Is it Time for Innovation in the CRE Industry?

David Cohn
Mar 23, 2023
Industry Insights

Innovation is essential in any industry, and it's growing ever more critical in commercial real estate (CRE). The COVID-19 pandemic has led to the development of new ideas and strategies for success in this industry.

Staying ahead of the competition is imperative, and having an innovative mindset will be essential when it comes to remaining successful long-term.

Thankfully, with its ability to transform and grow along with our changing times, this industry gives individuals plenty of opportunities to take advantage. Here are some innovation trends to note going forward:

Rising demand for sustainability in commercial real estate

The demand for sustainability in commercial real estate will continue to rise as the world prioritizes environmental protection. Both tenants and investors are seeking out properties and companies that have strong sustainability practices, as shown by this study (done in 2020).

To remain successful, real estate professionals must stay current with new sustainable initiatives and technologies, as failure to do so may result in losing business to competitors.

Additionally, building sustainability requirements may become stricter in the future, as many states have implemented laws mandating commercial facilities to meet specific standards.

For example, California has passed a law that requires new buildings to be powered by solar energy—which could mean that older buildings without solar power will eventually struggle to compete with more recent solar-powered properties.

Furthermore, some sustainability initiatives carry penalties for non-compliance, which can significantly impact the profitability of an investment.

Therefore, as the world's sustainability goals become more ambitious, real estate professionals must strive to achieve these goals to remain competitive.

Cultural shifts due to the pandemic

A JLL study that was also conducted in 2020 found that four major factors have the most significant impact on CRE evolution:

(1) the office,

(2) remote work,

(3) commuting patterns, and

(4) design technology.

Notably, most people now expect remote work to change the CRE business forever—well after the pandemic.

Office spaces will need to be optimized for video calls as companies adapt to more employees working remotely (at least some of the time). This will require more enclosed spaces and fewer open floor plans, as well as smaller offices to accommodate fewer on-site employees.

Additionally, there may be a shift in demand for office spaces in less centralized locations or rural areas because people have moved out of the cities during the pandemic.

Commercial real estate investors should keep these changes in mind and consider less centralized locations or new locations to benefit from the changing demands in the market.

Increasing demand for multifunctional buildings

Real estate professionals will need to be innovative and creative in designing buildings that can serve multiple purposes.

For example, coworking spaces are likely to be popular but to be successful, and they need to cater to the requirements of remote workers who want to be near others during the workday. This means that the space should be social but not distracting.

In the future, commercial real estate buildings will likely offer a mix of office space, retail stores, and other businesses such as yoga studios and salons. Some of these buildings may even include residential living.

As a result, CRE investors should consider focusing on properties where mixed-use is an option because these assets will likely be more profitable.

Embracing robotics, AI, and other technologies

There is a clear trend towards increased use of technology in society—from smart buildings to machine learning. Forward-thinking CRE professionals are taking advantage of these advancements to transform how they operate their businesses.

  • The use of robotics in CRE has been rapidly growing, particularly in drone-assisted operations. Drones are now being used to tackle various challenges in the industry, including aerial mapping of properties, which can now be done quickly and cost-effectively.
  • Drones also enable developers and marketers to share development progress through aerial images. Additionally, they help manage large construction sites by allowing managers to remotely monitor material stocks and inventory.
  • What’s more, drones equipped with specialized imaging cameras can detect major issues such as gas leaks or identify areas for energy optimization. As a result, this technology is expected to become a crucial aspect of future CRE operations as the industry moves towards cleaner and more energy-efficient buildings.
  • Another application of robotics in CRE is the use of robots to map interior spaces and present them to prospective tenants. In addition, some CRE companies are now using telepresence robots to show properties and interact with clients, which is more convenient for tenants and saves travel time for the agents.
  • Machine learning can improve building performance by using data analysis to monitor wear and track performance variables such as vibration to determine when maintenance is needed.

This technology can also track patterns of use by occupants, which increases efficiency and integrates with building infrastructure such as variable frequency drives that control motors used in HVAC systems.

  • Another emerging trend in the industry is energy smoothing, which is the practice of saving electricity during low-demand hours and releasing it during peak hours, similar to how Con Edison uses local generators.
  • Brokers can enhance their offerings by creating high-quality 3D walkthroughs of properties which include 4K resolution photos, detailed floor plans, videos, and interactive maps that provide clients with real-time information about listings. With the advancements in technology such as Wi-Fi 6 and 5G, which offer faster speeds, more and more information about properties can be digitized.
  • The growth of e-commerce is also driving the use of robotics in logistics, leading to changes in the logistics assets landscape with the emergence of micro-distribution centers and multi-purpose retail spaces.
  • A Commercial Real Estate Development Association (formerly NAIOP) report examines these trends and how robotics is enabling them. In addition, the report highlights that previously-underutilized spaces—such as unused areas in malls or old parking garages—are now being repurposed as distribution sites to address the challenge of last-mile logistics. These new logistics assets are located in urban and suburban centers, and they are blurring the lines between logistics and retail.
  • Automated storage and retrieval systems now allow landlords and owners to establish logistics mini-sites within existing buildings.

As a result, the need for on-site staff is decreasing, enabling companies to develop more significant logistics assets in more remote areas where land and operation costs are cheaper.

The report cites ABI Research's prediction that by 2025, some 4 million commercial robots will be in use in over 50,000 warehouses.

Other trends in CRE innovation

The Deloitte Global report, "Innovations in Commercial Real Estate - Preparing for the City of the Future" discusses how technology and changes in consumer behavior will together affect the CRE industry.

The report also explores how factors such as demographic changes, urbanization, aging population, and lifestyle preferences of different generations—as well as concerns about security, climate change, and resource scarcity—are driving the need for innovative approaches to managing commercial real estate. Here are some of its key findings:

  • The future of mobility—including changes in transportation patterns, the growth of shared vehicle access, and the emergence of fully autonomous vehicles—will have a significant impact on the use and demand for commercial real estate.
  • Additionally, commercial real estate owners need to prioritize the health and wellness of tenants by considering factors such as thermal comfort, daylighting and lighting, and interior layout.

There is also a growing trend towards biophilic architecture, which is an innovative way to integrate natural environments into CRE design with the aim of bringing humans closer to nature. Biophilic features essentially bring the outdoors in.

Common examples include skylights for natural light and green walls to bring life indoors. The presence of water also adds beauty and tranquility with elements like fountains or ponds.

  • The use of Internet of Things (IoT) technology in building management systems can provide benefits such as cost savings and operational efficiency.
  • Advances in 3D printing technology, which have already been used to construct low-rise buildings in China and Dubai, are likely to reduce construction costs, improve operational efficiency, and enhance the quality of construction.
  • Furthermore, using predictive analytics and demographic data will help commercial real estate owners anticipate the needs and preferences of their tenants and align their infrastructure accordingly.

By leveraging these five trends strategically and in a timely manner, CRE companies will be able to equip their buildings for the future.


Efficiency and dependability are always crucial in any commercial property, but they become even more critical as CRE operations adapt to the new realities post-pandemic and the need to do more with less.

Given the rapid changes and advancements in the industry, it is crucial for CRE professionals to understand emerging trends and pick out which ones they can leverage to stay ahead of the competition and protect their investments. Capital Investors Direct keep ourselves updated with latest CRE industry trends.