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Digital twins. Blockchain. Modular construction. Augmented reality. Even self-diagnosing, self-healing, and self-building buildings. How is that possible?
Well, it is. Real estate technology is evolving from wi-fi and automated lighting to buildings that offer a secure, problem-free environment, driven by technology. Investors are listening, and investing in businesses that develop technology to improve the tenant and resident experience, increase building efficiencies, and enhance the property’s financial performance.
In 2013, CBInsights reported that $519 million of capital was poured into property technology, or proptech. One year later, that number rose to $1.23 billion. And, in 2018, Unissu reported global investment of $14.85 billion. The trend is clear - proptech investing is growing fast.
And the number of proptech companies is growing just as fast. Today, there are more than 3,000 companies developing proptech solutions. James Scott, of MIT’s Real Estate Innovation Lab and IREM’s Innovator-in-Residence, helps real estate managers identify innovations that can help operate their buildings more efficiently, improve their properties’ competitive positioning, and better serve tenants and clients. GlobeSt spoke with Scott about the growth explosion in proptech. “There’s a lot of uncertainty in the marketplace,” he says, “and I see my job as helping real estate managers and building owners navigate through all the new technologies and products.”
There are questions around integration, applying building technologies that work together, and fitting old structures with new, interconnected systems. “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,” says Scott. “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.”
Real estate managers everywhere are wrangling with these challenges, which is also Scott’s focus at the 2019 IREM Global Summit. No longer on the horizon, proptech is changing the built environment. With a solid understanding of available technical solutions, real estate managers and owners can choose, integrate, and implement those that create real efficiencies, and provide insight that translates into value.