What To Expect From Real Estate Tech In 2018

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As seen in Forbes

The real estate tech sector is being shaped by shifting market conditions and changes in consumer behaviors. Every year, RE:Tech tracks and analyzes emerging trends in real estate tech to better understand technology's impact on the industry. The purpose is to help prepare real estate professionals and organizations for the future by collecting, assessing and reporting the trends that will most impact them.

For the past decade, emerging technology companies that focus on commercial and residential real estate products and services have moved quickly, forcing traditional real estate firms to rethink their core business models and embrace digital first innovations. But as the real estate tech sector begins showing signs of maturity, companies wondering how they will fit into this new era must understand the forces that are leading change.

While the industry will undoubtedly continue to expand as investor appetite remains tenacious and its customer base grows, changes are imminent. The very concept of what comprises real estate tech will shift. As the industry evolves, it will play a role well beyond real estate products and services, individual companies will vie to become undisputed leaders by size and breadth and ecosystems will develop that have a tight grip on customer loyalty.

As technology and innovation continue to hold the key to reshaping the real estate industry, emerging real estate tech companies are creating an opportunity to weave themselves into the new digital real estate ecosystem. What’s the next step forward? Use the power of technology to improve the real estate industry.

The purpose is to help prepare real estate companies and organizations for the future by collecting, assessing and reporting the trends that will most impact them. These trends are based on quantitative and qualitative data including conversations with executives and thought leaders.

Here are the most important real estate tech trends to watch for in 2018.

The Rise Of Transaction-Engagement Focused Tech

Throughout 2017, one of the largest growing trends in real estate tech has been the shift from traditional transaction experiences to a more curated online experience.

A great example of this is Robert Refkin, the CEO and founder of Compass. Compass is building the first modern real estate platform, pairing the real estate agents with technology to make the search and sell experience intelligent and seamless.

Earlier this year, Compass unveiled its latest development in the mission to modernize real estate with the launch of Collections, an interactive online home search tool. Touted as "the Pinterest of real estate," Collections enables home buyers and agents to organize, discuss and collaborate on hand-picked properties, ultimately streamlining the transaction-engagement process by better understanding buyer behavior.

Chatbots In Real Estate

From Apple’s Siri to the Amazon Echo, chatbots were everywhere in 2017. Chatbots are emerging as powerful customer service tools in many industries. Whether you realized or not, you've most likely encountered a chatbot while browsing or shopping.

When it comes to real estate, chatbots have the potential to revolutionize lead generation and customer service. By automating the initial stages of contact between agents and prospects, a real estate chatbot can be more efficient in engaging visitors, resulting in higher lead conversions.

Blockchain And Real Estate Transactions

Earlier this year, Velox RE and the Cook County Recorder of Deeds took part in a pilot project exploring how blockchain technology could be used to store property records in the 5.2 million-resident county, which includes Chicago.

Blockchain is a continuously growing list of records, called blocks, that are linked and secured using cryptography. It is best known for keeping track of who owns digital currencies like Bitcoin. Advocates of the technology say it can revolutionize real estate deals and recording keep costs. A new form of data management has piqued the interest of the real estate industry, especially financial institutions and lenders.

As technology and innovation in real estate continue to evolve, one thing is certain: The real estate industry is long overdue for a shake-up. Transactional real estate, including sales and leasing in residential and commercial, have been high-value targets by "tech-first" companies. Ultimately, today’s real estate tech companies won't necessarily disrupt an industry but will disrupt legacy companies that refuse to adapt.

 

Global Trends: Newly Formed Companies in Real Estate Tech

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The excitement for innovation and entrepreneurship in the real estate industry, has increased at breakneck speed since 2013.  Innovation and entrepreneurship is considered to be the backbone for economic development in many industries, including real estate.  Despite record highs in global VC investments, the speed at which new real estate technology companies are forming are at record lows. 

Real Estate Tech at a Glance
The total number of newly formed real estate tech companies decreased by 78 percent since the start of 2017.  Much of the downward trend has been due to the continued decline of “sustainable” entrepreneurship coupled with a continued decrease in angel/seed financing.

