Real Estate Industry Being Changed by Technology Amidst Economic Recovery

Posted by Staff Reporter media@realtytoday.com ) on Sep 29, 2015 06:57 AM EDT

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Representatives from the Federal Bank of Atlanta spoke during the annual corporate cabinet retreat of the Alabama Center for Real Estate at Lake Martin on a variety of topics that may affect residential and commercial real estate. The retreat occurred just a week after the announcement of the Federal Bank that it will maintain the near-zero interest rates.

In a blog post by the Alabama Center for Real Estate, Brian Bailey, senior financial policy analyst in the Supervision and Regulation division of the FED's Atlanta bank, was reported to be the one who facilitated the speech during their retreat.

According to Bailey, real estate investors and owners have been learning to adopt their systems and strategies to newer business models that are driven by technology. This is the trend as the economy continues to bounce back from the Great Recession.

"Employers are putting more employees in the same amount of square footage, or smaller square footage," he said. "What that's leading to, and we're seeing it, is that technology is accelerating the obsolescence of some of the buildings," said Bailey.

Bailey told the corporate cabinet members of ACRE that the adaptation of the newest technological trends can be a little bit problematic for older office buildings in metropolitan areas, but it also comes with its fair share of opportunities.

"In one respect, an accelerating obsolescence creates more risk for the real estate environment and the lending environment," Bailey said. "On the other side of that, it creates opportunity for the marketplace to come in and reposition the buildings," he added.

Bailey also shared to the cabinet members that the use of drones in overseas retail industries is a hit, and he expects that this unmanned technology can also rev up the real estate industry in the United States.

"In the end, the drone may not end up looking like this (current drone model), but there's enough energy behind it that I certainly suspect ... the industry is going to give ... a very good shot [at] and [will] try to make it happen," Bailey said.

Bailey is also emphasizing the fact that consumers are now switching from brick and mortar options to online shopping because, "as consumers, there's no cost to change."