Disruption appears to be the top commercial real estate trend in 2021.
Automation, innovation and advances in technology are forever changing the way in which the commercial real estate industry operates. Let’s take a quick look at how the industry is being disrupted.
McKinsey Analytics insists it is commercial real estate brokerages as opposed to real estate agents who should be most concerned about automation. This group reports that there is a greater than 50% chance that brokerages will be automated in the years ahead. Furthermore, McKinsey states the chances of agents’ work being automated is a mere 27%.
Though commercial real estate agents’ roles are gradually changing, their services will likely prove necessary for the foreseeable future. After all, business owners, managers and others need a local market expert to pinpoint the optimal location and agreement terms. Even if brokerages are automated, people will still rely on real estate agents for live assistance from an actual human being. The bottom line is data is seemingly ubiquitous yet it is not enough to complete a commercial real estate transaction in and of itself.
Automation Might be a Boon to Agents
Instead of viewing automation as a threat, real estate agents should view it as a helpful tool that makes it that much easier to connect property-seekers with property owners in an efficient manner. Automation enhances agent productivity by hiking efficiency through the completion of repeatable tasks that are quite monotonous and data-intensive.
When used properly, automation liberates agents to spend more time completing work that cannot be done by high-tech solutions, such as meeting with prospective clients, scoping out new properties and so on. In fact, there is an argument to be made that some real estate agents who have the optimal platform, licensing and technology might not need a conventional brokerage. However, there is a question as to whether property-seekers favor online brokerages or traditional brokerages.
Tech Innovation Requires Ongoing Adjustments
Those who adapt to technological innovation are that much more likely to be standing a year from now and also across posterity. In short, those who act somewhat similar to a software business while retaining brokerage elements will capture that many more clients. There was considerable worry that tech advancements would replace agents yet this no longer appears to be the case. Rather, brokerages are now focusing on how to implement tech tools to better serve agents. Agents who thrive in the years ahead will prove capable of working with software programs rather than constantly worry about being replaced by such tech advancement.
Those who study the impact of technology on real estate insist there is the potential for the agent, often described as the “middleman”, to be disrupted or potentially even completely replaced. If tech advances to the point that it bridges the gap between business owners and property owners, agents will be disrupted. However, agent involvement will likely continue to prove necessary for the purchasing component of the real estate transaction.
Though property-seekers can qualify for financing and sign contracts online, this process probably won’t be completely automated for a while, if ever. Agents and other industry professionals are still necessary to complete such transaction. Furthermore, there is something to say about the comfort factor of dealing with an actual human being as opposed to computers. Some business owners, property owners/lessors and other parties involved in commercial real estate transactions will always want an agent to interface with. The average business owner and property owner lacks the time, knowledge and confidence necessary to read, research and analyze the process of buying, selling or leasing property on their own, meaning there will likely be an important role for real estate agents to play moving forward.