MIT Innovation Lab has identified over 1,600 real estate technology start-ups and most firms are less than 48 months old. Venture capital funding for CRE technology reached $1.8 billion in 2016. These firms are revolutionizing deal-making, providing cost savings, increasing productivity and speeding up decision making by all stakeholders.
What is driving this explosion of commercial real estate technology? The larger digital revolution itself, happening all around us, has hit the CRE industry in very significant ways. According to experts, one primary driver is Moore’s Law. Moore’s Law states, the number of transistors in an integrated circuit, doubles every 18 to 24 months. This ever-increasing amount of computing power is not only changing the business landscape but our entire world. The speed of the growth of our digital universe was well illustrated in IBM’s 10 Key Marketing Trends for 2017, revealing that 90% of all data in the world is less than 2 years old. This rate of advancement has not been seen before.
A CLOSER LOOK
The residential sector has outpaced the commercial sector when it comes to new technology, but the commercial side has many elegant new platforms. The concentration of new companies is not limited to the United States. Investors have bet big on global technology solutions with prime markets around the world. South America, Asia, and Europe have seen new digital platforms to make searching, managing and investing in real estate, transparent and close to instantaneous.
Where CRE technology is headed is hard to tell however there are trends that are sure to launch new technology. The 2 most intriguing factors are big data and the internet of things (IoT) but there are others. Driverless cars, affordable housing for an aging population, the shift in the retail industry, and many other factors promise even more changes to CRE technology.
The days of the CRE generalist are numbered as tech-centered Millennials see opportunities and investment capital is infused into real estate technology. Niche CRE experts will grow in number creating more opportunity but leaving non-tech professionals behind. We have already seen exponential growth in many new CRE technology platforms with no end in sight. Mergers of technology companies and acquisitions of tech companies by national and international CRE players, take place on a regular basis now.
Seasoned CRE professionals stay up to date with technology sources such as Michael Beckerman, Linda Day Harrison, and the ever salty Duke Long(CRE’s bad boy). The cost of not staying up to date is just too high in this rapidly changing landscape.
I’d be interested in who you are watching when it comes to changing CRE technology, please leave a comment on who you are watching and follow me at JanitorJack.
The following provides an overview of some of the most heralded new platforms.