The pandemic has rendered most pre-existing smart city concepts obsolete, leaving cities and regions scrambling to adapt to the profound changes of the last few years. Initially, the goal was to lure people back to work and live downtown—a vision that the pandemic has dramatically altered.

Many conferences still promote outdated ideas like Smart Cities 2.0, rehashing concepts that no longer align with the rapidly shifting realities of today’s market. City leaders must recognize these differences to avoid pursuing outmoded priorities and ineffective solutions that fail to add value.

The workforce is no longer a homogenous group of daily commuters. It has split into two distinct segments: those who work from home and those who commute daily or on a hybrid basis. This permanent division remains unacknowledged by many in government and business, who cling to the notion that cities and business zones will revert to “business as usual,” with everyone returning to their commutes.

New investments in intelligent amenities are essential to attract companies still seeking quality office space. The legacy infrastructure of both power and broadband connectivity is outdated, leaving many buildings ill-equipped to meet the demands of today’s global marketplace.

In several industries, companies have kept some employees working from home, finding that productivity has improved without the overhead costs of leased commercial space. Workers, too, have recognized that the urgency to return to the office has diminished.

The anticipated impacts of the pandemic have materialized: waves of higher vacancy rates, plummeting building values, and distressed regional banks have eroded profitability and marketability to the point of crisis in many major metropolitan areas.

Most real estate and property management firms failed to act on upgrading buildings. Their traditional reluctance to embrace change—“Great idea, you go first”—has proven to be a flawed strategy.

It is now time to reassess priorities in updating buildings and encouraging a return to the workplace. Systems and specialized sensors with multi-year paybacks will not be as appealing or prioritized as solutions that can immediately increase occupancy rates and enhance a building’s viability in the new marketplace.

Buildings must provide more redundant services to support mission-critical applications. If your building still relies on the same power and network infrastructure as it did decades ago, it may be time to move to a more modern facility that has eliminated single points of failure.

The significance of these observations over the last three years is clear: the current tools and analytical models used in real estate to assess and manage commercial office space are, at best, outdated and, at worst, completely obsolete. Traditional “experts” are using models that fail to consider the right variables or incorporate them into their formulas, missing crucial trends.

Appraisals, too, are outdated, failing to account for new intelligent amenities and their impact on the marketability and viability of entire downtown areas. While identifying trends from a historical perspective has value, a forward-looking approach—one that anticipates the convergence of disparate variables and identifies paradigm shifts as they occur—is far more critical. Unfortunately, most traditional real estate management firms remain stuck in the past, missing the paradigm shift by several years.

New assessments are crucial to understanding whether a building should be upgraded or abandoned because it is too far gone. Sadly, many fall into the latter category. Repurposing is not always the answer.

Smart Cities 2.0 should evolve into comprehensive “smart regional” principles, extending connectivity and redundant power across entire regions rather than focusing solely on downtown areas or business campuses. Additionally, discussions of air taxis, drones, and secondary infrastructure to support these emerging technologies must consider how they integrate with and enhance existing infrastructure within the broader regional commerce platform.

Perhaps it’s time to rebrand Smart Cities 2.0 as Smart Cities 3.0—or better yet, Smart Regions—as more applications become realities, eclipsing the outdated, city-centric concepts that were never fully adopted and are now unquestionably obsolete.

Some of my contacts report that investments in technology and infrastructure upgrades are still sluggish. My advice is to act now. Those who do will find themselves ahead of slower competitors, who will be left selling obsolete buildings at rock-bottom prices. Remember, junk remains junk—even at a discount.