It’s an exciting time to be in
commercial real estate. Emerging technologies that leverage data, analytics and
insights are beginning to transform the industry. In fact, now is a great time
to be adopting the latest evolution of machine learning and AI, since it has
already been battle-tested by other industries.
Investors, landlords, and operators are
listening to their tenants, who have long ago embraced technology in an
on-demand world. Tenants are ready for a better building experience, like that
provided by apps such as HqO, which act as the remote control to your building.
Occupiers also increasingly want to start the journey for a new office space
online.
That doesn’t mean we want to cut brokers
out of the process – quite the opposite. We invested in a company called Hubble
that serves as a digital platform to find and list flexible office space in
London and Manchester, where we have a commercial agreement in place to share
leads of a certain size with the JLL Flex Office team, and vice versa. This
allows both sides to focus on what they are good at, and deliver great spaces
to their clients on more flexible terms, better suited to the changing needs of
businesses.
Investors are also looking for more ways
to incorporate data and analytics into their short- and long-term investment
decisions. Start-up AI and machine learning firms are addressing this demand by
leveraging technology to increase the quantity and quality of commercial data
inputs while automating analysis of data to provide deep insights. For example,
JLL Spark invested in Dealpath, a deal management platform that helps investors
make better decisions and learn from their historical transactions. It is not
always easy to abandon the spreadsheets of yesterday, but once they do, many
investors realise they have a real strategic advantage by weaponising their
data and insights.
Being able to quickly analyse data to
help drive investor decisions is leading to more informed decisions and faster
processes. Within this realm, another portfolio company based in London,
Orbital Witness, is using data from satellite imagery to accelerate the
traditionally time-consuming and opaque legal due diligence process. By
flagging potential problems early in the process, Orbital Witness is enabling
investors to make more informed decisions about a property earlier on.
The ability to gather and quickly
analyse data is also creating a shift in tenant expectations. For example, the
planning standard of 125 to 225 sq ft per person in the professional
workplace is being challenged based on new insights related to actual
utilisation. VergeSense, a space utilisation firm recently deployed its
planning tool in a pilot at JLL offices in the UK. It installed more than 1,000
sensors across 140,000 sq ft.
In a matter of weeks, JLL had a
dashboard showing actual space utilisation trends and unexpected insights. The
team plans to connect VergeSense insights with other environmental sensor data
to get a holistic understanding of their facilities to better serve those who
occupy it.
Sustainability is also a key driver of
technology, and one that real estate is eager to embrace to increase net
operating income while decreasing the impact of our real estate footprint on
the environment.
The International Energy Agency
attributes the fastest growing use of energy in buildings to air conditioning,
and expects energy usage to triple by 2050. With climate change expected to
continue to cause temperatures to rise, more technology solutions to measure
and control a building’s energy consumption are needed urgently. Cities around
the world are taking a stand, creating new legislation to set aggressive carbon
neutral goals and increased government regulation to make sure we reach them.
While it may seem daunting, sometimes
the solutions are relatively simple, like adding a new software layer to the
hardware that buildings already run on. We recently invested in Software Motor
Company and its affiliate in the UK, Future Motors, which developed the world’s
most efficient motor, taking motor technology that has existed since the 1800s
and adding a software controller to ensure it runs more efficiently and then
connecting it to the building system network. We ran two pilots at JLL
buildings to test it in action. The results were clear, and SMC customers are
seeing an average savings of 50 to 60% in HVAC energy costs compared to
standard induction motors.
The application of new technologies in a
mature industry is helping to solve century-old problems. It is still early
days, but these real estate technologies Âare starting to disrupt the status
quo with time-saving and smart solutions, transforming the commercial real
estate industry, and benefiting those who live, shop, and work in these buildings.