The commercial real estate sector is notorious for being slow to adopt new technology. Is this a bad thing, or is this simply a reflection on the values of the industry?


The commercial real estate sector is a very risk-averse industry. This means that professionals in this industry are very cautious when it comes to investing or spending their money on new and unproven technology. The CRE industry also has expectations of high returns on investment. New technology could provide either a high or nearly non-existent return, possibly ending in a loss. These two characteristics make new technologies less appealing to the commercial real estate professional who prizes high returns on safe and proven assets and investments.


Commercial real estate is not an industry that is known to be very innovative, which means that you won’t see many new developments coming from this field. The lack of innovation and slow adoption by the CRE industry means the sector can miss out on early breakthroughs. At the same time, CRE benefits from not being an early adopter by saving money on research and development. It is easy to understand why CRE is often called a patient industry.


Despite slow adoption and hesitation by many professionals in CRE to adopt new tech, the industry stands much to gain from new technological developments. Artificial intelligence and science can provide greater insight into CRE industry professionals and investors. Progress in these fields can reveal new information on how climate, access to transportation, the economy, and trade can influence commercial real estate operations. New technology can also provide a more accurate picture of the value of an asset, and the maximum price people are willing to pay to purchase or rent a building.


The CRE is slow and cautious when it comes to new developments and business models. This does not mean that it does not utilize them or should not utilize them. CRE stands much to gain from new technology, but it is often better for CRE to wait and see how the latest tech is used in other fields before beginning to utilize it for itself. Expect the slow and cautious approach of CRE to continue, but don’t mistake this approach to a shunning of technology.