The Beginner’s Guide To CRE Tech: Why Commercial Brokerages Are Aggressively Launching New Tech Services
Technology plays a huge role in powering the $2 trillion machine that is commercial real estate, and major commercial brokerages are scrambling for a piece of that pie.
Brokerages such as CBRE, Colliers International, Cushman & Wakefield, JLL and Newmark Group have been heating up their tech infrastructure and investment as of late.
“I think it’s probably the biggest underlying trend that we’re seeing in the marketplace,” CRETech.com CEO Michael Beckerman said. “The brokerage firms, in particular the big five I would say, have all now aligned themselves with either a VC accelerator [or] hired their own in-house tech talent. Brokerage firms are waking up to the opportunities that CRE tech offers them.”
Leaders in the space are expanding their services to include tech advisory components for clients — like Newmark Knight Frank’s new Global Knowledge and Innovation Center in New York — and tech accelerator programs.
Some are even taking it a step further by launching their own solutions to help clients oversee assets and manage tenants.
Take CBRE. This year the brokerage, which has more than 80,000 employees worldwide and pulled in $14.2B in revenue last year, launched a workplace experiences platform called CBRE 360.
Headed by Andrew Kupiec, a former Zipcar executive who oversaw the company’s North American operations, the platform is a mobile app tailored for clients that allows employees to access building services and amenities, such as booking conference rooms, managing meetings and sending out maintenance requests, via phone. Employees working within huge multi-building campuses can download the app to broadcast their position to their colleagues and help navigate the campus.
“Our app is meant to overlay all the existing services that happen in the building,” said Kupiec, CBRE 360 global president. “End users would download the app, be given secure credentials … and would be able to upload experiences brought to you by the company.”
JLL is another brokerage getting out in front of the industry’s tech boom. The firm introduced JLL Spark, a global business that will identify PropTech solutions and deliver them to clients, in 2017. Headed by co-CEOs Mihir Shah and Yishai Lerner, the goal of the initiative is to create new products and invest in CRE tech startups that will transform clients' businesses.
“Just as technology is transforming many traditional industries across the business world, such as transportation, the time is right to make change happen for real estate,” Shah said in a statement.
Accelerating The Tech Boon
Colliers International announced a partnership just last month with Boulder, Colorado-based Techstars to launch Colliers Proptech Accelerators powered by Techstars. The move follows Cushman & Wakefield’s partnership with real estate startup accelerator MetaProp NYC, announced in July.
These accelerators, also known as seed accelerators, are mentorship programs that provide educational elements for tech startups for a fixed period of time.
Colliers Proptech Accelerator will be an intensive 13-week program hosted at Colliers’ global headquarters in Toronto. Select startups for the program will focus on the development and acceleration of technology-driven solutions.
"If you are a startup in CRE tech, the fact that the brokerage firms are being very aggressive in investing and adopting new technology is really the best thing that could possibly happen,” Beckerman said. “It means that finally, after five to six years in this CRE-tech-startup world, they finally have a captive audience to pitch and present to.”
As commercial real estate tech continues to advance and new solutions hit the market that make the act of trading and managing commercial properties more efficient, the trend of brokerages investing in property tech will continue.
Beckerman said these advances in tech will not eliminate the need for brokerages or upend agents’ jobs like traditionalists fear. Rather, it will streamline the work, Beckerman wrote in a blog post about the trend, creating a more paperless, transparent approach to sourcing deals and closing transactions.
“Brokerage firms will not be replaced by technology,” he said. “The nature of commercial is such that it’s far too complex and virtually every transaction is unique so that it’s really challenging to come up with the perfect [artificial intelligence] that will replicate every part of the business without people.”