Proptech Firms Circle an Architecture Field Resistant to Technology

Since then, technology hasn’t advanced much in their fields. Now, though, proptech companies are seeking to accelerate construction timelines through a new generation of digital tools aimed at helping builders, architects and designers become more efficient. However, the adoption level of tech innovations varies, experts said.

“In many ways, PassiveLogic was born from the needs on the architect side,” said Troy Harvey, founder and CEO of PassiveLogic, a Salt Lake City-based digital twinning platform that uses technology to make commercial, industrial and multifamily buildings more energy efficient. “How does the architect’s building design actually come to fruition on the install and construction, as well as the operation side? Many of the projects that we’ve done to date, that really started off our journey, were driven by architects.

“Today, a lot of the deals that we’re making are around the engineering and MEP [mechanical, electrical and plumbing] firms, as well as the operations and asset owners, as a kind of a full suite.”

PassiveLogic’s tech stack includes Building Studio, a tool that allows users to do design, site modeling, and simulation all in one program.

“We cover that life cycle of buildings in one suite of different tools,” said Harvey. “Different customers can come to us — whether they’re on the owner-operator side saying, ‘I have a bunch of buildings, and I work with architects,’ and it goes back up to the architects they work with — or it comes in as architects who need solutions to how their designs actually come to life and not get value-engineered out.

“In the middle is the MEP or the energy engineer who’s trying to drive a project to get to a LEED Platinum certification or something like that, working upstream with the architects and downstream with the asset owners.”

Harvey has found that proptech innovations are being adopted across the spectrum of architects, contractors and owner-operators, but he said such digital solutions must be needs specific.

“So the gap we saw is that on one end of the market, you have tools like Trimble, which has a tool called SketchUp,” he said. “It came out 20 years ago. It’s fast at sketching your rough ideas as an architect, but, at the end of the day, it doesn’t know anything about buildings. You just have this model of raw geometry. What you do today as an architect is you sketch out your rough ideas in SketchUp, you throw the whole thing away, and then you’ll go to another tool, like Autodesk’s Revit [Revit building information modeling software] and you’ll redo the whole thing from scratch.”

None of those products works seamlessly from the architect to the construction engineer to the installer, he summarized. “It’s a huge and laborious process.”

Higharc, which describes itself as a “remote-first growth-stage startup,” is focused on creating a more efficient, automated homebuilding platform based in the cloud. Michael Bergin is Higharc’s co-founder and vice president of product.

“We manage the data that’s required to build homes from the buyer’s interaction, so they can specify all the options in their home and can see the home adapted like a video game,” said Bergin, himself an architect who previously worked at Autodesk, where he led the design automation research group. “We produce assets that represent to the buyer the home that they’ve configured, as well as the pricing, if the builder has chosen to offer that.”

Through the digital management and generation of data throughout the process, Higharc can reduce a two- to five-week process to a few seconds, Bergin said.

Unlike some other proptech companies that treat architecture and design as individual disciplines, Higharc takes another approach to the residential building industry.

“We’re focused on homebuilders specifically,” Bergin said. “There’s about a million single-family homes that are built in the U.S. every year. About half of those are built in what’s called the production community style, where there’s a piece of land that is purchased and then developed into many different homes. Those homes all have options associated with them, and to the extent that we work with architects and designers, they’re typically either embedded within those homebuilders or they are third parties that are designing homes with many options and variations within them.”

While at Autodesk, Bergin worked on applying artificial intelligence (AI) to architectural design. In doing so, he realized a conflict between AI’s use and the basic architecture firm business model: “Many times, it’s a fee-based system that is correlated to the amount of time that it takes and the number of iterations that are executed in the development of a project.”

Bergin said that’s why architects have been relatively slow to adopt new technology. “So,” he said, “if you could compress all that an architect does, which is really significant even in the context of a simple home, into a very short time span using artificial intelligence, it almost goes against a lot of the incentives that exist in the architecture and engineering domain for how the business model operates today.”

Despite such resistance, Higharc does work with architects and designers, Bergin added.

