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This should come as no surprise to anyone at this point, but the proliferation of property technology companies coming online—upward of $12 billion annually—can make a building manager’s head spin. IREM President Don Wilkerson, CPM, in his latest column for NREI channels homespun, pop-culture philosopher Dorothy Gale (from The Wizard of Oz, in case you forgot),who put it most succinctly: “I’ve a feeling we’re not in Kansas anymore.”
“And frankly, we’re not,” Wilkerson writes. “We stand on the threshold of a major redefinition of how we work based in large part on the proptech applications flooding the market. But how does any firm separate the wheat from the chaff? Who do you trust? What applications will withstand the inevitable shakeout? And, arguably most important, what applications work best for your operation, your culture and your mission as a provider of service?”
Great questions all, but Wilkerson doesn’t leave you hanging. Neither will IREM, and he enumerates recent developments in the tracking of proptech that IREM has mounted to help keep membership digitally savvy:
“IREM is tackling these questions head on, emphasizing the education that goes into a wise evaluation of technology in order to help the membership make informed and impactful decisions,” he says. “Over the past few years we have been ramping up our tech research and advocacy through such initiatives as our recently created Technology Advisory Board and the standing-room-only, IREM-sponsored Property Management and Technology Forum that preceded this year’s Realcomm. This effort clicked into high gear earlier this year when James Scott came aboard as IREM’s Innovator in Residence.”
Wait. What?
As the column explains, Scott is a lead researcher at MIT’s Real Estate Innovation Lab, coming to IREM, in his words, “to help membership get a better understanding of all the new technologies out there and all of the changes taking place within the industry. It’s my job to navigate the members through this period of massive, rapid technological change.”
As Scott explains, proptech is exploding. That $12 billion in annual venture capital has exploded the industry from a field of roughly 50 or 60 players four years ago to more than 3000 currently in the MIT database. Keeping up with that torrent of change itself is a massive undertaking.
Of course, selecting the vendor to provide such forward-thinking applications is like placing your bet on a dark horse—unless you know the vendor’s track record. Coupled with that is the selection of a compatible, scalable system.
“No matter the size of your portfolio, there are so many new companies with their own systems, but not one, cohesive, strong infrastructure that can tie all aspects of operations together,” he says. “So a company’s accounting system is with one provider, the maintenance system with another and the outsourcing system with yet another. There is no Microsoft equivalent for proptech.”
That, he believes, is destined to change. “There won’t be 3000 companies in a few years,” he says. “The bigger players will take control of the companies that add value to their own platforms. And once we have those two or three strong market leaders, you’ll see a lot more people come on board.”
But a trusted, proven vendor isn’t the only needful thing here. For any comprehensive proptech application to work, “You need a really strong alignment from the people at the top,” Scott says, explaining that such pervasive operational changes as these systems can provide also demand a cultural shift. Everyone down the line has to have buy-in, or even the most comprehensive application will fail.
Property managers have heard all the hype, Scott tells Wilkerson, and “Most savvy property management decision-makers will wait until they see an application that brings true added-value to their operation and their culture. Then they’ll get on board. As a rule, a more cautious approach is wisest.”
“That cautious approach includes watching, learning and waiting to see who’s left standing when the inevitable tech shakeout occurs,” Wilkerson writes. “IREM membership will be addressing the watching and learning part. That will be powered by our Tech Advisory Committee and the ongoing guidance by MIT’s James Scott.”
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About the Author
John Salustri is editor-in-chief of Salustri Content Solutions, Inc., a consultancy focused on enhancing the web and print content of clients around the nation. He is a regular contributor to JPM Magazine and a frequent blogger for IREM. Prior to launching SCS, John was founding editor of GlobeSt.com.