The Future of the CRE User

Many people do not know that “PropTech” moniker, while coined in the 2010 decade, has been around since the 1980’s. New products and early adopters began with the dawn of computers and the emergence of the internet. Companies like RealPage, Argus, and Yardi recognized the massive opportunity in a growing industry: commercial real estate. These companies, along with others, built products targeting not just office, industrial, and retail buildings, but also the multi-family and hospitality sectors. And yet, PropTech continues to reinvent itself decade over decade. As it occurs with the technology cycle, new advancements mean some companies, and their products, stagnate while others innovate; much of this is not just driven by the market but rather by the end user.

For commercial real estate, PropTech is often referred to as “just another tech product” that may or may not add value for the owner of the space. Products, tools and platforms are viewed as a “nice to have” but not essential operationally. It is this intersection that the next evolution of PropTech begins.

PropTech should be designed with the end user in mind. Simple, repetitive data capture is paramount to an industry built on relationships upon a currency of cash flow. Tools don’t need to be fancy; they just need to be able to perform basic tasks. The user experience must be one that enables ease of access and collaboration. The younger generation will be the main source of product feedback as this demographic collects the data, manages the assets, and executes the transactions. Not only has the under-35 generation grown up with technology, but they are the future leaders, influencers and decision makers. This does not mean current executives will be left out of the conversation, but to drive innovation, PropTech must be bold about the user experience driven by this generation. Companies that build for institutions will gain short term customers but will tend to lose longer term usership.

I have been on the frontlines of this conversation for 4 years. Starting Dottid on a napkin, I sat with every potential user: portfolio manager, asset manager, property manager, leasing agent, tenant rep, lease administrator, junior broker, construction manager. I listened to their needs. One piece of feedback remained true from all parties: product simplicity. The property owners and executives desire transparency and visibility while the agents and operators desire functionality and tools to quickly make something happen. Both want positive outcomes. However, there is a distinction in perspective. A broad spectrum exists between desiring something and requiring it. Every company needs a process to further their business; commercial real estate is no different. But, for decades the commercial real estate ‘process’ has not involved technology; this will become a requirement in the post-Covid workplace.

As companies slowly return to their office spaces and retail shops slowly open up, we will see new technologies in PropTech help both the people managing the property move faster, as well as helping the assets themselves adapt quickly to our new world. Temperature scanners, thermal imaging, plexiglass between desks, and other innovations will allow assets to become viable gathering places. What we observed from the initial shutdown due to Covid-19 is that the mantra of “time is money” will become even more important. Companies will need to find ways to engage and activate their workforces anytime and anywhere. PropTech will support remote workflow and virtual team environments.

Imagine a day when an asset or brokerage shop would be picked based on their “deal efficiency rating”? Or, on their company’s “technology rating”? The day is drawing near. Today, assets have efficiency ratings when it comes to environmental standards; Walk Score is widely used to determine an asset’s friendliness to patrons seeking food and other services. I know this may sound nuts in an industry built on relationships, but the future is here. The younger users will equip themselves with technology that helps them win business, rise within the ranks, and capture market share especially in a world where less in-person contact is the current norm.

The next iteration of PropTech is not just asset-focused. Data, already does, and will continue to play an increasingly major role. However, if the data collection cannot be done simply, then it will become irrelevant. User experience for the younger generation will lead the charge in PropTech. I implore founders to take risks in doing the simple things. I ask them to not just listen to that one big potential customer but also to go sit down and listen to the end user. Go understand their day. Spend time in their office. Learn the business from their perspective because this will enable you to build a product for a dual purpose: your own business and their ease of use.