{"id":1004659552,"date":"2023-05-03T14:18:18","date_gmt":"2023-05-03T22:18:18","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004659552"},"modified":"2023-05-11T02:41:16","modified_gmt":"2023-05-11T10:41:16","slug":"cre-is-still-hungry-for-proptech-but-tastes-are-more-refined","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/cre-is-still-hungry-for-proptech-but-tastes-are-more-refined\/","title":{"rendered":"CRE Is Still Hungry for Proptech, but Tastes Are More Refined"},"content":{"rendered":"

Proptech investment fell dramatically from $32 billion in 2021 to $19.8 billion in 2022, according to data from the Center for Real Estate Technology and Innovation. Technology in real estate isn\u2019t any less important than it was two years ago. It is probably more important. But this is a different market, and the proptech business has matured. Investors and users are more results-driven, and they are prioritizing certain types of applications and services above others.<\/p>\n\n\n

\n
READ THE DIGEST<\/a><\/div>\n<\/div>\n\n\n

\u201cGiven the economic climate, there has been a focus on solutions that have real ROI, operational efficiency at the property level and streamlining workflows,\u201d said Christopher Yip, partner & managing director at RET Ventures<\/strong>, a proptech investment company specializing in multifamily real estate.<\/p>\n

Another sign of maturity is less duplication among startups. Previously, if one startup was successful, many others would follow with the same type of application, noted Nikki Greenberg, founder & chief innovation officer of Real Estate of the Future<\/strong>.<\/p>\n

\"Image

Image by Yevhen Lahunov\/iStockphotos.com<\/em><\/p><\/div>\n

Changing priorities and sentiments<\/h2>\n
\"Raj<\/a>

Raj Singh. Image courtesy of JLL<\/em><\/p><\/div>\n

Data from MetaProp<\/strong>\u2019s year-end-2022 Global Proptech Confidence Index shows that investor confidence ranks at a 5.4 out of 10, a nearly twofold decrease from 2021\u2019s all-time high of 9.3. Startup confidence, though slightly elevated from mid-year 2022, is at 4.4 out of 10.<\/p>\n

The cooling sentiments, however, seem to represent increased caution and selectivity rather than an outright desire to reduce the scope and scale of investment. That\u2019s because MetaProp also found that 45 percent of respondents anticipate making the same number of business ventures, and 26 percent of those respondents foresee net increases in their portfolio sizes.<\/p>\n

\u201cThe appetite (for investment) is a bit reduced from where it was, but it\u2019s less about what proptech is and more about where proptech is in the market,\u201d said Raj Singh, managing partner at JLL Spark<\/strong>, JLL\u2019s proptech-focused venture capital arm.<\/p>\n

For Singh, a winning proptech investment strategy for real estate companies should be oriented toward proven results that align with a given company\u2019s goals as opposed to the flashiest new technologies. \u201cThe attitude has shifted to \u2018show me what you\u2019ve done\u2019 as opposed to telling me what you are going to do,\u201d he said.<\/p>\n

The data dominates<\/h2>\n
\"Nikki<\/a>

Nikki Greenberg<\/p><\/div>\n

The desire for the most accurate and accessible data has helped buoy investor sentiments, according to Greenberg. Commercial real estate companies are using data to analyze and optimize everything from investment strategy to financial performance of properties to climate-based risk reduction.<\/p>\n

Any use of data in any investment or operational capacity needs to clear two key hurdles, according to Ohad Porat, chief investment officer at Faropoint<\/strong>, an industrial real estate investment firm.<\/p>\n

\u201cThe first level is aggregating the data and funneling it in the right way, and the second is (knowing) which analytics to apply to leverage technology,\u201d Porat said.<\/p>\n

Faropoint is developing its own proprietary technologies for pipeline management and AI-powered analytics tools to determine rental rate and rental growth. With the data, the firm can produce \u201csuperior analytics,\u201d which Porat sees as the key differentiator in commercial real estate. \u201cMany industries are applying big data and analytics and the companies that do it better are prevailing at the end,\u201d he explained.<\/p>\n

How new data capabilities are merged with a firm\u2019s given proptech operations and analytics platforms is key, however. \u201c(It\u2019s) not a matter of simply introducing new features, but one of looking left and right and making sure that it is getting integrated with existing systems, APIs and other coordination,\u201d Porat said.<\/p>\n

\"Dave<\/a>

Sandeep Dave. Image courtesy of CBRE<\/em><\/p><\/div>\n

Data analytics have been at the center of CBRE\u2019s major tech investments. \u201cWe are very passionate about the potential for data and technology in our business,\u201d Dave told Commercial Property Executive.<\/em> \u201c<\/p>\n

Last year, CBRE made a $100 million investment in VTS, a property management and technology platform the firm had been investing in since 2016. It also purchased E2C, an AI and data-based facilities management platform the firm was already using as well.<\/p>\n

Dave described the investments as \u201cstrategic partnerships\u201d in products that the company uses and had previously invested in. \u201cWe don\u2019t think of ourselves as venture capital (investors),\u201d Dave explained.<\/p>\n