Year to date (Q1-Q3 2017),  55 companies formed with an estimated 8 more to launch in Q4 2017.  By year-end 2017, newly formed companies in real estate will have decreased by an average of 35 percent.  

It’s important to note that although the volume of financing and newly formed companies has declined for some time now, the current level is not cause for panic. Moreover, vertical startups, like real estate tech, present a dynamic paradigm for the industry and investors alike.

Inside the Q3 2017 Real Estate Tech Venture Capital Ecosystem

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One thing is clear in real estate tech, the market for startup equity is on firmer footing now than it was earlier in the year. With two successive quarters of growth in the amount of money invested, as well as a growing appetite on the part of the global real estate market innovation, there’s reason for cautious optimism going into the fourth quarter of 2017.

  • Bullish Finding: Dollar volume is up across almost all stages, and round sizes continue to grow. Across most measures, the global real estate tech VC market is on track to return to previous highs, if growth continues.
  • Bearish Finding: Despite growth in dollar volume, both deals volumes have slowed and measures of late-stage financings suggest a return to historic highs will be slower to come. 

An overview of the REAL ESTATE TECH + vC landscape

In the third quarter of 2017, the venture capital investment in real estate tech continued the trajectory set by the first quarter, one of recovery from a slump in the second half of 2016 due to looming uncertainty.

For better and worse, many sources of uncertainty, including the ballooning and seemingly unsustainable valuations of the U.S.’s largest private tech companies, have come to a head, and investors have seemingly adjusted to the new normal. Q3 2017 was all about managing and extending the gains made in the first half of the year.

Deals & Dollars

The total number of funding rounds in Q3 2017 decreased by roughly 34 percent compared to Q3 2016, amounting to approximately 37 deals. This change was primarily driven by a decrease in seed, angel and early-stage funding rounds.

The total dollar volume in Q3 2017 took a massive blow compared to Q3 2016, with a 56 percent decrease in total funding amount, amounting to approximately $372 million.

Year to date (Q1-Q3 2017), the total number of funding rounds at all stages declined by a projected 10 percent to roughly 228 deals, compared to the same period in 2016.

The total dollar volume from Q1-Q3 2017 grew by a projected 85 percent to $5.9 billion, compared to Q1-Q3 2016. 

Since Q1 2017, U.S. based real estate tech companies received the lion share of venture funding with approximately $2.3 billion in 144 deals.  In terms of deals, NYC based companies made up 22 percent of the U.S. market with 31 deals.  Additionally, $892 million went to NYC based companies, representing approximately 39 percent of the U.S. market.

Embracing for Three Critical Changes in Real Estate Tech

The real estate tech sector is being shaped by shifting market conditions and changes in consumer behaviors.

For the past decade, real estate tech startups - technology companies that focus on commercial and residential real estate products and services - have moved quickly, forcing traditional real estate firms to rethink their core business models and embrace digital first innovations. But as the real estate tech sector begins showing signs of maturity, companies wondering how they will fit into this new era must understand the forces that are leading change.

While the industry will undoubtedly continue to expand as investor appetite remains tenacious and its customer base grows - changes are imminent. The very concept of what comprises real estate tech will shift. As the industry evolves, it will play a role well beyond real estate products and services, individual companies will vie to become undisputed leaders by size and breadth, and ecosystems will develop that have a tight grip on customer loyalty.

This new real estate tech era is being shaped by changes in market conditions, new regulations, and shifts in consumer demands and behaviors. As a result, the industry is becoming more cautious, even as it becomes more diverse across technologies and products.

 

 

 

RE:Tech research suggests three critical aspects of this new environment that must be understood to thrive in the shifting market.

1. Expanding Scope
The scope of products and services offered by real estate tech startups is expanding rapidly. Where once companies focused on marketplace platforms and CRMs,  the industry’s reach has extended into a dozen or so areas including mobile, big data, virtual reality, crowdfunding, lending, automation, and more.

2. Expanding Diversity
The real estate tech sector is also becoming more diversified, with a wide variety of business models seen across various asset classes, geographies, and technologies. A popular real estate tech business model has been a start-up addressing a specific customer need, such as housing or office space.  

