Commercial real estate is the right Nashville investment, and technology plays a significant role in boosting sales, profits, and interest in investment properties. Not only is it affecting these areas, but technology has become ingrained in the ways companies operate, promote, and increase profits in their business overall.

The impact of modern tech and 5G-powered communications is transforming the ways people invest in restaurant spaces, entertainment venues, and shopping malls in Nashville. Keep reading to learn how technology is impacting commercial real estate.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

What Is Proptech, Exactly?

Sometimes called "RE Tech" (real estate technology), proptech or property technology involves the integration of high-tech applications and information platforms that streamline commercial investments and the way they operate. For investors and real estate professionals in particular, proptech is changing the best ways to find a commercial property, handle deals, and navigate communications with co-investors and tenants. This gives many a competitive edge concerning how properties are marketed and move more quickly to new owners.

Is Technology Disrupting Commercial Real Estate?

In short, yes. But that's not necessarily a bad thing. While the word "disruption" has a negative connotation, in the world of real estate, "market disruptions" aren't necessarily referring to changes in a negative way. Market disruptions are guiding society and businesses to greater levels of technological sophistication.

These transitions bring to mind other disruptions of tech that alter the way we work and live. Examples were the demise of pagers instead of cell phones and reduced interest in CDs when iPods and portable media players were created.

Let's talk about some of the biggest technology trends that are changing commercial real estate.

How E-Commerce Is Affecting Commercial Properties

In commercial real estate, the e-commerce revolution has drastically disrupted the traditional retail storefront industry. Buyers are increasingly shopping online, which isn't all bad. Some positives for current owners might be reduced overhead and staffing expenditures, while the room is created for warehousing goods.

In general, some businesses are closing brick-and-mortar locations, but warehousing space is rising in value. Not only is there greater demand for industrial warehouses, there's greater demand for modern proptech solutions in those properties.

How The Rise of Remote Work is Affecting Commercial Real Estate

In 2021, 68% of the workforce preferred working remotely. In 2024, a whopping 98% of the workforce want to work remotely or in a hybrid model. A full 16% of companies have eschewed physical office space altogether, operating fully remotely. It's very clear that the rise in telecommuting is not a passing trend.

The availability of free and secure video, chat, and email applications eases communication, streamlines projects, and even makes signing and sending documents possible without needing to commute to work. Some business owners also find that remote or hybrid work models decreases their operating expenses, as they can cut down on how much office space they require.

This presents a challenge to owners of office space, who must contend with the appeal of remote work to attract tenants. Upgrading to provide cutting-edge conveniences in modernized offices is working in some markets, while others are converting older offices into multi-unit residential spaces. Pivoting to offer coworking spaces is another angle to consider.

Telecommuting is also affecting how commercial real estate agents and investors operate. Agents and other real estate professionals have a greater ability to assist with property transactions from home. It's eased the concept of dealing with international investors and buyers from anywhere in the world. On the investor side, it's easier than ever to view properties remotely, allowing investors to quickly locate prime opportunities.

An added perk is fewer carbon emissions that result from commuting, which is better for the environment. This pairs well with the growing emphasis on environmentally sustainable proptech.

Higher-Level Infrastructure Expectations

The biggest challenge of commercial property owners is retaining good tenants, and in the realm of proptech, tenant expectations are higher than before. With the rise of smart tech, the Internet of Things, and ever-increasing digital connectedness, tenants expect commercial properties to have at least some technological conveniences. As these technologies become increasingly common, the baseline minimum that tenants expect will rise accordingly.

Commercial property owners will need to continually invest in technological upgrades to remain competitive. Power, wiring, cabling, wifi, 5G, and other technology infrastructure to support the level of technology tenants demand will increase property desirability and value.

Serious investors expect to easily find commercial properties wired for technological installations and properties that already have the technology in place. These real estate investors are willing to pay more for these buildings, and owners see better rental rates when leasing. In essence, the ROI potential is there with these integrative abilities.

Investors need to be receptive to market disruptions and evaluate what direction things might go in the future, along with increased tech.

How Proptech Is Improving Property Management

Both owners and tenants are seeing improved experiences when it comes to operating commercial property. A few proptech innovations for commercial property management include:

Digital Twins

A "digital twin" is a virtual representation of a real object or space, constructed using real-world data collected by IoT sensors and some 3D modeling. This means that users can test various scenarios without affecting the real-world system—for example, you could test how much energy you could save by upgrading an HVAC system before committing to the expense.

