Proptech is not new. For over 30 years, CoStar Group, for example, has virtually monopolized data monetization for real estate professionals. However, despite this and other advancements in the space, commercial real estate brokerage has been extremely slow to embrace the technology. And the simple fact remains: the way brokers do business has not changed over the past few decades.
The main reason brokers haven’t embraced more technology quickly is time. Time spent learning technology is time wasted calling prospects.
But the pandemic could be the defining event to change all that. Zoom meetings have brought more owners online. Giving tours was at the heart of office rental, but the pandemic has forced the wider adoption of virtual and self-guided tours. This led to the aha time to see where else proptech can thrive.
There are a myriad of tech players in property management who have streamlined their operations and turned out to be huge time savers. One of them is Procore Technologies, which just went public last month on the New York Stock Exchange. Procore is a fascinating data-driven project management and procurement platform for property owners. It streamlines design and construction, keeping projects on track.
There are also a number of tools for landlords, such as RentRedi, which can quickly check the backgrounds of potential tenants and collect rents via mobile.
Since trade brokerage is all about saving time, we will see more automation tools. The two that brokers should consider are Kixie and HubSpot. Both rely on conditional logic, so based on a certain input, such as email registration, a certain action in a different application may be requested. You could set up a feature that logs incoming phone calls into your customer relationship management (CRM) system and assigns a follow-up task to your assistant.
LightBox and Buildout aim to create comprehensive marketing solutions where data can be populated across different platforms.
This is a fragmented area as countless companies have cluttered up the space to develop an online registration platform for offices. SquareFoot, TenantBase, and others try to complete the good old-fashioned leasing broker tasks like visiting a property and investigating tenants.
When Auction.com first entered the real estate market 14 years ago, many people scoffed at the idea that anyone would buy a property entirely online. But $ 52 billion later and countless deals signed, people don’t laugh anymore.
Ten-X, the successor company, brought the auction to commercial real estate in 2009 with the first commercial auction. In 2018, the company surpassed $ 20 billion in total sales volume, and a year later, CoStar bought Ten-X for $ 190 million.
Perhaps one of the slowest market segments to adopt technology has been debt brokerage. The idea was that commercial borrowers would never agree to the process, due to all the nuances of a business loan. Twenty years ago, Capital Engine, Redbricks and Precept failed to become online commercial mortgage brokerage platforms. However, their timing may have simply been shifted.
Recently, a few players have entered the market with the aim of making the trade finance process more efficient and transparent by creating an online marketplace for every transaction. This allows borrowers to access loan options that they would never have considered otherwise and results in better transaction terms.
TrueRate Services goes one step further and uses institutional grade data to generate automated sizing of the potential loan using current rates, while providing lenders with assistance to maximize the results of the submission process.
So while brokers have been slow to embrace proptech, the pandemic has clearly moved things forward. Just as it was considered absurd that online stock trading would usurp stock brokers on the NYSE, automation could one day replace the broker in sale, mortgage, or lease.
Dan Gorczycki is Managing Director of TrueRate, a subsidiary of Olive Tree Holdings.