Real estate tech leaders, such as VTS, were among the first to dramatically accelerate and improve the real estate management process - a model outside of other popular real estate tech business models.  Today VTS seems to be adjusting their business model to encompass a wider range of services, diversifying business categories within the greater real estate industry - including brokerage, management, and ownership services.

3. Expanding Consolidation
As the industry begins to show signs of maturity and a decrease in newly funded real estate tech startups - the real estate tech sector will likely enter a era of consolidation - with mid-sized and larger companies turning to mergers and acquisitions to expand their product offerings.
 

 

Real Estate Tech Market Snapshot - July 2017

July was a sluggish month for the real estate tech sector.
The real estate tech sector struggled to perform at June 2017 or July 2016 levels.  Amid a June rally and healthy stock market, early stage and late stage investors scaled back investments in real estate tech companies.

According to Crunchbase data, in July 2017, six (6) real estate tech companies were funded, a 40 percent decrease when compared to July 2016.

From June 2017 though July 2017, sixteen (16) real estate tech companies were funded.  Month over month, the real estate tech sector experienced a 40 percent decrease.

July Real Estate Tech Snapshot

  • Total Funded Amount: $1.260 B
  • Average Funded Amount: $252 M
  • Median Funded Amount: $524,028
  • Max Funded Amount: $760 M
 
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Real Estate Market Report

July 2017 

 

Real Estate Tech Venture Capital Report - Q1 2017

Investments in real estate businesses, including real estate tech, was off to a strong start in Q1 2017.  

Despite the strong start, venture capitalists are extra cautious and doubling down on established businesses, while returning back to rational dealmaking in real estate and real estate tech, regarding new investment data from Q1 2017.

Venture firms deployed nearly $3 billion in 70 companies, according to data by Crunchbase. However, 90% of venture capital was received by only 10 companies, including WeWork, PropTiger and Placester.  Additionally, non-tech/software based businesses, received nearly $2.65 billion in funding.

Real Estate (Non-Tech/Software) | Q1 2017

  1. WeWork | New York City | $1 Billion

  2. Global Switch | London | $526 Million

  3. The Lighstone Group | New York City | $305 Million

  4. e-Shang Redwood | Shanghai | $300 Million

  5. OfferPad | Gilbert, AZ | $230 Million

  6. ASRR Capital | Tel Aviv | $90 Million

  7. Ladder Capital Finance | New York City | $80 Million

  8. Opus Bank | Irvine, CA | $53 Million

  9. Phoenix Group India | Hyderabad, India | $47 Million 

  10. Knotel | New York City | $25 Million

Despite the disproportionate split between real estate tech and none tech investments, the global real estate tech sector received nearly $333 million from venture firms.  Venture firms deployed nearly $173 million in US based firms.  

Real Estate Tech (Software/Hardware) | Q1 2017

  1. PropTiger | Gurgaon, India | $55 Million

  2. Placester | Boston | $50 Million

  3. HouseCanary | San Francisco | $33 Million

  4. Knock | New York City | $32.5 Million

  5. Mindspace | Tel Aviv | $15 Million

  6. Credifi | New York City | $13 Million

  7. Square Yards | Gurgaon, India | $10 Million

  8. Nested | London | $9.9 Million

  9. Goodlord | London | $8.9 Million

  10. Trussel | London | $5.6 Million

$3.9 Billion Invested in Real Estate Tech

Real Estate Tech.  Venture capitalists invested $3.9 Billion in 26 Deals year to date, according to data by Crunchbase.  Carried by WeWork's $3 Billion investment by SoftBank, overall the global real estate tech sector has been off to a strong start.  Improving on investor confidence, mid-market investments, funding ranging from $1 million - $5 million, represented 46% of invested companies, pointing to a healthy overall growth in market activity.

Coworking.  Since the highly publicized success of WeWork, coworking has become big business.  WeWork, the leading coworking brand raised over $3 Billion in venture capital.  Knotel raised over $25 Million, financing the firm's rapid growth.  Collectively, the coworking sector raised over $3.25 billion in VC funding.

 
 

Demystifying Real Estate CRM Adoption Rates

Digital strategies have already delivered a major blow to businesses slow to respond. The very concept of work-strategies are being redefined as different generations enter and exit the workforce in the thick of a rapidly changing technological landscape fueled by startups.

