Industry insights

CRE tech news roundup: March 2020

From coronavirus to coworking, here’s the latest in CRE tech news:

Effects of coronavirus on global property markets remain uncertain

News surrounding the spread of the novel coronavirus (COVID-19) is rapidly changing on a daily—or even hourly—basis. Not only is it affecting individuals’ health across the globe, but it is also affecting countries from an economic and financial perspective.

While the stock market has taken a dive, central banks are showing an aggressive response. At this point, it’s too early—and the situation is too uncertain—to know the effects on the CRE market.

The good news, in this case, is that the real estate market is slower-moving and therefore not as volatile as the stock market. Any effects on CRE will depend on the magnitude of impact on the larger economy, but sources expect a rebound in the markets once the virus is contained.

1st fully autonomous construction machinery is offered commercially

Thanks to Built Robotics’ new software upgrade for excavating equipment, construction machinery can now operate autonomously or be piloted remotely. The software is the first of its kind available commercially in the U.S.

Remote workers can manage equipment through a web-based platform to complete common construction tasks, such as digging trenches or excavating foundations.

While the time it takes one machine to complete a task autonomously is comparable to the time it takes when piloted by an on-site worker, this software allows one operator to oversee multiple construction machines simultaneously.

As investors look at new construction opportunities, autonomous construction machinery could yield efficiencies. 

Amazon introduces “checkout-free” technology for retail

Redefining the concept of “grab and go,” Inc. opened Amazon Go Grocery, a full-size, cashier-less supermarket, in Seattle.

Using a combination of cameras, sensors, and software, shoppers can move around the store, select items, and simply walk out of the store without stopping to scan items and pay.

The company plans to license this cashier-less technology to other retailers. Depending on its success, CRE could see its application expand into different retail spaces. Corporations can use data to better understand shopper behavior, monitor consumer preferences, and manage inventory.

Funding for online retailers helps pave the way into brick-and-mortar

Fifth Wall Ventures recently closed a $100 million fund to connect the fund’s investors—retail landlords like Acadia Realty Trust and Macerich—with e-retailers who are looking to set up a physical shop. Assistance from the fund provides a way for online brands to get into a brick-and-mortar space owned by one of the fund’s investors.

Because venturing into real estate can be risky for online retailers, this fund eases the transition. As e-commerce brands face challenges with brand differentiation and high return rates, more retailers could dip a toe in CRE.

Landlords see coworking rents as equivalent to traditional office tenants

New research from MIT found that from a landlord’s perspective, coworking leases yield a similar level in effective rent payments as traditional office tenants.

Coworking tenants typically have higher base rent and longer lease times. But incentives like months of free rent and higher tenant improvement allowances cause the overall pricing to balance out.

Coworking isn’t going away. Coworking providers offer flexibility, innovation, and services that are enticing more companies to sign on. And landlords view coworking entities as attractive tenants because they serve groups that may translate to future tenants when they outgrow the coworking space. A coworking tenant also has the potential to pull in tech-savvy companies to other spaces within the property and contribute to a vibrant community feel.

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