2024’s Real Estate Outlook Shaped by Cutting-Edge Technologies

In the rapidly evolving world of commercial real estate, the landscape is being reshaped by technological innovation as we enter the fourth year of the post-pandemic era. According to a recent article by Propmodo, the average weekly office attendance is now roughly half of what it was in 2020. However, attendance varies dramatically day-to-day, with Fridays seeing the least footfall. This dynamic has spurred a demand for workplaces that not only accommodate hybrid workstyles but also justify the commute.

Climate change concerns are also driving occupiers to demand energy-efficient operations from landlords. This new dynamic necessitates greater responsiveness and efficiency from real estate owners and operators to thrive in this evolving market.

The 2023 Global Real Estate Technology Survey by JLL reveals a significant shift in the industry’s approach to technology. Over 80 percent of respondents, comprising both occupiers and investors, plan to increase their technology budgets despite challenging operating conditions. Furthermore, 91 percent of occupiers expressed a willingness to pay a premium for tech-enabled spaces.

While the specific technologies to be invested in are still under consideration, solutions that streamline building operations through automation, provide real-time insights into property use, and enhance cybersecurity are expected to take center stage.

Dynamic Occupancy

In the hybrid work environment, the need for commercial space persists, but the quantity and duration of space required have decreased. To survive, commercial operators must leverage technology to accommodate this evolving behavior.

Occupancy rates are rising slowly but steadily, as highlighted in Kastle’s research. However, a return to 2019 occupancy levels remains unlikely. Operators, particularly those managing older buildings, must find ways to use surplus space more dynamically.

The adoption of robust occupancy tracking technology is essential for gaining real-time insights into hybrid attendance patterns. Traditional systems aggregate data into daily totals, but real-time data is needed to differentiate attendance volume and frequency among various tenants and visitors.

At Kastle, this is referred to as “Active Occupancy”, which measures access activity patterns by individual tenant over time. Operators may adopt a combination of technologies such as video surveillance and space sensors for greater insight into occupant behavior.

Open Mobility

The mobile-first world, enabled by smart devices and cloud computing, allows employees to change their work location daily based on lifestyle-centric needs. This fluid workspace model is transforming leases into more of a subscription or membership, offering access to multiple locations.

A new connectivity standard, Aliro, announced by the Connectivity Standards Alliance, aims to simplify access control across different buildings and systems. This standard will enable users to move between authorized spaces with a single app, revolutionizing access management for landlords and tenants alike. The first Aliro-compatible access system, Kastle EverPresence™, was recently announced, marking a significant step forward in this domain.

Building Efficiency

Sustainability mandates and operational cost efficiency are driving the market for smart buildings. Cisco Systems predicts that smart buildings will comprise 75 percent of all new commercial construction by next year. This trend is pressuring legacy properties to retrofit smart building technology to remain competitive.

Fortunately, retrofitting has become more affordable, with modern sensors offering wireless installation and low energy use. These advancements make it feasible to upgrade existing infrastructure to meet the demands of a hybrid world.

Cyber Risk and AI

The integration of smart building technology increases vulnerability to cyber risks. These systems rely on IoT connections, creating multiple entry points for potential hacking.

Artificial Intelligence is poised to play a crucial role in managing cybersecurity within smart buildings. Advanced owners are deploying Security Information and Event Management (SIEM) solutions to rapidly detect anomalies and security incidents. These systems use machine learning to identify irregularities and respond to threats faster than human staff.

While full industry-wide adoption of these technologies is still in its early stages, the challenges in the market are accelerating their implementation. Tech-savvy operators are already planning to embrace these innovations, setting the stage for a transformative future in commercial real estate.

For more insights, visit the original article by Propmodo.