Digital twins have revolutionized property management and maintenance in the commercial sector. These virtual replicas serve as a bridge between the physical and digital worlds, allowing property managers to:

• Conduct predictive maintenance
• Optimize building operations
• Simulate different scenarios
• Fine-tune systems like HVAC for maximum energy efficiency
• Reduce operational costs
• Enhance the longevity of building components

By utilizing digital twins, property managers can improve efficiency and save costs in their operations.

Sustainable Technology

Environmental considerations have increased in importance among investors, tenants, and property owners. Commercial real estate owners are going green not only to minimizing harm to the environment, but also for immediate practicality in reducing operating expenses. Energy-efficient materials, water efficiency, solar power, green roofs, automated energy management systems, and other sustainable technology trends will become increasingly vital in the commercial real estate sphere.

A few green technology upgrades for property owners to consider include:

• HVAC and lighting controlled by smart tech, enabling systems to predict where and when energy is needed and reducing unnecessary use
• Energy-efficient windows or even smart glass windows to reduce heating and cooling expenses
• Passive solar construction or solar panels to reduce energy costs
• Low-use water fixtures to cut water bills

Enhanced Tenant Experience

The tenant experience is undergoing a profound transformation thanks to property management software. Here are some key benefits:

• Real-time data access enables managers to address maintenance issues promptly, which is key to tenant satisfaction.
• Tenants benefit from user-friendly portals where they can easily submit and track maintenance requests.
• AI chatbots offer continuous client support.

The convenience of online rent payments and digital lease signing adds another layer of satisfaction, making the entire tenant journey smoother and more enjoyable.

Streamlining Commercial Operations

Adapting to the digital world is worth any investment of time and money. Artificial intelligence with technological solutions is rapidly streamlining operations in industries across the board. New leads can be tracked, tenants can be communicated with digitally, and the workflow can be simplified using automated actions that save staff time and reduce overhead costs.

Proptech is beneficial to commercial real estate developers, property management companies, and the teams that assist them with projects. Artificial intelligence can analyze and manage lighting, HVAC installations, security monitoring, and keep track of maintenance and repair records and requests. Investors of properties can reduce operating costs while keeping tenants happy and lease renewals high.

How Proptech is Improving Efficiency in the Real Estate Industry

For investors and real estate professionals themselves, proptech is making it easier than ever to optimize processes, improve experiences, and make informed decisions. Let's get into additional specific ways technology transforms commercial property and business operations.

Advanced Visualization and Access Technologies

Tenants, landlords, and real estate practitioners can reap numerous benefits with internal and client-facing tech applications. 5G cell networks can handle more users at fast data transmission speeds. This makes advanced access technology optimal for tasks such as virtual reality tours, meetings, security monitoring, calculating inventory, and processing tenant payments automatically. Team members can easily interact, streamlining processes for both customers and staff.

Drive Engagement & Profits with Social Media

More people have access to smart and internet-connected devices and readily use them for everything from retail and home shopping to interacting with others. Commercial businesses can boost sales, drive interest in their business, and incite community engagement by promoting their efforts through social media. A strong presence on social media is almost mandatory for running any successful enterprise, from standing out as a real estate agent to marketing a commercial property.

Remotely Train Employees

Using modern technological solutions eases the application and screening processes, staff training and testing, and scheduling, and communicating with everyone in the company is instant. With integrated technology, commercial real estate agents and investors can save time and money.

Cloud-Based Solutions Help Track Data

Companies embrace data literacy with open arms, and technology integration lets entrepreneurs and investors record and maintain accurate data using centralized information cloud-based solutions. Anyone involved can access these documents, create new ones, and interact in real-time to tap into the most recent market developments for timely responses to changing conditions from anywhere.

Ongoing Project Updates are Game Changers

The last few years have seen an influx of web conferences, meetings, and team gatherings. Chat functions, live streams, and the ability to share screens, charts, and documents with a few clicks change the way business entities manage company projects and operations. Faster actions, stronger collaborations, and automatic recording features boost profits and productivity and permit impromptu changes to be known by all.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

Technology Empowers Commercial Real Estate Investors

Find out more about what tech advances can boost your commercial investment efforts in Nashville, Tennessee. With the world changing rapidly and commercial real estate booming in Nashville, it's essential to utilize every available tool to be successful with Nashville commercial investments.