All The Hardware In The World Will Mean Nothing If There Is No Data To Input
Compared to a few years ago, commercial real estate is nearly in an Age of Enlightenment when it comes to embracing tech. But all the drones, 4K virtual reality tours and smartphone apps will be for nothing until the industry begins sharing data with each other for the greater good, according to the "Future of CRE Tech" panel at Bisnow's Disrupt Chicago event on Tuesday.
Moderne Ventures vice president Kurt Ramirez said what is really keeping commercial real estate from fully embracing the tech revolution is an insistence on keeping data proprietary. Compared to the residential side of the industry, there is no incentive for data sharing in CRE. There is no commercial equivalent to MLS and data in CRE is superfragmented and siloed.
With that foundation, the capital being deployed to creating tech solutions are only being used to help, say, a broker make his or her job better, instead of adopting an industrywide stance to making data sharing easier for everyone. Ramirez believes there will be more acceptance toward sharing data, and platforms like CompStak are already incentivizing brokers to share data with each other. But it will not happen overnight; Ramirez believes this greater acceptance will happen in the next five to 10 years.
Prota Ventures managing director Will Little also believes the first step firms need to take is to release proprietary data. As the silos are broken, it will lead to more rapid activity in the market, which will attract dollars to allow innovation that can positively affect the business side of things and relationships between the players in the industry.
The work is already happening here in the Chicago market. Little said the Cook County government is one of the first counties in the world evaluating the software platform Blockchain to create a public database of property titles. The ability to have a distributed ledger will massively disrupt the industry, because it will knock all of the intermediary players out of the game. Chicago is also the HQ for the International Blockchain Real Estate Association, which is dedicated to implementing bitcoin and other blockchain technology into real estate. If successful, this would create an open source platform for crowdfunding real estate deals, buying assets, expediting transactions and making real estate a liquid asset.
Loft Development vice president Christopher Deutsch's background is in e-commerce and tech startups, and when he returned to work for his family business four years ago he was stunned that tools like CoStar were considered at the vanguard of industry tech.
Deutsch believes there is a chicken-and-egg scenario in CRE. The embrace of tech in the industry is still in its early stages. Building an ecosystem that will create tech platforms dedicated to the industry sets the foundation for entrepreneurs to build product and have the support of the community.
Pritzker Group vice president Sonya Nagar said her firm's investment in Hightower positions the firm to capture data and take some market share from CoStar in becoming an industry platform. Nagar also believes collaboration tools like cloud services will be more vital as data leaves the silos and reaches centralized platforms. These tools enable people to do more creative things with that data, as well as make it available for people creating the next disruptive tech.
Nagar is keeping an eye on other tech advancements like artificial intelligence and virtual/augmented reality, which can take over more menial tasks from workers and enable efficiencies in the industry.
CORRECTION, MAY 1, 8:58 A.M. CT: A line was deleted from Christopher Deutsch's comments to more accurately reflect his comments at the event.