by Lachlan MacQuarrie

Introduction

In today’s rapidly evolving commercial real estate (CRE) landscape, technology is no longer a mere operational tool but a strategic asset. Yet, many firms find themselves ensnared in short-term thinking, addressing immediate issues while neglecting long-term technological advancements. This oversight can lead to outdated systems, increased cybersecurity risks, and missed opportunities for innovation.

The Short-Term Trap: Why Real Estate Firms Struggle

Several factors contribute to this short-term focus:

• Market Pressures: Asset classes like office and retail are showing early signs of recovery, as tenants are returning to the table and beginning to think about future stability and long-term needs. While not an earth-shattering shift, the market is no longer frozen in fear. Businesses are looking ahead with a longer perspective, which means increased movement in the CRE space.
• Reactive Industry Culture: Traditionally, CRE has been slow to change, with a tendency to address problems as they arise rather than proactively planning for future technological needs. It also doesn’t help that technology has often been viewed as complicated, with a lack of clear accountability for innovation. Varied technology expertise and inconsistent implementation skills have frequently led to orphaned ownership of innovation, keeping it beyond traditional focus areas.
• Leadership Overload: Executives are often consumed by pressing challenges, such as shifting tenant demands, ESG compliance, and evolving financial conditions. The recent drop in interest rates is unlocking new investment opportunities and improving financial conditions, making capital deployment more feasible. However, this shift also introduces distractions, as leadership focuses on repositioning assets rather than structured long-term technology planning.

The Tipping Point: Moving Beyond the Status Quo

While it is essential to have structured frameworks for planning, the first step toward meaningful change is motivation. Without a compelling reason to move beyond the status quo, even the best strategies will sit unused.

Technology adoption in CRE often stalls because decision-makers don’t see an immediate urgency. However, ignoring innovation today means assets risk falling behind, operational inefficiencies becoming entrenched, and cybersecurity vulnerabilities remaining unchecked.

So, what drives action? It may be competitive pressure, evolving tenant demands, regulatory shifts, or the realization that inaction has consequences. Even small efforts—such as assessing how technology could improve asset performance or thinking through future capabilities—can be the first steps toward long-term success.

Are you prepared for the changes ahead? Waiting too long can mean falling behind. Leaders who embrace this shift will future-proof their assets and careers alike. Taking the time to envision the role of technology in long-term asset success or identifying early opportunities to integrate innovation can build momentum toward meaningful progress.

Ultimately, it is up to owners, portfolio managers, and property managers to stretch beyond familiar ways of thinking. By taking an active role in shaping a technology strategy, they can position their assets, teams, and investments for resilience and success.

Frameworks and strategies are valuable, but they alone are not enough to drive real change. The key to advancing a CRE technology strategy is the motivation to act. Leaders must feel compelled enough—motivated by risk, opportunity, or competitive necessity—to break free from inertia.

For technology to become a core enabler of success, decision-makers must ask: What will happen if we don’t evolve? Without movement, CRE assets risk becoming inefficient, insecure, and uncompetitive. Small steps, such as brainstorming future capabilities or aligning technology with long-term asset goals, can spark progress.

Owners, portfolio managers, and property managers must stretch beyond their immediate comfort zones to drive meaningful transformation. By making strategic technology decisions today, they can ensure long-term resilience, protect asset value, and equip their teams with the tools to navigate an increasingly digital landscape.

Real-World Examples: Technology as a Strategic Asset

Forward-thinking CRE firms are already leveraging technology to position their assets and businesses for long-term success. Here are a few examples:

• Boston Properties (BXP) has strategically integrated technology to enhance tenant experiences and sustainability. A key example is their partnership with Attune to implement real-time indoor air quality (IAQ) monitoring across their portfolio. This initiative supports BXP’s healthy building strategy, ensuring optimal conditions for occupants and improving operational efficiency through real-time environmental data.

