Show Us Your Laptop Technology Trends for the New Millennium
by Jim Young
Even though commercial real estate and all its associated fees (estimated at $25 billion to $40 billion) represents one of the largest segments of the U.S. economy, it is one of the last major business sectors to automate. Many have questioned why it has taken so long. The most common responses have been, "With business so good there is no need," or "This is about having information that others don't."
The industry is finally looking seriously at technology as a means to improve an outdated way of gathering, organizing, analyzing, reformatting and distributing information. This change is being driven by the requirements of REITs and other institutions as well as ongoing financial pressures to improve the bottom line.
The Internet
In the beginning the Internet seemed like the perfect place to post property brochures. Even today many professionals see the World Wide Web as only a fancy electronic billboard. The public component of the Web is only the tip of the iceberg. The power of the Web lies just beyond the password. The most upsetting news about the Internet is the commercial real estate market's slow pace of adoption. Professionals in some of the largest organizations consider themselves lucky if the Internet access speed is 128K; today's standard is 1.5MB. You cannot understand how the Internet will be used in the future and how it will ultimately change the practice of commercial real estate if your access speed is slow.
The Intranet
The company intranet will quickly become the bloodstream of every business, including commercial real estate. Companies that have not moved their 50-year-old processes out of file cabinets and onto the net within the next two to three years will not be able to compete effectively. Organizations that move information manually will become inefficient and ineffective.
The company intranet will contain contact and portfolio management, human resources and commission processing, as well as employee birthday announcements. It will become the very place where everyone comes to work every day regardless of whether they are in the office or not.
Most organizations are creating these systems using old technology, such as HTML or simple file directories. Systems need to be designed using database technology. At the end of the day, everything needs to be in the database and the databases need to be integrated. The concept of an integrated commercial real estate information system is at the heart of the company intranet.
The Extranet
The extranet is the same as the intranet, it just gives people outside your organization, such as clients and vendors with security clearance, the right to access certain information in your electronic file cabinets, seven days a week, 24 hours a day.
The most obvious extranet application is project management, where clients, vendors, brokers and others involved in the transaction can see the team roster, change the status of a task or view the contract or floorplan.
Data Warehousing
The end result of a correctly designed information management system is a powerful tool called a data warehouse. Instead of being kept in manila folders, file cabinets, briefcases and automobiles, data resides in a well organized, centralized repository. Only when this warehouse has been implemented can a firm mine that data for important information, such as vacancy trends, comparative sales analysis, etc.
Bandwidth
Today's average firm is accessing the Internet at 56K or 56,000 bits per second. T1 connections and cable modems offer speeds up to 1.5 million bits per second or approximately 30 times faster. To say an organization does not need high-speed Internet access would be like saying professionals could use cups and string for their phone conversations. Everyone in a 21st century commercial real estate operation needs to be on the net every minute they are in the office and it must be at least at T1 speed.
Internet Based Collaboration
Internet meeting technologies such as Picturetalk and Microsoft Net Meeting, have been available for more than two years. These technologies allow groups of people to view a spreadsheet under discussion from anywhere in the world, provided they are logged onto the meeting. When the topic changes to the lease, the broker can open a Microsoft Word document and the entire group sees the lease. Some technologies even allow for remote parties to modify the document. This will not replace the personal contact, trust or handshake of the first meeting. It, however, will replace the wasted time traveling to the second, third and fourth meetings.
Virtual Tours
The concept of 360-degree photography and the ability to view a project has been around for almost three years. Companies such as IPIX, Bamboo, Infinate Pictures and others all have technology that allows for an individual to view a 360-degree picture over the Internet. This technology has taken some time to catch on because the speed of the Internet or bandwidth has not been enough to make this a good user experience. With improved software and faster access, people are beginning to use this technology to evaluate space initially. This will not replace the physical tours, but it will eliminate numerous prospects prior to the actual site visit.
In a recent site selection process, an organization had to make a fast change in its site selection. This normally would have put four people on an airplane at a moment's notice, using two days time and a great deal of money. Instead, two individuals from different locations in California and two from Washington, D.C., logged onto an Internet site, viewed multiple 360-degree photos of the new site and made a decision on the spot.
Web Appliances
Many new devices are making their way to market, such as digital wallets, e-books, palm pilots, digital phones/browsers, and digital cameras with wireless connections to the Web. They are first generation, tactical responses to specific applications and will have a real estate professional looking like an electronic gadget salesperson. It is important not to let the short-term benefit of these devices hinder the long-term information strategy.
The desktop computer as we know it is trending into obsolescence. Gone are expensive, hard to use computers that require a great deal of maintenance. They will be replaced with inexpensive ($150 to $300) web terminals. Sun Micro Systems and IBM have recently announced these devices. This means a dramatic shift in information technology dollars. Companies that used to spend 80 percent of their budgets on infrastructure and 20 percent on business process improvements will find those numbers gradually reversing.
Commercial Real Estate Portals
The workplace has traditionally been an office and a desk. In today's digital world, there are numerous commercial portals on the Internet in which a broker can access listings, lending information and manage a project. The first phase of this trend provided broker-centric systems on which a broker enters the listing for an owner. New sites will provide owner-to-owner and owner-to-user capability. Access to data directly by the owners will change the scope of brokers' involvement, but it will not eliminate them. New and higher skills will protect the professionals who want to maintain their involvement in this transaction.
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