Houston, CRE still has a problem.
#CRE Data & Technology - The Next Frontier
Outdated, legacy systems and disparate data are cornerstones of the commercial real estate world. Yes, #Proptech, #AI, #MachineLearning and other buzzwords have been circulating in this sector for many years now, but take a closer look and there is both cause for concern and opportunity to surge to the front of the proverbial line.
Concerns
- Antiquated tech infrastructures with legacy systems
- Contemporary technology requirements to implement agile decision-making, streamlined and actionable insights, and most importantly: #AI
- Data Siloes and Outdated/Inconsistent Formats
- Data Integrity and compliance
- Reliance on external vendors (data & tech)
- Lack of in-house expertise depth that understand both the data and its application
- Standardization of data is "all over the board"
- Cost! (enough said)
- Resistance to change - the cornerstone of CRE!
Opportunity
- Move from point solutions to integrated data on a single source of truth tech platform
- Reduced reliance on one or two "key" vendors or data sources (pliability and flexibility)
- Streamline data and thus more efficient insights
- ROI through industry leadership and innovation that creates a potential competitive moat
- Cultural shift with a best-in-class blend of art and science
- Better, stronger, faster decision making
The time is now!
Overall, the benefits are substantial. Too many organizations go for the flash of technology and data based on FOMO and do not permeate the innovation and abilities through the organization with education and resources.
While I understand this sector's profitability is plagued by tight margins and vast fluctuations in revenue based on economic conditions, no organization has truly created a moat and still show off capabilities in pitches and presentations that do not get used in the daily operations and decision-making.
2025 is the time to shift from incremental updates to comprehensive platform reconstructions, driven by a desire to overhaul outdated systems and adopt innovative strategies from outside the industry. Generative AI will require a wave of modernization and mindset shifts, not only in tools and processes but also in workforce skills and leadership thinking, positioning the industry to modernize holistically and stay competitive in a rapidly evolving landscape.
Will it happen?
It only takes a few innovative companies willing to spend the money and time to create a moat that will last for many years to come (and don't forget...whatever is done has to permeate through the organization and not exist in silos)!
IN THE NEWS
Blackstone president sees ‘a ton’ of AI data center demand, commercial real estate recovery
"...Jonathan Gray of Blackstone thinks there is more gas in the tank for data center usage demand."
For U.S. Restaurants and Other Businesses, Demographics Will Remain a Challenge
"The total fertility rate in the U.S. remains well below the replacement level of 2.1, or the threshold at which a generation can sustain its population. This underscores why demographic trends will pose long-term challenges for the U.S. in the years ahead."
Brain drain at Census Bureau has employees warning about the country's statistics
"...recent staff departures are already raising concerns about whether the Census Bureau can continue producing reliable statistics for the country."
Why America is turning into a nation of homebodies
"Experts used data from the American Time Use Survey to study how people in the U.S. spent their time before, during and after the pandemic. Here’s what they found."
Tariffs trigger pauses on some retail, industrial real estate deals
"It’s too soon to know exactly how tariffs will impact commercial real estate. But some cracks are emerging in the U.S. retail and industrial sectors, CBRE’s Whitley Collins says."
Nostalgic Retail Spotlight:
SPORTS AUTHORITY
Sports Authority opened its first store in late 1987 in Southern Florida. In 1990 Kmart (yes...the Kmart) acquired the company and they converted their two Sports Giant stores to Sports Authority locations.
In 1995, having grown to over 135 stores, Kmart spun off the sporting goods chain. In 2003, Gart Sports (which was built through a "mish-mash" of mergers consisting of Gart Brothers' Sportscastle, Hagan's Sports, Stevens Brown of Salt Lake City, Sportsmart and Oshman's) and Sports Authority merged and the combine retail portfolio took on the Sports Authority name in full by 2006.
That same year, "good 'ol private equity" stepped in (Leonard Green & Partners) and purchased the retailer. As is the pattern of much of what private equity touches in the retail world, Sports Authority declared Chapter 11 bankruptcy in March of 2016.
Despite attempts to avoid liquidation, including talks with Academy Sports + Outdoors and Dick's Sporting Goods, the bankruptcy filing was converted to Chapter 7 in mid-2016 and all locations closed.
Today, if you type in the Sports Authority domain, it takes you to the Dick's Sporting Goods website.
