In a recent webinar hosted by Bisnow, our parent company, speakers Jim Whalen (SVP & CIO, Bixby), Dusti Wofford (Global Head of Digital & Technology Strategy, Trammell Crow), Ryan Piaskowski (Global Commercial Leader), and Jon Perry (Account Executive, Siemens) discussed the challenges that face modern commercial real estate (CRE). This webinar covered high vacancy rates, rising mortgage costs, and evolving tenant expectations. This digital conference also discussed digitalization as an emerging strategy for modernization and resilience.
Learn more about how these industry leaders are using digital tools and strategies for reshaping CRE operations and investment approaches.
The Case for Digitalization in CRE
As of November 2024, national office vacancy rates were at 19.4%, according to Commercial Edge data, and mortgage loan rates at 20-year highs, according to Bankrate mortgage data. These are just some of the many challenges that CRE faces. It’s the responsibility of owners and developers to seek ways to optimize operations while maintaining competitiveness.
What does digitalization mean in real estate?
Digitalization — a process that connects building systems, enables automation, and integrates data — is presented as a solution that enables measure-ability, predictability, and flexibility in CRE.
Digitalization integrates with CRE in a few key areas highlighted by Jim Whalen of Bixby:
Building performance
Access control
Automation
“Amenitization” (adding tech amenities to properties) services
Smart technologies (mobile-enabled credentials)
Whalen emphasized the importance of aligning digital strategies with business priorities. He credits key digitalization technologies to creating premier spaces that attract high-quality tenants.
What Digitalization Means in Commercial Real Estate (Examples)
In the CRE industry, digitalization can refer to a broad range of transformations and transitions toward digital technology that’s more efficient and effective. Digitalization can improve and enhance existing procedures, or even completely reinvent them. Here are some examples of digitalization within CRE.
Virtual tours and augmented reality
Digital or virtual tours are a solution that involves taking images and videos of a property for a tour that isn’t constrained to the physical space. This digitalization broadens the range of potential customers that can view and “tour” your properties. Many virtual tours also use augmented reality effects, so the properties can be virtually “staged” with furniture, decor, and other fixtures.
Digital twins
A digital twin of a property is a 3D-modeled, virtual recreation of a building or space that can be modified, altered, and decorated to test different iterations of the property. Being far more feasible than physically staging and renovating a space, digital twins act as test zones for developers and CRE professionals alike.
Self-service portals
As more transactions occur digitally, self-service portals become a more viable solution for homebuyers, leasees, and other entities that need to make payments, fill out applications, and perform other actions asynchronous from a CRE organization. The benefit of a self-service portal is being able to process more customers in an easier, streamlined format that isn’t constrained by your organization's size.
Targeted lead generation
Digitalization has also brought a higher volume of high-quality data being collected about your prospects, customers and audience. When expending marketing resources, higher quality data leads to more targeted lead generation and more efficiency in reaching your target audience. Digital technologies like Biscred lower CPL and optimize CRE marketing campaigns.
CRMs
Customer relationship management systems are often used in conjunction with targeted lead-generation technology. As you contact, pursue, and nurture leads, your organization will need to organize the higher volume of customers that you deal with. A good CRE CRM provides insights into client behaviors and automates certain marketing tasks.
Paperless transactions
An all-around positive for just about every industry experiencing digitalization is moving toward paperless transactions. Besides lowering material costs, paperless transactions are easier to store, sort, and find at a later date.
Overcoming Challenges: Stakeholder Alignment and Scalability
John Perry of Siemens highlighted the complexities of scaling digitalization across large property portfolios. “You have to have alignment among the key stakeholders,” he noted.
Whether retrofitting existing buildings or integrating new systems into developments, engaging decision-makers early ensures smoother transitions and reduces disruptions. Dusty Wofford, Global Head of Digital and Technology Strategy at Trammell Crow, echoed this sentiment, stressing the importance of aligning technology investments with long-term business strategies.
Wofford also emphasized scalability, noting that building projects today must account for future technological needs. “If solar panels or net-zero carbon goals are part of industrial building strategy, decisions like roof thickness or green building materials must be addressed during the planning phase,” she explained.
Data-Driven Decision-Making
Ryan Pszakowski from UL Solutions shared insights into leveraging data for operational optimization, including autonomous systems that adjust energy usage based on real-time conditions. A building may have an energy meter that’s connected to a building’s management system. This system then reports data to your organization so you can implement autonomous operations based on historical data. Pszakowski also advocated for “digital twins” — citing an example of simulating where fire sensors are, as well as CCTV camera locations.
Dusty Wofford underscored the critical role of data in driving ROI and improving tenant experiences. “AI and advanced analytics only work if you have clean, integrated data,” she said. Tracking measurable outcomes, such as cost savings, tenant retention, or energy efficiency, ensures technology investments deliver tangible value.
Security in the Age of Connectivity
As digitalization expands, security is still a major concern. CRE owners must address vulnerabilities in operational technology (OT) systems, such as building management and access control networks, which can be separated from direct IT oversight. Whalen shared how Bixby incorporates cybersecurity into its digital strategy so that all security practices used in IT are also applied to OT to ensure that systems are protected against threats.
John Perry noted that while some clients are making strides in this area, many still underestimate the importance of IT-OT convergence. He urged organizations to integrate cybersecurity protocols into their planning processes to mitigate risks and protect tenant data.
The Road Ahead: AI and Beyond
Looking to the future, the panelists agreed that artificial intelligence (AI) and cloud-based systems will play a pivotal role in CRE digitalization. Whalen predicted that as the industry adopts AI-first architectures, it will unlock new efficiencies and capabilities. However, both Wofford and Pszakowski emphasized that AI’s success hinges on having high-quality data that AI can utilize.
Key Takeaways for Digitization in CRE
Start with strategy: Digital investments must align with business goals and include input from all stakeholders. Identify a few key digitalization areas that your organization can take advantage of and ensure that your business’ goals are aligning with future changes.
Leverage data: Clean, integrated data is the foundation for AI, analytics, and operational efficiency. As you collect data, ensure that this data isn’t isolated within a “silo” that your organization isn’t accounting for. Data enrichment software can potentially break down these data silos.
Focus on security: IT and OT systems must be integrated and secured to protect operations and reputation. Ensure that your IT security practices are still implemented in any new digitalization.
Plan for scalability: Even if not immediately implementing new technology in CRE, organizations need to prepare for the eventuality of digitalization. This includes preparing buildings for future technology, as well as upskilling your workforce with employees who are comfortable with new digital technologies.
Prepare for AI: AI-driven solutions are becoming more mainstream, so CRE leaders must become accustomed to utilizing LLMs and other AI-powered processes. This includes prioritizing the collection of high-quality data that AI can eventually use.
Digitalization is no longer optional in CRE; it’s a business imperative. By adopting thoughtful, data-driven strategies, industry leaders can navigate today’s challenges while securing their organization’s future.
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