Proptech is not new. For more than 30 years, CoStar Group, for example, has nearly monopolized the monetization of data for real estate professionals. However, despite that and other advancements in the space, commercial real estate brokerage has been glacially slow to adopt technology. And the simple fact remains: The way brokers conduct business has not changed for the last few decades.
The primary reason that brokers haven’t been quick to adopt more tech is time. Time spent learning tech is time lost for calling prospects.
But the pandemic might be the watershed event to change all of that. Zoom meetings brought more owners online. Giving tours was the crux of office leasing, but the pandemic forced the wider adoption of virtual and self-guided tours. This has led to the aha moment of seeing where else proptech can thrive.
There are myriad tech players in property management that have streamlined operations and proven to be huge timesavers. One of note 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 real estate owners. It streamlines design and construction, allowing projects to stay on track.
There are also a number of landlord tools, such as RentRedi, which is able to do quick background checks on prospective tenants and mobile rent collection.
Since commercial 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 that based on a certain input, like an email signup, a certain action in a different application can be prompted. One could set up a function that records incoming phone calls to your customer relationship management (CRM) system and assigns a follow-up task to your assistant.
This has been a fragmented field as countless firms have crowded the space on developing an online listing platform for office space. SquareFoot, TenantBase, and others are trying to supplement good, old-fashioned, leasing broker tasks like walking a property and surveying tenants.
When Auction.com came into the real estate marketplace 14 years ago, many people scoffed at the notion that anybody would buy a property entirely online. But $52 billion later and countless deals inked, people aren’t scoffing 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 purchased Ten-X for $190 million.
Perhaps one of the slowest segments of the market to adopt technology has been debt brokerage. The thinking has been that commercial borrowers would never take to the process, due to all of the nuances of a commercial loan. Twenty years ago, Capital Engine, Redbricks and Precept failed at becoming online commercial mortgage brokerage platforms. However, their timing may have simply been off.
Recently, a few players have entered the market with the goal of making the commercial financing process more efficient and transparent by creating an online marketplace for each transaction. This allows borrowers to access lending options they otherwise would have never pursued and results in better deal terms.
TrueRate Services takes it further and uses institutional-grade data to generate an automated sizing of the potential loan using current rates, while supplying lenders with support to maximize results in the submission process.
So, while brokers have been slow to adopt proptech, the pandemic has clearly moved things along. Just like it was considered absurd that online stock trading would usurp floor brokers on the NYSE, someday automation could replace the sales or mortgage or leasing broker.
Dan Gorczycki is a managing director for TrueRate, a subsidiary of Olive Tree Holdings.