Smart Cities’ Future Rests On Proptech and Data: Forum
And on the metaverse. Here, let the experts explain.
The metaverse is more than minecraft — with the potential to launch a new, innovative era of commercial real estate. During Commercial Observer’s latest proptech forum last week, “Interactive Cities & the Metaverse: Activating Real Estate Transformations,” industry experts discussed the ways in which technology can redefine user experiences across urban environments, whether at the office, in a store or within a city at large.
The April 12 event — held virtually, appropriately enough — was the first in CO’s “Proptech Insider Live” series, which will outline market changes affecting and contributing to proptech’s rapid growth.
Josh Schuster, managing principal of Silverback Development, moderated the first panel, fittingly entitled, “Welcome to the Metaverse.” He spoke alongside Andrew Kiguel, CEO of blockchain technology company Tokens.com; Jeffrey Berman, general partner at venture capital firm Camber Creek; and Michael Phillips, principal and president at investment and ownership company Jamestown. They overviewed opportunities for the metaverse to facilitate new avenues for engagement and convenience.
“The metaverse is a 3D virtual world that you access through your browser,” Kiguel said.
He noted that the metaverse has evolved beyond gaming and social media to become an all-encompassing digital sphere. In the past year, the metaverse has become a hot topic of conversation, thanks to some combination of Facebook’s rebrand to Meta and the pandemic; COVID-19 has broadened non-traditional means of socialization and communication, made possible through technological devices. Likewise, the usage of blockchain technology and NFTs has created self-contained digital economies.
This upheaval in the metaverse has the potential to drive efficiencies across commercial real estate.
“The fundamentals of bricks and mortar are similar to the fundamentals of digital,” Phillips said. “It’s a matter of speaking to a constituency, creating an engagement model and product or a service that people want to consume.”
As for retail, the metaverse has already begun to prove its value. In March, Web3 metaverse Decentraland held Metaverse Fashion Week, which drew 100,000 unique visitors over a two-day period. Kiguel noted that over 60 designers made an appearance, while the average time visitors spent in Forever 21, which filed for bankruptcy in 2019, was 27 minutes. This statistic posits a positive outlook as to how consumers may interact with fashion in a burgeoning 3D digital world.
Such changes have already yielded short-term success, though their long-term potential is even greater, as implementation is still in its early stages. As of now, accessing the metaverse is not yet frictionless. Participation requires a clunky headset for full immersion, creating what Berman deemed a case of hype exceeding utility. He noted that he is currently assessing how to best utilize technology to address commercial real estate’s challenges, like incentivizing tenant traffic in offices.
As the metaverse finds its footing, data collection is pivotal in the interim — a sentiment emphasized by experts on the followingpanel. Philip Russo, who writes Commercial Observer’s PropTech Insider newsletter, moderated “Making a Case for Proptech Investments Through Property Valuations & Data-Driven Investments,” which featured Nikki Greenberg, head of technology, strategy and digital management at QIC Real Estate; Lauren Mead, vice president of marketing at proptech company HqO; and Jenny Wong, a senior managing director at real estate owner and developer Tishman Speyer.
Data collection can elucidate what tenants want and what they use, Mead said. Companies can determine what investments are worth making by first assessing what amenities will increase occupancy, maximize leasing, retain tenants and the like. Analyzing data allows for informed investments and can minimize the probability of a sunk cost.
Yet implementing new technologies isn’t just about the digital. Progressing in proptech not only requires physical changes, but also an evolution in mentality, Greenberg said. Experienced real estate professionals may be unaccustomed to the digital canon, which is only just beginning to gain traction. Adapting to and adopting the latest technologies require a new vocabulary and may come with a steep learning curve.
No matter how challenging, however, installing new technologies still requires less time than getting a building off the ground. As commercial real estate is contingent on high-quality spaces, the digital experience should match the physical one in standard and strength, Greenberg said. Strategizing prior to executing is therefore key.
When clustered together, these technologies may eventually yield smart cities, the future of which the event’s third and final panel discussed. In “Smart Cities & the Emergence of Innovation Districts,” CO’s Tom Acitelli moderated a conversation with Aaron Brondum, vice president of customer success at software company Prescriptive Data; Todd Burner, chief product officer at security firm Kastle Systems; Vardahn Chaudhry, vice president of smart cities and digital infrastructure at developer JBG Smith; Jason Clark, executive director at technology nonprofit Tech:NYC; and Tracy Sayegh Gabriel, president and executive director of Northern Virginia’s National Landing Business Improvement District.
Sayegh Gabriel defined a smart city as an urban district with technology, transportation and infrastructure that allows for collaboration and invention. This type of city uses digital resources to enhance the physical experience, enabling people to engage with their environment in a productive and communal way.
This theme of connectivity resounded throughout the panel, as the panelists agreed that the merging of the digital with the physical can create a synchronous environment for users. People don’t move because of technology, Sayegh Gabriel elaborated, but technology can make a place more exciting, integrated and seamless. She and Chaudhry cited National Landing as an infrastructure-focused environment in the D.C. region, soon to connect — by foot even — with Ronald Reagan Washington National Airport.
Data collection can allow for places like National Landing to also address tenant safety. If developers understand traffic patterns at a specific time of the day, for example, they can subsequently work to make intersection crossings safer.
From an energy standpoint, data collection has equally life-changing potential. Using video cameras and IoT sensors, office landlords may understand how and when their tenants are utilizing any given asset. Such knowledge can adjust heating, cooling and lighting resources.
“This data that already exists within the building can be harnessed and brought together and used to drive some pretty important ESG-related outcomes,” Burner said of the environmental, social and governance standards increasingly important to real estate investors and tenants.
Yet collecting this intel requires trust between users and the technologies at play. A connected urban environment is contingent on access to 5G, private networks and private spectrum, but the community must first buy into the smart city, both Clark and Chaudhry said. Clark noted that although the pandemic accelerated technological opportunities, trust is an asset that cannot be expedited. The community must understand and get comfortable with the logistics of a smart city, while those behind the new technologies should assure users that their privacy will not be compromised.
Still, even with technology primed for the taking, the future may be further away than we think.
Collaboration is an outcome of smart cities but also a necessary input — one that comes with a lag. According to Brondum of Prescriptive Data, the most significant barrier to smart cities is coaxing separate entities and organizations to work together toward a common goal. Balancing multiple motivations, stakeholders, personalities and desires requires deliberate thinking and planning, with the potential to create an urban environment with a lasting impact.
“Let’s not make smart cities for smart cities’ sake,” Brondum said. “Let’s make it to solve an actual problem.”
Anna Staropoli can be reached at firstname.lastname@example.org.