The Complexities of Technology Sourcing for Real Estate

How do you access this ecosystem, where do you start, and how to de-risk, and increase the likelihood of successful technology onboarding while capturing the benefits of technology across your estate?

At The Proptech Connection, we sit in the middle of the Proptech ecosystem, and our role is to act as the bridge between all participants. We are the leading global, independent advisory that helps institutional real estate companies and their investment arms understand and shape how technology can improve or defend their assets.

With offices across 5 different continents (we just opened an office in Riyadh), we have a unique lens into macro trends, how trends are impacting portfolios, how companies are pivoting to meet these new trends, the technology offerings that are aiming to help with these changes, and the leading tech companies meeting each of these needs.

We have developed our own in-house taxonomy and data dictionaries to distil our global database and the world of Proptech. We built our own digital technology with our own data mapping of the entire proptech ecosystem, giving over 10 million data points. This gives us a unique view of global market trends and the future.

My colleagues and I are extensive venture capital and real estate specialists. We have also invested in and worked with dozens of young companies, “proptechs”. This allows us to work with major players on their digital strategies and provide insight into how some of the real estate problems are being tackled globally.

In this article, we will explore a couple of the areas we have identified that make the sector so unique.

Why?

About five years ago, we looked at the market and saw this explosion of Proptech (vendors). For us, this image is a great overview of the challenge and complexity of deploying technology in real estate.

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There was not a data-driven, global, intelligence platform matching the needs of investors and real estate companies and filtering through the almost 20,000 tech's in the market. Many investors and real estate companies have spent significant amounts of cash, with often poor results.

We also noted a number of key points:

i) Mapping the benefits of technology to real estate was poorly achieved.

ii) A highly fragmented market meant poor adoption.

iii) The models on offer for those seeking a digital strategy were poor.

The reasons why this didn’t work:

iv) The benefit of technology is on a very specific level (same use case, different needs)

v) There are key pieces of real estate organization that need to be in place to make it work.

So, we at The Proptech Connection looked at the key drivers of real estate and then assessed all 18,000+ proptech start-ups through this lens. We identified all the different use cases and technology types.

Post-COVID and in the current high interest rate environment, we are in a transformational time in real estate, which is fundamentally changing. Real estate and construction, after hunting and fishing, are the least digitized industries.

So let’s look at some of the macro trends that we are looking at at the moment.

1. Duration mismatch

2. The evolution of usage

3. Automated + connected portfolios

4. The ESG and Asset use hierarchy

We are seeing many approaches in the market, utilizing tech, in making decisions around capital allocation, cap-transaction decisions, and asset management to reshape decision-making.

What is clear is there is no one size that fits all to how this is being approached.

We at The Proptech Connection know the complexity of sourcing the right technology for your business. With the largest global proptech network of decision-makers leveraging our intelligence platform we support our clients.

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