Welcome to uncertainty. The age of information has brought an unprecedented requirement for people, processes and technology to evolve quickly. Real estate must provide the same level of flexibility to adapt to or even anticipate the next big economic or social change. Therefore, investors as well as developers are attracted to opportunities that cover as many variables as possible.
Dallas was ranked among the best cities to work in technology in 2015, according to data on 200 locations by financial advice tech start-up SmartAsset. Cost of living is reasonable and the city’s three tech incubator organizations that emerged post-recession have accelerated tech start-ups and acquisitions. According to data analyst CB Insights, Texas had 22 tech companies in the IPO pipeline in addition to acquisition activity.
Nationally, firms employing fewer than 50 people are showing job growth outpacing larger firms by nearly five to one, according to the Urban Land Institute. Many of those firms are in the TAMI industry, defined as technology, advertising, media and information. Tech industry employees, about 4 percent of the workforce in Dallas, make 73 percent higher wages than the city’s average compensation, which bodes well for housing investment.
Smart Buildings Go Beyond ‘Nice to Have’
As consumers grow more technologically savvy (or dependent?), expecting to connect wherever they are, the building infrastructure and envelope itself needs to flex and accommodate next-generation technologies. Beyond that, the need to conserve resources is at play. Analysts are already recommending that technology and sustainability be factored into current asset valuations. A bad sustainability rating could result in valuation “brown discounts” for things like energy inefficiency or technology obsolescence.
With energy and water demands increasing globally, The Global Smart Building Market 2015-2019 report noted that the smart building market is expected to grow from $7 billion in 2015 to $36 billion by 2020, at a CAGR of 38% from 2015 to 2020.
Tied into the smart systems of buildings is the prediction that devices and platforms begin to learn the preferences of people and create a preferred “experience” for users…whether real or virtual. The potential for speaking to your home or office to get what you want — and having it speak back intelligently — is no longer just science fiction.
In the short term, developers of both residential and commercial real estate can anticipate continued requests for features and affiliated services that include physical and data security, multi-channel communications capabilities, climate controls and similar automated options. Real estate technologies must deliver on higher expectations for safety, efficiency and productivity.