Connectivity, Productivity and Sustainability<\/h2>\n

The pandemic brought a hyper focus on how commercial space is (and is not) used and operated, particularly office space. Therefore, there has been increased attention on technologies that enhance efficiency and tenant engagement and track how tenants use space.<\/p>\n

\"Mikki<\/a>

Mikki Ward. Image courtesy of EQ Office<\/em><\/p><\/div>\n

\u201cWe believe the workplace experience goes far beyond being able to unlock doors and reserve amenities,\u201d opined Mikki Ward, senior vice president of technology and innovation at EQ Office. <\/strong><\/p>\n

Thus, the firm has turned to streamlining the tools tenants use for connectivity and their workplace experiences, striving to reduce the number of applications it uses for such tasks.<\/p>\n

\u201cTenants can feel overwhelmed utilizing different apps and technologies to manage day-to-day needs,\u201d Ward said.<\/p>\n

One such investment is a partnership with cove<\/strong>, a tenant experience and engagement application that provides traditional property management, tenant experience and coworking services.<\/p>\n

Equally important to an optimal, efficient use of space is the way in which it is interacted with in the first place. As smart buildings and smart offices become ever-more prevalent, operators have taken to making work within them reflect these trends.<\/p>\n

\u201cThe physical workplace is becoming more digitally integrated, and it\u2019s important, as landlords, to provide tools that activate smart offices for tenants,\u201d Ward said.<\/p>\n

\"Ohad<\/a>

Ohad Porat. Image courtesy of Faropoint<\/em><\/p><\/div>\n

EQ Office has adopted a secure network service provided through essensys, <\/strong>a platform that allows tenants to work at any space within a property.<\/p>\n

Office work is also a focus for JLL Spark, and the firm has taken a data-driven approach to its investments. Questions that governed JLL Spark\u2019s investment approach to technologies in this space include: \u201cWhat\u2019s the future looking like?\u201d, \u201cHow much space will we actually need?\u201d and \u201cHow should that space be configured?\u201d<\/p>\n

Spark has an entire set of investments dedicated to the future of work. Investments include Avo<\/strong>, an employee and client recognition platform, and HqO<\/strong>, a tenant-centered building amenity access platform. An equal amount of attention has been paid to proptech that helps real estate professionals achieve sustainability goals.<\/p>\n

\u201cWe believe that more efficient and sustainable buildings are more in demand from tenants and, thus, more valuable,\u201d Ward told Commercial Property Executive<\/em>. \u201cSo, investment in climate technology will continue to grow.\u201d<\/p>\n

JLL Spark has invested in emissions trackers such as Ecolibrium<\/strong>, alongside Infogrid<\/strong>, a data-driven, automated building performance monitoring platform, in anticipation of further decarbonization policies as well as companies\u2019 net-zero goals. \u201cAs an industry, we know that we have a huge target that we need to meet, and it\u2019s become very real for owners and occupiers,\u201d he said.<\/p>\n

Read the May 2023 issue of CPE.<\/em><\/a><\/p>","protected":false},"excerpt":{"rendered":"

Though overall investment is dipping, the desire for data analytics and efficient use of space grows more intense. <\/p>\n","protected":false},"author":3012,"featured_media":1004659574,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21781,1521,21808],"tags":[],"class_list":["post-1004659552","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-corporate-real-estate","category-digital","category-featured"],"acf":[],"yoast_head":"\nCRE Is Still Hungry for Proptech, but Tastes Are More Refined - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/cre-is-still-hungry-for-proptech-but-tastes-are-more-refined\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CRE Is Still Hungry for Proptech, but Tastes Are More Refined\" \/>\n<meta property=\"og:description\" content=\"Though overall investment is dipping, the desire for data analytics and efficient use of space grows more intense.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/cre-is-still-hungry-for-proptech-but-tastes-are-more-refined\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2023-05-03T22:18:18+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-05-11T10:41:16+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/04\/iStock-1162194052-Image-by-Yevhen-Lahunov.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1730\" \/>\n\t<meta property=\"og:image:height\" content=\"1298\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Gabriel Frank\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cre-is-still-hungry-for-proptech-but-tastes-are-more-refined\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/cre-is-still-hungry-for-proptech-but-tastes-are-more-refined\/\",\"name\":\"CRE Is Still Hungry for Proptech, but Tastes Are More Refined - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cre-is-still-hungry-for-proptech-but-tastes-are-more-refined\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cre-is-still-hungry-for-proptech-but-tastes-are-more-refined\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/04\/iStock-1162194052-Image-by-Yevhen-Lahunov.jpg\",\"datePublished\":\"2023-05-03T22:18:18+00:00\",\"dateModified\":\"2023-05-11T10:41:16+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/cf1bfd2d6753f6ea305911ffd020862c\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cre-is-still-hungry-for-proptech-but-tastes-are-more-refined\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/cre-is-still-hungry-for-proptech-but-tastes-are-more-refined\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/cre-is-still-hungry-for-proptech-but-tastes-are-more-refined\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/04\/iStock-1162194052-Image-by-Yevhen-Lahunov.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/04\/iStock-1162194052-Image-by-Yevhen-Lahunov.jpg\",\"width\":1730,\"height\":1298,\"caption\":\"Feature: CRE Still Hungry for Proptech, But Its Tastes Are More Refined. 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