An area of technological interest for the better part of ten years has been customer relations management platforms, or CRM. During that time, nearly half a billion dollars have been invested in some of today's leading CRM real estate tech startups globally.  However, as investors and real estate firms our capital to find the "Salesforce of real estate," a question remains,  do CRM's lead to sales?  

Based on a RE:Tech study, real estate organizations and brokerage professionals have access to a CRM system. In fact, 85% of real estate professionals said they have access to a CRM.  But, of more than 500 survey respondents, 45% said they use some sort of CRM to manage their business.  However, only 25% of respondents stated that having access to a CRM has lead to sales.

 

Has having access to a CRM lead to sales?

 

 

This trend in real estate seems to be backed by a larger macro trend in the CRM industry. Based on a CSO Insight study, 80% of the more than 1,000 companies surveyed have a CRM solution. But only a 1/3 have adoption rates of at least 90%.

The sentiment amongst real estate professionals has been, CRM's at best are considered a waste of time, at worst hinders production. "CRM's aren’t embraced by real estate professionals because, frankly, they don’t think it gives them a good return on their investment," according to a real estate broker in New York.

Additional research by Accenture reveals that:

  1. 59 percent of global sales executives say they have access to too many sales tools and are bombarded by too much-disaggregated customer data to be effective.
  2. 55 percent of sales representatives consider their sales tools to be more of an obstacle than a facilitator of sales performance.
  3. Sales productivity has decreased from 41 percent five years ago, to 36 percent today.
  4. 58 percent of sales executives are concerned about achieving this year’s sales targets.

It seems that many real estate professionals are struggling to drive value from their CRM tools. However, CRM is showing the highest growth of all the sub-segments of the cloud-computing industry, according to Gartner.

In the business of real estate, data is vital to sales and future sales. But statistics show that there’s a huge gap between gathering information and transforming it into meaningful and actionable to achieve sales objectives.

The Solution:  Customer Relationship Automation bridges the gap.  CRA transforms data into information that sales and business-development professionals can easily understand and take action on. Additionally, real estate professionals won’t be tied down mundane activities such as data entry. 

As a result:

  • Time:  CRA saves the average real estate professional an estimated 5 hours per week.
  • Accuracy: CRA's eliminate human error, such as data entry errors.
  • Efficiency: CRA's eliminates the time spent on activities such as downloading data or figuring out how to use it. 

Research: Customer Service is the New Sales

In today’s on demand world, sustainability and growth is dependent on customer service experiences that keep clients and potential clients engaged.

Customer acquisition is timely and costly, especially in the commercial real estate industry. Real estate companies with large, embedded client bases that improve customer retention may increase margins by hundreds of millions of dollars. How? By improving customer service.

While several real estate companies have begun to acknowledge the profit potential associated with churn reduction, also know as cancelation reduction, few have mastered the art of customer service. In the digital age, lease execution and commissions are no longer the singular point of victory. Customers are won long before the transaction. Retention is impacted by the experiences they have and the knowledge presented to the client while evaluating potential offices spaces, term negotiation, and other services.

 

A Game of Musical Chairs in Brokerage

Survey Question: Have you worked with multiple brokers? 4/5 tech startups seeking 5,000 sq.ft. switched brokers at least once in Q1-Q2 2016.
 

In the digital age, technology has helped with presenting better information with more robust data, but customer acquisition and retention has remained a white gloved service that requires the commodity of time.

Based on RE:Tech research, 80 percent of tech startups in New York seeking 5,000 sq.ft. (minimum) of office space switched brokers at least once due to poor service in 2016. The estimated value of what RE:Tech calls the “broker neglect” is $4.2 billion.

The service experiences most likely to frustrate clients:

  • Inaccurate claims
  • Under-delivered performance
  • Unresponsive to emails and phone calls
  • Impolite and/or unprofessional service

Survey: Real Estate Tech Competition Has Not Gotten More Fierce

In the age of technological innovation, buildings are getting smarter, people are more connected, and the workforce has become more mobile.  However, with change comes a increased pressure to compete and perform.  The Internet has made almost every company vulnerable to greater competition. Barriers to entry are withering, innovations are easily copied, and for many legacy businesses "disruption" is everywhere.  