“But, typically, because production builders are operating at great scale, they need to move very fast. There’s a really significant deficit in terms of the number of homes that can be built in the United States every year versus the demand in the market. So they’re building a lot of homes, and they still need to build more and more. Because of that pressure, we have found a really great entry point into the market for applying automation and artificial intelligence technology in the context of this industry, because homebuilders are incentivized to reduce that time span, which they refer to as the soft-cycle time.”

Two other proptech startups in the architecture and design arena are Brivo, a Bethesda, Md.-based cloud software company focused on security architecture and design; and Monograph, a San Francisco-based, design-centric project management platform for architecture and engineering firms.

The proptech trend extends to Spain, where Ana Lozano Portillo is the founder and CEO of Nidas Lab, a startup focused on AI-driven automation for architecture and design.

“We launched in April 2023 as a result of having developed a product that was really promising within another company I own and founded several years ago, which is a consultancy firm in real estate,” said Portillo. “It came about as a result of having identified what we consider to be the core pain in the real estate industry, especially when it comes to the early-stage investment prospects. Nidas was born to help developers, architectural firms and investment funds to unlock the potential of a particular plot by automating and optimizing the design at the early stage.”

That involves analyzing the buildable area, urban parameters and the commercial mix involved in a project, she said.

“In short, what would take us as the architectural firm to develop a project in the traditional way between four weeks and four months with a bunch of architects, we could do in less than 12 hours at a higher rate of efficiency, including several different versions of the project,” Portillo said. “This allows the investor or the developer to compare different ideas for different architectural blueprints and different ways of testing the project, even commercially speaking.”

Already operating with early-adopter paying clients in a beta version, Nidas plans to fully launch its “automatic design co-pilot” in the fall, said Portillo. The product can be used in Spain and France — and perhaps soon in the U.S. — by real estate developers, architectural firms, investment funds, and builders and contractors.

Like other founders in the architecture and design realm of proptech, Portillo is battling adoption lethargy in her native country.

“In my opinion, the U.S. market is more mature and its readiness to adopt this kind of disruptive technology is much higher than European markets, even though the biggest European players are starting to seek new tools that will make their life better, especially on the part of the problem we are seeking to solve,” she said. “The big differences are — you would be amazed about this — the small number of competitors we have around the world. Some of them are based in the U.S. One is a big competitor, Testfit. And another is in Norway, Spacemaker AI.

While startups are trying to get their noses under the architecture and design tents, KP Reddy, founder and managing partner of Atlanta-based technology venture capital firm Shadow Ventures, brings some experienced skepticism to the topic.

“Most of the deals we’re seeing are very unimpressive,” said Reddy, an engineer who previously worked with famed architect Frank Gehry at Gehry Technologies. “It’s mostly around renderings. And I’d say the real high-level conceptual things are the bulk of what we’re seeing — AI for architects.

“Now, that said, our general stance is that the architecture market is a pretty terrible market to go after as a startup. They don’t spend money, they kind of charge by the hour, and they’re not innovative with their business model thinking to say, ‘Oh, instead of charging by the hour, maybe I can do something different.’ It’s a little bit like, ‘Well, this is how we’ve charged for hundreds of years. We’re just going to keep charging the same way.’ But what’s interesting is we’re seeing a lot more movement in other people using architectural design tools to avoid using an architect.”

For a real estate developer, technology resistance is not a matter of being cheap, but more a search for time-saving innovations, said Reddy.

“They’re generally fairly disgruntled,” he said of developers who continually lament how long development takes. “And so what they’re starting to do is use some of these AI-focused tools to do a lot of their initial design.”

Reddy points to one of his portfolio companies, Icon, an Austin-based construction technology company that uses 3D robotics and software.

“They’re actually doing a lot of other buildings besides houses these days,” he said. “They created a generative AI tool where you can speak to it like, ‘Oh, design me a three-
bedroom cabin or whatever.’ So you’re seeing some of that stuff, but, if you think about it, they’re not targeting architects. They’re targeting the end customer and they’re targeting the builder.”

Designing tech tools for the architect may be missing the point, he continued.

“What’s working is creating an AI architecture tool not to work with an architect, but to go directly to an engineering firm, a construction company, or to an owner. I think that is really the first pervasive use-case of true disruption of the industry due to AI, rather than everybody’s just using AI to do their job faster. And I think that’s what’s fascinating.”

Philip Russo can be reached at prusso@commercialobserver.com.