Why is Tech So Crucial in Real Estate?
Conventional tech solutions make data easily visualized, more accurate, accessible, and actionable. All the new technologies like Blockchain, smart contract, 4D BIM, artificial intelligence, IOT, AR and VR are all improving the way we think, act, live, and build. The real estate industry is still in its beginning stage of adapting newer technology, we will see more innovations down the road. As technology continues to become more common and desirable, we can expect efficiency in real estate at a whole new level.
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