• Blackstone has strategically invested in data centers, recognizing the rising demand for digital infrastructure and artificial intelligence-driven services. In 2021, they acquired QTS Realty Trust for $10 billion, underscoring the growing importance of AI-ready real estate. More recently, in 2024, Blackstone expanded its digital infrastructure portfolio by acquiring AirTrunk, a major data center operator in the Asia-Pacific region, for approximately $16 billion. This move further solidifies Blackstone’s commitment to supporting AI and cloud computing growth.

• Stiles Corporation (Stiles), in partnership with Shorenstein Properties, leveraged Intelligent Buildings’ IntelliNet Managed Services to transform their 110 East project in Charlotte, NC, into a smart building showcase. By introducing advanced cybersecurity measures and optimizing network infrastructure, the project not only improved operational efficiency—saving $24,000 annually—but also earned the title of “Most Intelligent Office Building” at RealComm | IBCon 2024. Stiles’ success exemplifies how managed services can position assets as innovation leaders. The 110 East project will also serve as the venue for the upcoming Beyond Bricks event, further reinforcing its role as a hub for real estate innovation.

Introducing the Three Horizons Model

To navigate these challenges, the Three Horizons Model (Baghai, Coley & White) offers a structured approach:

• Horizon 1: Focus on optimizing current operations by enhancing existing technologies and processes.

• Horizon 2: Expand and evolve by integrating emerging technologies and scaling successful pilots.

• Horizon 3: Innovate for the future by investing in cutting-edge solutions and reimagining business models.

Executing Strategy with the Play to Win Framework

Within each horizon, the Play to Win framework (Lafley & Martin) provides a practical method for strategic decision-making:

1. Winning Aspiration: Define what success looks like.
2. Where to Play: Identify target markets, segments, or technologies.
3. How to Win: Determine how to differentiate from competitors.
4. Capabilities Needed: Assess the resources and expertise required.
5. Management Systems: Establish metrics to measure and sustain success.

Applying These Frameworks in Practice

Consider a CRE firm aiming to enhance its technology strategy:

• Horizon 1 Application: Implement a managed cybersecurity service to protect current assets.

• Horizon 2 Application: Pilot energy-efficient technologies in select properties, with plans to scale upon success.

• Horizon 3 Application: Invest in research and development for AI-driven building automation to future-proof assets.

By applying the Play to Win framework within each horizon, the firm can make informed decisions, allocate resources effectively, and build the necessary capabilities to achieve its strategic goals.

Conclusion

Overcoming the short-term trap requires a deliberate shift in mindset. By embracing the Three Horizons Model and the Play to Win framework, CRE leaders can move beyond immediate concerns, strategically plan for the future, and ensure their firms remain competitive in an increasingly technology-driven market.

About Us: Intelligent Buildings LLC

Intelligent Buildings is a team of CRE technology specialists, founded in 2004 with a mission to simplify the complex technology challenges within commercial real estate buildings. We focus on three core services: assessing your building technology to give you greater understanding and visibility of your capabilities, providing strategic advice to empower you to make smart decisions, and supporting your buildings connectivity with our 24/7 IntelliNet managed services. Our proactive approach to building technology empowers you to create an elite experience, deliver better performance outcomes, and increase your bottom line—so you can have power over your portfolio.

With expertise, experience, and specialized tools, Intelligent Buildings helps clients address the challenges and opportunities of implementing a robust technology strategy. Learn more at intelligentbuildings.com.

Realcomm’s Beyond Bricks 2025: Shaping the Future of Real Estate

Join us on February 13, 2025 at 110 East—recognized as the Most Intelligent Office Building in North America in 2024—for an exclusive educational session hosted by Realcomm. This event will bring together industry leaders to explore the intersection of transit-oriented development, PropTech, and the future of urban real estate. Discover how Charlotte’s evolving light rail system is reshaping tenant experience and influencing commercial real estate decisions. Delve into the role of PropTech in enhancing operational performance, sustainability, and tenant retention through cutting-edge technologies. From smart automation and connected building systems to innovative design, you’ll gain actionable insights on creating more intelligent, sustainable, and tenant-centric spaces. Don’t miss this opportunity to stay ahead in the rapidly evolving CRE landscape and understand the pivotal role that transit-oriented developments and technology will play in shaping the future of urban development.

For more information and registration, visit Beyond Bricks.