As we’ve discussed in our last few blog posts, COVID-19 has completely reshaped commercial real estate and property management. Granted, the industry was already undergoing some serious changes before the pandemic, but now practically every major real estate sector is under pressure. Short-term rentals and Airbnb’s have taken a beating, with many having been forcibly liquidated. Meanwhile, flippers and other investors with locations requiring rehab have to bring their properties to market when people often aren’t allowed to physically visit them.1
On top of this, millions of Americans have been forced to file for unemployment over the last few months, putting the industry under considerable financial constraints. The result is that the weight of the recession has come down heavily on landlords due to the general lack of aid or attention from local, state, and federal governments.2 As such, property managers need to take their own measures to adapt to these various industry disruptions. One major trend that’s taking hold: the accelerated adoption of PropTech.
What is PropTech?
In an article published earlier this year, P. Wayne Smith describes PropTech as “a simple definition to mean technology that can be applied to any part of the lifecycle of real estate,” encompassing everything within “the construction, investment, sustainability, management and occupation of real estate assets.”3 This includes many of the technologies that we covered in our previous blog posts, such as COVID-19 tracking apps, thermometer screenings, and video conferencing software.
Yet while some of these tools were specifically developed with COVID-19 in mind, many of them are likely to stick around long after the pandemic ends. Because while it can be tempting to hold out hope that we can go “back to normal” after the virus is gone, the truth is that the current industry-wide changes that are taking place may outlast the pandemic entirely.4 For instance, experts are predicting that millions of Americans are planning to relocate due to the increased acceptance of remote work.5 Property managers cannot afford to assume that these changes are only temporary, and should take steps to not only to adopt new digital tools, but to reconsider how they do business.
The Digitalization of Day-to-Day Business Activities
One change that the pandemic has brought with it has been the deferment of business travel, which has certainly been a major blow to short-term real estate.6 However, this trend is likely to continue well after the pandemic ends, as some predict that companies will reduce business travels in the long-term in order to cut unnecessary expenses. After all, why bother paying for travel fare when you can easily meet with partners or clients through Zoom or Skype? 7This applies to tenants too: property managers who have invested in technology to automate communications with tenants are often less likely to see late rent payments from them or have the payments slip by unnoticed.8
Communications aren’t the only aspect of property management that’s bound to change though. Property managers have already digitized their accounting processes with cloud-based software, which allows them to collect rent while reducing face-to-face interactions. There are also new tech services being implemented that are specifically designed for arranging and managing maintenance requests to reduce the need for visiting properties in-person.9 These services have all proven beneficial during the pandemic, but they also offer advantages that make them worthwhile in a post-pandemic environment.
Despite the fact that most of these technologies are about to avoid in-person interaction, there are also a number of PropTech offerings that could prove useful when people inevitably return to the office and starting meeting up face-to-face. This might seem like a long-shot to some, especially considering how popular remote work has proven to be in some circles, but seeing a number of technologies being introduced that will allow the office to deliver an experience that can’t be replicated at home, from 3D printers to augmented reality. From virtual showings to property management, there are PropTech tools out there for every major purpose, and beyond their benefits in the current moment, they also can help property managers save both time and money.10
The New Normal
Although the COVID-19 pandemic has brought uncertainty, chaos, and changes to the real estate market, property managers have found several ways to utilize technology to mitigate its impact and adapt to their evolving circumstances. While it’s tempting to want to go back to “normal” once the pandemic is over, the many PropTech innovations that we’ve seen have shown that we can do better than “normal.” We can learn and grow from these difficult circumstances, provide tenants and other stakeholders with the best possible experience in the process!
1. Ransley, L. (2020, July 23). Council Post: What The Pandemic Has Taught Landlords About Utilizing Technology. Forbes. https://www.forbes.com/sites/forbesrealestatecouncil/2020/07/23/what-the-pandemic-has-taught-landlords-about-utilizing-technology.
2. Ransley, L. (2020, July 23).
3. Smith, P. W. (2020, May 6). COVID-19: The Role of PropTech in Assisting Owners, Managers, and Occupiers of Real Estate Safely Return to Work. National Law Review. https://www.natlawreview.com/article/covid-19-role-proptech-assisting-owners-managers-and-occupiers-real-estate-safely.
4. Ransley, L. (2020, July 23).
5. Ioannou, L. (2020, October 29). Vast migration of over 14 million Americans coming due to rise in remote work, study shows. CNBC. https://www.cnbc.com/2020/10/28/vast-migration-of-over-14-million-americans-coming-due-to-remote-work.html.
6. Ransley, L. (2020, July 23).
7. Rosen, E. (2020, May 28). Coronavirus: How the world of work may change forever. https://www.bbc.com/worklife/article/20201023-coronavirus-how-will-the-pandemic-change-the-way-we-work.
8. Ransley, L. (2020, July 23).
9. Ransley, L. (2020, July 23).
10. Ransley, L. (2020, July 23).