Over the past few years, there has been a drastic increase of CRE tech adoption in the industry and continued investment into Proptech companies. In Q1 of 2019, funding for the first quarter 2019 reached nearly $6billion with the half year total now close to $9billion according to PropTech funding 2019 data by Unissu.
Where can we expect the CRE industry to go from here?
We asked some of the top commercial real estate thought leaders about which CRE tech and marketing trends they are most excited about for 2020:
“While I’m not sure it will hit big in 2020, one trend that is definitely coming to commercial real estate is Augmented Reality. We are already starting to see this in proptech in the facilities maintenance realm. But, as more of our world gets digitized we will one day be able to view a building or property through our smartphones or tablets and have relevant data overlay the buildings in real time.”
Diane K. Danielson, Chief Operating Officer, SVN International Corp.
“In 2020 we will see a lot of of M&A in proptech. Raising money will be harder to achieve since we are in a much more mature state of the market for those products. It’s an important year to show real revenue potential.”
Jonathan Schultz, Founder and Managing Principal, Onyx Equities
“I think 2020 will finally see the tenants demanding that landlords provide a certain tech stack in both residential and commercial buildings. Forward thinking landlords will leave their competitors in the dust as they offer efficiencies, services and amenities old-school landlords hesitate to adopt.”
Jeremy Neuer, Executive Vice President, CBRE Institutional Properties
“Connectivity and mobility continue to be key tech trends in CRE. We have seen it first-hand in our new office space at McCall & Almy with our workers having the flexibility to pick up and work anywhere in the office or even our building lobby to have impromptu meetings with clients or collaborating with colleagues. With everyone interacting on our smartphones, I am excited to see tenant experience apps continue to gain popularity enabling us to be more efficient with our time by signing up for gym classes, ordering lunch and even the ever-popular office complaint of changing temperature controls.”
Linda M. McDonough, Vice President, Marketing, McCall & Almy
“One of the most important trends in the CRETech marketing space is that startups are really emerging as powerful brands in the CRE industry at large. These brands have built a clear identity, value prop and product differentiation after years of investing in their marketing and culture. This is a wonderful reflection of the growth and maturity of the sector overall that we have arrived at a point where companies are known in the commercial real estate industry at large. Tipping point? Not yet. But a powerful statement. Hell yes!”
Michael Beckerman, CEO CREtech, The News Funnel, Atypical
“I see a maturity in the industry that I have never seen before. This is evident in the bigger and bigger VC checks that are being written, the M&A activity and the general spirit of cooperation. No longer does it feel like a lot of startups all competing for attention. Now successful companies are looking for ways to work with others to grow their platforms even bigger. The property industry is waiting for winners to emerge and now I think we are seeing some. I predict we will start to see some wide-scale global adoption soon.”
Julia Arlt, Global Digital Real Estate Leader, PwC
The incremental technological improvement to a multi-trillion dollar asset class like commercial real estate will always happen in some form or another, but where is the true opportunity to dominate?
The tenants who occupy space will drive the next wave of innovation in commercial real estate. And the opportunity is in the ability to empower the tenant and the user of commercial real estate.
Duke Long, Founder, Duke Long Agency
“The marketing of property has always required a huge amount of work for brokers (some brokers I know have a full time graphic designer just to put together their offering memorandums) and given them very little feedback in return. The automated systems that are being developed will help many brokers in creating great marketing material and the digital distribution channels are allowing them to do proper A/B testing on their messaging. Hopefully, this will lead to a lot better-looking marketing material, we have all seen our share of terrible advertising enough to know that there is plenty of room for improvement.”
Franco Faraudo, Co-Founder, Propmodo
“A few years back I discussed, on this website, a CreTech juggernaut that was hitting the real estate industry. There are now well over 7000 businesses involved in PropTech globally and over 50% are involved in the commercial sector. Whilst I expect this to decrease in time (though a combination of M&A activity as well as a consolidation through other means such as businesses failing) it still means there is a raft of exciting opportunities out there as this juggernaut continues to have an impact.
Looking at the market view today however, tenant engagement seems a really high priority for landlords and occupiers. It is easily understood, there are legal ramifications for not understanding your tenants and, ultimately where they are, and solutions are plentiful therefore making it an on trend topic. Looking further to the future, artificial intelligence (AI) solutions will come into force, and indeed are already starting to. From digitising leases to understand the physical make up of our buildings for rooftop possibilities for anything from extra development potential to drone landings, AI will have an impact on almost every area of the CRE market. Whilst AI solutions currently make up less than 5% of PropTech tools on the market, I am sure this will grow in the near future and will have a fundamental impact to our daily lives.”
James Dearsley, Co-Founder, Unissu
Which CRE tech and marketing trends are you most excited about in 2020? Share your comments below.