As the real estate ecosystem continues to shift and consolidate, are real estate tech companies actually creating innovative solutions?  Are today's commercial real estate tech startups making real estate more efficient?  

According to a RE:Tech Survey, an overwhelmingly 95% of commercial real estate professionals believe real estate tech companies are not impacting their business or seizing the opportunity to innovate the industry.  "There are only a handful of real estate startups making a difference," say a Commercial Real Estate Broker in San Francisco

While Silicon Valley and Silicon Alley may be buzzing with startups, "many real estate tech companies are copying each other or picking the low hanging fruit," says a Senior Commercial Real Estate Broker in NYC.  

 

A Lack of CRE Disruption?

Q: Are today's commercial real estate startups impacting the Industry or your business?
 

A major challenge for many real estate tech companies has been customers acquisition.  Could part of the problem simply be inertia or is there truly a lack of ground breaking innovation?  While the answers could be a collective of both, the fact is "real estate tech has not gotten more fierce with competition," according to a Commercial Real Estate VP in Chicago.  

Recommendation:  The lack of competition and diversified product offerings impacts consumers, namely real estate professionals.  While there are tremendous opportunities for real estate entrepreneurs to make a longterm and positive impact on the industry, the lack of innovation and competition has kept the industry at a slight standstill.

To begin the next phase, real estate tech startups and entrepreneurs should evaluate process deficiencies within the real estate services value chain and implement a digital strategy that collaborates rather than alienate or imitate.  

 

Source: RE:Tech conducted a survey of 300 randomly selected commercial real estate brokers in New York, Chicago, Los Angeles, DC, Boston, Dallas, and San Francisco. 

 

The Decline of Real Estate Tech Startups

Entrepreneurship is vanishing in real estate tech.

Entrepreneurship in real estate tech seems to have gone the way of Greece’s economy — dramatic decline.

Real estate tech has felt the hit globally. A recent study conducted by Falkon shows that from 2012 to 2015, 282 real estate tech startups, on average, were launched each year. That number fell to a meek 69 in 2015-2016.

In just a few short years, the real estate tech industry took a hit of a 75.5 percent decrease.

The numbers are just as bleak when we look at the major real estate tech markets — NYC, San Francisco, Chicago, Toronto and London — collectively. 53 startups were launched in 2014-2015 followed by the launch of 16 during 2015-2016. The result was a 70 percent decrease in newborn real estate tech startups.

The location, location, location mantra doesn’t seem to apply here either.

Some of the largest tech hubs of the world can’t seem to shake this crippling trend either. In New York, the creation of just eight real estate tech startups in 2015-2016 has the city at a loss by almost 60 percent. London, even worse, took a 90 percent hit during the same period.

Now that the results are in, we must ask ourselves: why? Has real estate tech adoption slowed down or is it already over-saturated, showing signs of a maturing market? Is the changing funding environment to blame? And finally, what are the implications within the real estate industry?

 

New Real Estate Tech Startups (City)

 

It’s important to note that the real estate industry isn’t the only one to have been bitten by this abating bug. The Wall Street Journal reported that T. Rowe Price has devalued most of its investments in private technology companies like AirBnB, Uber and Dropbox Inc. Of the 17 tech companies T. Rowe has invested in, seven are now below purchase price.

Other firms, like Fidelity Investments and BlackRock Inc., that have invested billions into tech startups, confidently awaiting the big payoff, have also been marking down their stakes.

Regardless, the implications could be huge for the real estate industry.  Startups are disproportionately responsible for the innovation that drives productivity and overall growth in the real estate industry.  Considered as the real estate industry’s “R&D,” real estate tech startups account for new job creation as well as innovation.

 

New Real Estate Tech Startups (Global)

 

Overall, the underlying issue is job creation and churn. While entrepreneurship in the real estate industry is not for the faint of heart, in today’s dynamic economy, businesses are born, grow, and die.

If there is a disproportionate decrease in growth companies in the real estate industry, then labor and capital remain frozen in legacy real estate businesses. If the real estate ecosystem is not refreshed, innovation stalls, and growth slows

WeWork's Impact on Property Value

WeWork, the world's largest coworking space founded in New York in 2010, now has a valuation of over $16 billion dollars. Their recent valuation is comparable to the market values of Vornado and Boston Properties. 

