Last week I attended SIOR’s Fall Convention in Chicago. There were several sessions on CRE tech – and I went to all of them! Here’s my highlight reel from these excellent presentations (nice job, SIOR and panelists!).
According to Steve Weikal of MIT’s Center for Real Estate, what’s driving the technology boom in CRE is the realization that CRE is a big market ($) and a rush to service institutional investors who have become increasingly involved in CRE. Over the past decade, the share of real estate in these portfolios has risen from 1.5% to over 10%. As such, there’s a need for tools to analyze performance, ensure efficiency and meet all the regulatory and reporting requirements. And you thought it was Millennials pushing CRE to be more tech savvy…
Speaking of Steve Weikal, the MIT Center is currently studying commercial real estate start-ups. Besides identifying drivers, they’re trying to organize them by function. Not included are property/portfolio management, crowdfunding and residential/multifamily/B2C apps. So far the schema looks like this (with some examples included!):
- Data Visualizers – Create, Synthicity, Pinpoint
- Find and List – RealMassive, New Dirt, PropertyFuse, Opportunity Space
- Analyze – Reonomy, TennatRex, WiredScore, REMeter
- Manage Processes and Data – Hightower
- Space Management – Robin, MotionLoft
- Space Sharing – WeWork, Liquid Space, Pivot Desk, StoreFront
- Virtual/Augmented Reality – Floored, ReaLync, Oculus, Cube Cities
In an unusual show of enthusiasm (or maybe relief) there was a big round of applause for Hightower CEO Brandon Weber’s remark that the purpose behind new CRE tech is not disintermediation and that agents are here to stay.
In fact, there seemed to be a concerted effort not to scare agents. Phrases like “impact not disrupt”, “tools that empower” and “apps need to be easier, more productive and fun” were generously sprinkled throughout the presentations.
However, the word disruption was thrown around quite a bit but mainly in the context of usurping an existing player’s market dominance. As in “we’re going to disrupt LoopNet.” But that’s not disruption. That’s called competition.
During the Q&A, the most asked was some variation of “what do I choose?” There’s a real concern that most of these start-ups won’t be around and no one wants to put money on a loser. The advice was to look at VC/Angel backing (like they’ve never been wrong…). I say ask for the client list, their income statement and what their end game is (including how they intend to protect their software orphans).
Another popular question involved integration and overall despair with having too many single purpose apps. APIs were mentioned (which means little to nothing to agents…and most brokerages) as was “we’re looking at expanding/adding more features.” Not encouraging.
Lots of grumbling from agents in smaller markets who wondered when all this “major market stuff” was going to make it down to them. In other words, all this is nice but it’s useless to me right now.
In what was perhaps an unguarded moment, Weikal wondered if some of these new apps were solutions for problems that don’t exist. The crowd smirked.
During the last day session Q&A, a client in attendance commented that she had no idea that all this “stuff” was out there and gave kudos to the agents who, while trying to make a living, have the time to learn about it all in service of people like her. I suspect that made the crowd of agents feel good not only knowing that clients were impressed with CRE tech but that they’re, so far, unaware. Gives everyone more time.