Of all the challenges facing the commercial real estate industry today, there are a few big ones looming over the rest. While the topic of climate change and sustainability has been making headlines for decades, it’s finally rising to the forefront right now. And, of course, the global supply chain crises, materials shortages and labor shortages are also continuing to have a massive impact.
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To solve these complicated problems, we’ll have to use all the resources and information available to us. By embracing technology and innovation, we can address our challenges and create a better future for the real estate industry.
Climate Change And The Impact On Technology
First, let’s talk about climate technology and how it is affecting the real estate industry. Nearly half of all greenhouse gas emissions are generated from real estate. Approximately 27% of annual CO2 emissions come from building operations and another 20% come from building materials, construction and other construction-related causes. Concrete, steel and aluminum for new construction are particularly large contributors to carbon emissions. Existing buildings are contributing to the climate crisis due to a lack of energy efficiency. Even though upgrades are available, many real estate developers and owners are slow to embrace sustainable solutions.
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The climate crisis is becoming impossible to ignore. But with this threat comes an opportunity for change. As CRE professionals, we can make impactful decisions and invest in technology that will drive change. We can retrofit existing buildings for a more energy-efficient future, and we can develop new buildings that utilize sustainable building practices and materials. This is an area where we truly have the power to change the future by reducing carbon emissions. From proptech software development to innovative new building materials, technology can make it all possible.
Addressing Concerns Now Rather Than Later
If our goal is to create a more environmentally friendly future for our industry, it’s imperative that we ramp up our efforts now—not later. Today’s buildings will still be around in a few decades, and your energy-efficient choices will be even more valuable in the future than they are today. The world is working toward a net-zero future with goals to eliminate all carbon emissions from the built environment. By reducing future energy bills and meeting rising efficiency standards, you’ll be raising the desirability of your properties and preparing for the future.
Aside from climate, the other major challenge facing commercial real estate is the supply chain crisis. Materials shortages and labor shortages have made it challenging to develop new buildings and remodel older buildings. This is especially difficult because developers and property owners have been slow to embrace technologies such as in-depth building analysis and management software. This reluctance to adopt valuable technology has contributed to supply constraint problems for many companies that are developing and operating commercial real estate. Instead of being unprepared and unable to handle the squeeze caused by supply chain problems, technology makes it possible to collect countless data points and respond to them.
Technology can provide property owners and developers with the data they need to make good decisions throughout all phases of the building life cycle. When real estate owners and developers use today’s technology to make their decisions, everyone from owners to investors to consumers can benefit. Anyone considering investing in a real estate fund should ask for transparency into the company’s technology strategy. Are they relying on their “gut feelings” or are they collecting robust data and using it for decisions like site selection, design and asset management? What data points are they collecting and how are they planning to use those facts to inform future decisions?
Innovations To Lead The Way
There are innovative companies and entrepreneurs out there who are working toward a better and brighter future for the commercial real estate sector. We need to seek these companies and individuals out, invest in them and give them the recognition and support that they need to spread their ideas. We should be lifting up innovative technologies that solve the problems that we face. When making decisions, look beyond your individual role and look ahead to the future of the industry. In this way, each of us can do our part to accelerate the innovation and technology that will enable a better future.