With data from Falkon, RE:Tech recently ran a sample study on the benefits of coworking operators like WeWork and their impact property valuation.

 
 
  • Since lease commencement, WeWork has increased property value by 25.4%.
  • 1 Little West Street increased in value by 123% one year after WeWork began operations.
  • Average Property Valuation: $16.8M
  • Average Percentage Appreciation: 25.4%
  • WeWork Valuation: $16B
  • Total Equity Funding: $1.43B
 
 

Technology's Impact on Real Estate Sales and Brokerage

The Future of Real Estate Brokerage

Technology is completely reshaping the real estate industry, especially the sales and leasing experience.  It's also redefining real estate brokerage firms and organizations as they strive to increase sales and leasing activities by delivering a more engaged and personal experience, whenever and wherever the customers needs it, fulfilling the omni-channel promise of on-demand real estate, creating the next generation of real estate brokerage.

There is no shortage of technology platforms and tools made available to assist sales and leasing real estate professionals.  Today, a real estate professionals day - to - day performance and a large majority of activities are supported by tools across the entire sales process.  However, key metrics from RE:Tech Insight show that the performance of sales and leasing real estate professionals has not increased.  Despite broad investment into enterprise sales tools, technology, and automation, by real estate companies, all indications are that the return on investment from those tools is falling short.  While sales training is vital to a real estate professionals success, it has been disputed that digital and technological products may be underperforming.

This fundamental disconnect in objectives impacts many aspects of a real estate professionals operations, from goal setting and performance expectations, to day to day operations and use of technology tools. 

Are Tech Startups Overpaying for Office Space?

 

In recent years, the tech-startup sector has made a profound impact on revitalizing NYC's economy.  From creating thousands of new jobs to inspiring new neighborhoods and communities, the tech sectors economic impact has been targeted as the cause of dramatic upticks in both real estate prices and rents in NYC.

Fueled by venture capital growth and it's preference on calling Midtown South it's headquarters, some of New York's tech-startups may be on the verge of being priced out of a neighborhood they helped renovate.

According to a recent RE:Tech › Insight study, 65 percent of New York based startups believe they are over paying for office space.  The study focused on startups that are renting between 5,000 to 10,000 square feet and located in Midtown South, the epicenter of NYC's startup scene.  

 

Q: Is the Price of Office Space Expensive in NYC?

 

Additionally, nearly 70 percent of survey respondents that have office space between 5,000 to 10,000 square feet stated that they pay over $50 per square foot for office space, a minimum expense ranging from $3,000,000 to $6,000,000 per year.  

"For us, when our lease expires next year we're going to consider sharing space or taking space somewhere else to help manage our real estate expenses," according to a survey respondent in Union Square.   

As demand for Midtown South office space continues to remain healthy, asking rents seem to be remaining bullish.  "It's the price you pay in order to compete," according to a survey respondent in SoHo.  "Between the 6 month security deposit and high price tag for office space, real estate expenses are eating at our operating expenses." 

 

Q: How Much Do You Pay for Office Space?

 

 

According to the study, nearly 90 percent of survey respondents signed their current lease with employee growth in mind.  "The reality is that if you want to have the best and brightest minds working at our company, you're going to have to be here because employees want to be here," according to a survey respondent in Flatiron.

Failure opens opportunity for Real Estate Tech Startups

The failure culture of startups is killing innovation.  While the perceived risk of failure has been reduced with the accessibility of research and insight, the reality is that 8 out of 10 startups will fail.  However, when one company fails the door of opportunity opens for competitors, regardless of their innovation or competitiveness.   

In the competitive world of retail real estate, Storefront, a San Francisco based real estate tech startup, helped retailers 'beta test' a new retail concept before signing a long term lease.  However after receiving $8.9 million in venture capital funding in 2 rounds of funding from 17 investors, on March 18, 2016, Storefront shut down its pop-up retail platform

Founded in 2012, Storefront was amongst the second wave of real estate tech startups that ushered in a new era of real estate innovation.  However, with their sudden failure, Storefront has opened the door of opportunity for startups like MiLES and UK based startups We Are Pop Up and Appear Here to improve upon market share.  

