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The role of technology in industrial real estate is increasingly influential, especially with advancements in artificial intelligence (AI) and other digital innovations. These technological changes are reshaping the demand and design of industrial properties in several ways.
E-Commerce As A Major Disruptor
Over the past 10 years, the shift from traditional brick-and-mortar stores to online shopping platforms significantly impacted the CRE industry. This shift has led to a decrease in demand for traditional retail storefronts and an increase in demand for industrial spaces, such as warehouses and distribution centers, particularly due to the higher space requirements for handling returns in e-commerce operations.
Influence of AI & IoT on Operational Efficiency
Technologies such as AI and the Internet of Things (IoT) are revolutionizing the management and operation of industrial properties. AI models in IoT-connected devices, like heat pumps, can predict heating and cooling needs, thereby improving efficiency, and reducing emissions. This approach turns HVAC systems into proactive rather than reactive elements of building management.
Drones & AI in Property Management
Drones are increasingly used for property inspections and surveys, providing high-resolution aerial views and structural inspections. AI-driven tools, like chatbots and predictive maintenance software, are being employed in property management to enhance operational efficiency and tenant services.
Digital Transformation & Cybersecurity
The integration of technology is not without its challenges. For example, privacy and cybersecurity concerns arise as more data is generated and stored. CRE firms must prioritize securing this data to protect against cyber threats and data breaches.
Smart Contracts & Blockchain
Blockchain technology offers potential game-changers like smart contracts, which could simplify and secure transactions. Although still in the early stages of adoption, blockchain and smart contracts could eventually automate many aspects of the leasing and sales process, reducing the need for middlemen and enhancing transaction security.
Challenges in Digitalization
Despite these advancements, the industry faces challenges in digital upskilling. Many professionals in the sector may lack the necessary digital skills, and there is a need for continuous training and skill development to keep pace with technological advancements.
Technological advancements, particularly in AI, are significantly influencing the industrial sector, impacting everything from operational efficiency to the very design and utilization of spaces. As the industry continues to evolve, embracing these technologies will be crucial for staying competitive and efficient.
