How Technology Is Changing Real Estate
While most of the talk in leasing is the growth of tech tenants in the market, it's technology that's changing the industry as a whole. That was the consensus of speakers at Bisnow's Future of Real Estate: Design, Innovation & Tech this week. And instead of discussion panels, experts gave brief talks on their world view. Here's what they had to say.
VTS co-founder and CEO Nick Romito says the industry today is like Wall Street before the advent of electronic trading: People handing each other slips of paper, piecing together manual reports containing info that's already old by the time it gets into the report. The influx of billions of dollars into Wall Street created the need for transparency and better info, and the explosion of capital into commercial RE is creating the same need today. No one in VC has ever seen a marketplace shift this fast, he says, where so many of the largest institutional players have decided at the same time to use tech. Case in point: 1.3B SF of commercial assets that were on paper 18 months ago are now in the VTS platform—with an additional 600M SF joining them.
Realty Mogul CEO Jilliene Helman talked about the future of finance and the impact that Millennials' love for tech will have on real estate. If you had asked people 10 years ago if they'd consider putting all their financial data online to get a loan in a matter of minutes, it would have been absurd, but she says it's happening today in consumer credit and in real estate. Realty Mogul uses tech and big data to move quickly, pulling in 300 data points from a single address. "We're providing credit for real estate and pricing it with risk and reward in 10 seconds." She says the folks who grew up with Facebook, Uber and AmazonFresh would rather use Google Wallet than BofA as their bank.
Tangram president Joe Lozowski (snapped here with Turelk's Marcos Ramirez and Tangram's Paul Randall Smith) says employee engagement is the key. Joe, who heads SoCal's largest contract furniture and flooring dealership, says that at a time when people can work anywhere with their mobile devices, office space must become a destination where people want to go to work—it has the tools, tech and meeting places that make it easier to work together and focus on human interaction. Rather than large formal conference rooms, what's needed are small, informal spaces, often without walls, where people can collaborate eye-to-eye.
DPR Construction sustainability leader Whitney Dorn (snapped with Nelson Rising), talked about how net-zero-energy can be a solution for the huge volume of B and C space that's becoming obsolete. One of the barriers to having a truly sustainable space, she says, is the upfront planning that's needed, and it's easy to have sticker shock. However, you'll end up with a better project that will attract a tenant who's looking for a space that inspires them, and less cost on the back end. Especially in California, where energy costs are going up and the way we're being charged for energy is changing, there's a definite hard return on investment.
San Francisco-based investor Brian Veit (flanked by TSA Contracting's Parker McMullin and Terry Arnett) notes that ideas without a problem are the province of late-night TV (think Chia Pets and ShamWow). Parking, on the other hand, is a real problem for developers as well as land planners and designers. It's a benefit if you can save half of your excavation costs, regain FAR, maybe even get rid of human labor, he says. Boomerang Parking Services, a company Brian invests in, is solving some of these problems at a condo tower in Miami. In addition to managing 480 parking spaces, the automated robotic parking system has found other problems to solve, such as trash hauling and storage—the latter in a pod that can be called up whenever the resident wants.
Our event was held in the Blue Whale at the Pacific Design Center, where the not-so-new RedBuilding recently announced its first four leases. Before our program, we sat down with LA Realty Partners principal Gary Weiss (right, snapped with CBRE's Eric Hasserjian), who, with his partner, handled leasing at the RedBuilding before it was taken in-house. Gary expects the new leases to pave the way for other tenants to consider coming here, although WeHo's a pioneering location that historically hasn't had a lot of office tenants.
None of our events could be so glorious if it wasn't for our sponsors, which include Premier Cabling Solutions, a provider of telecom services. Before the program, we snapped the company's John Paul and Manuel Cano.