Then and Now: Future Beholds A Lot For CRE Brokers in Technology
The making of PropTech began in the mid-1980s, marked by the founding of companies that provided software for the commercial real estate industry like Autodesk and NCREIF in 1982, Yardi in 1984 and CoStar in 1987. However, the advancement and adoption of technology started in the mid-2000’s. Gradually, the CRE tech industry has started being a part and parcel of the traditional CRE practices. According to MetaProp co-founder and MD Aaron Block, 86% of startups surveyed around the world believed that the CRE Techspace is going to be more competitive in 2018 meaning more new technologists who have a real estate background will be coming to solve real estate problems. That’s up from 76% in Q2 and 63% year-over-year.
Before blatantly jumping into using just any technology for mortgage brokers, we need to understand why the advancement of technology and adoption is necessary for the brokers. Residential real estate brokers have a single property mindset and have accepted the technology as a figurative partner. However, the commercial real estate domain has still not been able to adapt to the technology advancements. That might come as a surprise, especially since the industry is valued at $12.6 trillion.
The tedious time-consuming task that brokers use their resources for is getting minimized day-by-day with technology coming into the picture. While technology is making collecting rent comps and financial modeling more efficient and less time-consuming, brokers will always be needed for their industry knowledge and advisory skills. The advancement in tech will not eliminate the need for brokers as most traditionalists fear, rather it would help them in streamlining their processes and increase efficiency.
As the opportunities in commercial real estate technology are growing, more and more startups are emerging in this area. Some accelerators are investing in new business ideas related to the field; two examples of these are REach and MetaProp NYC. In segments like ‘Listing and Search Services’, ‘Leasing Management Softwares’, ‘Data, Valuation, & Analytics’, etc; ample tech-enabled startups are emerging and are being funded adequately to advance the technology sector in CRE. Startups like Honest Buildings, 42Floors, CREXi, Hightower and many more, are revolutionizing the technology domain.
The need to embrace tech is now more than ever. While the sheer size of the marketplace is important, other factors should weigh in as well. Integration of technology like CRM, extraction tools for financial statements, can save hundreds of hours of work for a busy broker. Technology is already beginning to replace the documentation component, providing brokers with added time to focus on the more ‘big picture’ elements of their job.
Clik Technologies Inc has launched Clik.ai – a machine learning based commercial real estate loan underwriting platform that uses artificial intelligence to create free of error and highly accurate Excel-based loan sizing models within minutes, assisting brokers to focus on the larger aspects of their business.
Needless to say, tech will finally emerge as the great differentiator in CRE , especially for brokers. As commercial real estate tech continues to advance and new solutions hit the market which helps in making commercial deals more efficient, the trend of brokerages investing in property tech will continue.