When Oxford Properties Group makes a call on a PropTech investment, the firm applies what company President Michael Turner describes as “two smell tests.”

“It has to have strategic value to Oxford or we think it’s transformative for the industry,” Turner said. “And it has to have an attractive direct financial return.”

Speaking at Convene and Honest Buildings' "Catalyst: How owners can progress the urban landscape" conference Friday, Turner said Oxford, which owns a stake in the Hudson Yards megaproject, has a “PropTech bucket," but so far has made only three small investments.

“We are not going to press the button just because we have capital, we have to be convinced there’s an opportunity,” he said.

Spending money on technology, making the best use of data, creating efficient buildings and keeping in step with industry disrupters like WeWork and Airbnb are major issues for even the most deep-pocketed real estate companies around the world.

Certainly, some investors are willing to throw money at firms that could offer a smarter — or cheaper — way of getting the job done. In total, venture capital firms invested $12.6B into real estate tech companies last year, tripling the $4.2B invested in those kind of platforms in 2016.

But just like Oxford’s Turner, some preach caution.

“Some of these things are nice to have and are glitzy or glamorous, but they’re not going to address a problem, make our buildings more efficient or drive revenue,” Silverstein Properties Chief Information Officer Sandy Jacklow said. “It’s got to solve a pain point to the business, it’s just that simple.”

For Brookfield Property Partners Chairman Ric Clark, the way that technology is changing the real estate industry is coming in waves. First was the “digitization” of the industry, which produced offerings like Zillow and CoStar.

Next came industry “disrupters” like Airbnb and WeWork. The coming phase, according to Clark, will be focused on improving experiences and improving productivity in buildings.

“Tenants have seemed to shift from focusing on cutting costs and being cost efficient to attracting, retaining and motivating their employees,” Clark said, adding that Brookfield has a “little” venture capital fund to invest in companies if they prove worthwhile. “Tenants are partnering with landlords so they can solve their people goals.”

Clark pointed to Brookfield’s investment in workspace startup Convene — which just signed a lease for its largest space ever, 93K SF at a Manhattan Financial District tower Brookfield co-owns — as example of partnership that is reshaping Brookfield’s office portfolio.

Last year, Brookfield made a $200M investment in Niido, a developer building multifamily apartments that will be leased through Airbnb.

Brookfield would also consider buying or partnering with a coworking company, Clark said, rather than start its own. Last year, Brookfield and Onex made a play for flexible workplace company IWG, previously known as Regus.

“We are better off teaming up with others in the industry, finding the right operators and maybe doing management deals with them,” he said. “We are more likely to do that than build from scratch.”

Turner agreed that, when it comes to technology and new products, teaming up with another company is the way to go.

“Historically, we did things out of necessity,” he said. “I think today, partnership and investing is way more efficient use than [building] it on our own. That could be an enormous distraction, and we end up with something that is not world class.”

Aside from technology, company executives said finding ways to gather data and make use of it has become a significant factor to consider.

Turner said that in Oxford’s shopping center portfolio, the company is starting to use data to understand customer preferences, which can impact advertising they use. Additionally, they are using a platform that has real-time information that can tell them where cleaning or security staff can best deploy their resources.

"We are doing two cloud-based pilots now, they are expensive,” he said “We are learning and we are doing it incrementally. It’s not clear what’s the return on investment.”

But, as with PropTech investments, many said it is important have a specific vision.

“It’s really important to start with the question of ‘What am I trying solve and what is the ROI associated with it?’” QuadReal Property Group Head of Special Situations Jameson Weber said. “If you can’t have really good answers to those things, it’s a fool’s errand and a complete waste of time.”