While there still isn't a clear leader in the commercial real estate tech (cretech) - retail sector, the reality is that the herd is thinning.  And as real estate professionals begin to decide winners and losers, the luster of real estate tech is beginning to wear off as brokers, agents, and real estate investors focus their attention on profitability and "real" innovation rather than hype.

Bridging Commercial Real Estate's Gender Gap with Technology

The gender gap in commercial real estate has been a well documented fact in workplace equality and opportunity.  However, a new RE:Tech › Insight research is proving that digital fluency—the extent to which both men and women have embraced digital technologies to achieve a competitive advantage—is helping to close this gender gap and level the playing field for women in the workplace.

Emerging technology, such as apps, wearables, and innovative software has created new opportunities for women in commercial real estate. And the future looks promising as millennials mature and move into the ranks of leadership at work.

"In the past women were hesitant to help other women in the industry simply because opportunities were limited," according to a female commercial real estate broker in NYC.  However as technology continues to bridge the gender divide, "women have become more vocal about creating opportunities for everyone, especially for other women."  

 

Digital Fluency - Men vs Women

Women are 5X more like to use new technology than men
 

According to the RE:Tech › Insight study, women in commercial real estate were 5X more likely to use or experiment with early stage technology than men.  "Apps and mobile technology are creating opportunities and allowing leading female brokers to be more agile and gain new business," according to a female commercial real estate broker in NYC.  In terms of marketing and outreach, women were 10X more active on social media than men.  

Collectively,  the ratio of men to women working in commercial real estate brokerage in NYC was 7:3.  

 

Research: Qualitative Study - Sample of 200 NYC Agents/Brokers.

How Your Brands Relevance Wins Business in Real Estate

Branding is one of the most important aspects of any real estate business.  From leasing office space and retail to investment sales and residential, an effective brand strategy gives you a competitive edge in increasing market share and relevance amongst your target audience. But how can branding impact your real estate business?

Simply put, your brand is a reflection of your clients, customers and employees.  Branding has an impact on the decision making process. While your real estate brand represents you and your promise to your clients, customers and employees, it tells the outside world what they can expect from your services, and it differentiates you from your competitors'. 

 
 

In an independent RE:Tech › Survey Study* of 100 early stage tech startups, 90 percent of survey respondents, believed at first glance, a real estate brokerage firms brand impacts their decision making process of which firm they'll hire to lease office space. With a qualitative focus on brand "values" and "relevance", today's emerging companies seem to care more about who they work with rather than simply leasing space.  The remaining 10 percent of survey respondents stated that experience and referrals/word of mouth are important.

According to a survey respondent, "The best communications we've received from a real estate company came from companies knowing who they are."  

 
 

 

5 Things Your Real Estate Brand Should Be Saying About Your Business:

  1. I am a professional and I take my business seriously.
  2. I know who I am and what my brand represents.
  3. I understand my audience.
  4. I am current.
  5. I am unique.

 

The RE:Tech Brand Survey was conducted between November 2, 2015 and February 1, 2016. 

*RE:Tech Survey Respondents

  • Markets:  NYC, San Francisco, Chicago
  • Respondents: Founder(s), CEO, CMO, and/or CFO
  • Company Size: 5 - 30 employees
  • Year of Operation: 1 - 5 years
  • Financing: VC Backed and/or Profitable

 

The iPhone is the Most Popular Mobile Device by 63 Percent Amongst Real Estate Professionals

Approximately 63 percent of U.S. real estate professionals who work for real estate brokerages said they use their iPhone for work related purposes, according to a recent cobranded study by RE:Tech and The News Funnel. The study, which was conducted between November and December 2015, surveyed more than 1,000 U.S. real estate professionals about their technology usage and attitudes in order to gain a better understanding of how devices are used for work.

According to the snapshot market study, the iPhone was the preferred mobile device amongst real estate professionals. Overall, iOS devices, including iPhones, iPads, and MacBooks were the most popular mobile devices, representing 76 percent.

The most popular personally owned device used for work was the iPhone, followed by the iPad at 10 percent, MacBook at 3.3 percent and Samsung Galaxy at 2.3 percent. Other responses included a multitude of other devices including HTC One M7 and M8, Microsoft Surface, Motorola XT1097, and other devices representing 21 percent.

