Depending on what you’re reading, property technology – proptech – got its start as far back as the 1980s. But it actually wasn’t until the early 2000s, when the so-called “first generation” of proptech companies came online. But the commercial real estate industry had been slow to incorporate technology into various operations. Then came COVID-19 and the ensuing quarantine, social distancing and lockdowns. This accelerated the use of industry technology.
Experts told Connect CRE that the pandemic helped light a technology fire under many in the industry. “COVID-19 posed challenging conditions for the entire real estate industry, an industry that relied heavily on a physical presence,” said Steve Rad with Property Inspect. “When the pandemic hit, the industry was quickly forced to adapt.”
Archer.re’s Thomas Foley added that the sudden, almost overnight switch to remote work demanded technological solutions. “This led to every CRE owner feeling the pressure to look to tech to help them innovate their way out of the predicament,” he commented.
And according to Aaron Rudenstine of ButterflyMX, the pandemic shone a light on industry processes, and found them wanting. “For example, in the earliest days of the COVID lockdowns, what were the chances that a resident who locked themselves out of their apartment could rely on a property manager being onsite to lend them a spare key?” he said. “And what about the surge in deliveries to buildings due to online ordering — who at the building was responsible for handling all of those packages?”
The experts said that in many ways, COVID led to an “ah-ha” moment, one that supported different uses for technology to increase revenues, decrease costs and boost efficiencies. Rad said that, for example, Property Inspect’s technology helps with efficient operations, providing inspection apps for offline data capture, interactive reports that track and leave audit trails and digital signature to speed property inspections and operations.
Rudenstine also noted that proptech is taking on routine, time-consuming tasks once handled by property managers.
“For example, switching a building from keys, fobs, and key cards to a mobile app-based access system makes onsite access management a thing of the past,” he said. “With a mobile system, revoking property access for a new or departing tenant is now a seamless, automated process, rather than one that requires dedicated tools and time to hand out keys or rekey an apartment door.”
But Foley isn’t all that impressed with what’s been going on so far. “CRE has mostly used proptech from a surface level,” he said. “For instance, ‘let’s create a CRM clone for managing a deal, let’s aggregate public data and make it searchable or let’s create a marketplace for single-family rentals.’” None of the solutions, he noted, has had much of an impact on how business is getting done. Additionally, “unlike the construction space with real winners like Procore and healthcare space with Veeva Systems, there is no dominant platform for real estate investors, lenders and brokers to use on a daily basis,” Foley said.
Rad also outlined the need for less platform divergence. “We’re seeing the continued need for end-to-end solutions that work for a multiple real estate industries and tasks to truly simplify lives,” he said, adding that the focus should be on integrated products that work for a variety of purposes. “We’re seeing increased interest from construction companies and commercial building owner/operators who are trying to manage assets more efficiently with fewer resources, as well as staying in control of operating costs” Rad said.
Rudenstine, for one, thinks proptech platform and company consolidations will happen, over time. He also acknowledged that at present, the industry has barely scratched the proptech surface, especially when it comes to hardware. But he said he was confident that as the industry works on streamlining processes and continued optimization, “proptech will evolve to meet those needs.”
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