Emerging Trends: When asked how real estate professionals use their devices at work and play consumers provided some interesting answers, particularly for smartphones. Respondents listed impromptu prospecting as the number one way they used their smartphones, followed by social media and checking news.

Bring Your Own Device (BYOD): According to the study, devices that were once bought exclusively for personal use have become increasingly popular for work. The popularity of work and play devices has gained favor for many working professionals, making Bring Your Own Device (BYOD) a growing trend in the real estate industry, especially amongst millennials.

Work From Anywhere via Mobile Apps: Smartphone owners ages 25 to 40, 55 percent use apps to conduct work related activities. The ability to conduct work from anywhere was a common theme amongst millennial real estate professionals, a trend that has been echoed throughout other industries. 

Annual Report - Global Trends in Venture Capital Investments in Real Estate Tech

VC Funding in Real Estate Tech Startups › 2013 - 2015

Total equity investments into venture-backed real estate tech startups.

Venture capitalists invested $1.42 billion in 148 deals in 2015. Total venture dollars deployed to real estate tech startup companies for the year decreased 2.5 percent and total deal count was down 16.5 percent compared to 2014 when $1.45 billion was invested in 176 deals. The third quarter marked the second highest funding round since the third quarter of 2014 with $570 million of venture capital invested in a single quarter.

The $220 million and $279 million investment in the first and fourth quarter of 2015 were the second and third lowest funding rounds since the first quarter of 2014. The annual total average venture amount peaked at $7.1 million, a 7.8 percent decrease since 2014 with $7.7 million, and 91.9 percent increase since 2013 with $3.7 million.

The second half of 2015 out performed the midyear average venture amount by 27 percent, a delta of $1.8 million. Despite the fourth quarters dramatic venture funding decline, the third and fourth quarter average funding amount peaked at $7.97 million. 

 
 

In the full RE:Tech VC Investment Report, we analyze a full range of venture activity in real estate tech, including: 

VC Funding in Real Estate Tech

› Total Funding in Real Estate Tech

› Total Deals in Real Estate Tech

Real Estate Tech Deals: Sector

› Total Deals in Residential and CRE Tech

› Total Investments in Residential and CRE Tech

Real Estate Tech Mergers & Acquisitions

› Real Estate Tech M&A by Number of Deals

› Itemized list of Real Estate Tech M&A

Real Estate Tech Deals: Region

Future Outlook of VC Funding in Real Estate Tech


Consumer Confidence in Real Estate Tech Increased by 7.25 Percent

The RE:Tech Consumer Confidence Index (RETCI) is an indicator designed to measure consumer confidence, which is defined as the degree of optimism on the state of the real estate technology economy that real estate professionals (consumer) are expressing through their activities.

The Average RETCI increased by nearly 7.25 percent in 2015 on a seasonally adjusted basis and overall real estate consumer sentiment from real estate professionals. According to the Real Estate Average Power Trend Index (REAPTI), since May 2014, the index decreased by nearly 11.8 percent. The Average RETCI is expected to moderately decrease by nearly 7 percent to nearly 70 percent in Q1 2016 according to the RE:Tech Futures RETCI Index.

The indexes for residential real estate demonstrated erratic movement since May 2014, while commercial real estate remained more moderate. The commercial real estate index, which overall remained stable in 2015, overall decreased by nearly 13 percent since May 2014.

Residential real estate’s assessment of current conditions was less positive when compared to commercial real estate. residential real estate professionals saying real estate technology business conditions are “good” decreased by nearly 12.5 percent since May 2014. However, during the same time period, commercial real estate assessment decreased by nearly 11 percent, expressing lack of “actionable innovation.”

 
 

Consumers’ optimism about the future short-term outlook declined moderately. The percentage of residential real estate professionals expecting business conditions to improve over the next 3 months decreased by 7.14 percent to nearly 65 percent, according to the Residential Power Trend Index (RPTI). During the same time, commercial real estate professionals expecting business conditions to improve remains moderately balanced at nearly 80 percent, with no significant movement, according to the Commercial Power Trend Index (CPTI).