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A Guide to Proptech Companies for Commercial Real Estate
The rise of proptech companies around the world is causing a massive shift in the commercial real estate (CRE) industry towards more tech-enabled buildings and work offerings.
According to Deloitte’s 2021 commercial real estate outlook, “Companies can significantly increase tenant engagement by optimizing real-time updates about facilities and developing a sense of community using mobile apps. About one-half (48%) of respondents who said their company is using digital technologies, such as interactive mobile apps, to increase communication with tenants or end users, plan to increase investment on digital channels over the next year. Cloud technology could be the backbone for many new capabilities as it offers scalability, data storage, and ubiquitous access. For instance, companies can leverage cloud-based tools for digital marketing and to connect virtually with tenants to build a digital tenant experience.
To expedite implementation of a digital transformation road map, CRE companies should look for strategic partnerships with technology providers or proptechs. REIT respondents seem to acknowledge this and are being more open to collaborating with proptechs. On an average, 58% of REIT respondents have increased their intent to partner, compared to 45% of respondents who are developers.”
So, what exactly is proptech, and how can CRE leaders and teams leverage them to achieve success in the market?
What Are Proptech Companies?
The term “proptech” has only recently become a buzzword for CRE within the last few years. Just as “fintech” is short for the combination of finance and technology, the proptech meaning combines properties with technology. This niche market pushes CRE portfolios towards collaborating with real estate tech companies — ultimately pushing for more efficient building and workplace systems, which are rooted in new technological advancements that can combine the physical and digital worlds. Additionally, commercial real estate tech companies can help offices align with the modern tech-enabled habits of their main consumers: tenants.
According to Common.com, a more in-depth definition of proptech is as follows: “Proptech is an innovative approach to real estate in which technology optimizes the way people research, rent, buy, sell, and manage a property. The cross-industry technology benefits all parties involved – developers, investors, and property management companies – making it a recent buzzword in commercial real estate. PropTech real estate startups are all those that are attempting to make the real estate industry (especially in highly dense cities) better, more efficient, and easier to navigate for all parties involved. It’s no wonder that New York is a leader in this up-and-coming industry with so many real estate concerns, such as the lack of affordability and of housing units.The rise of this industry considers the need for a technological and mental change required of the real estate sector to address the inconveniences of its consumers.”
Proptech Startups: Organizations You Should Know
With so many property startups and technologies available in the market — over 8,000, to be exact — technology partners and developers might wonder how they can get their own start in such a saturated landscape. Fortunately proptech investors have already seen the massive value in such advancements, and have even helped to create several notable proptech associations that can assist early-stage proptech companies and all their needs. Four notable organizations are as follows:
- Colliers Proptech Accelerator, powered by Techstars, is an industry-first global program in real estate that combines Techstars’ expertise in tech innovation and building accelerators with Colliers’ enterprising culture, real estate expertise, and global network.
- PropTech Acquisition Corporation is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses focused on real estate technology.
- MetaProp is a New York-based venture capital firm focused on the real estate technology (“PropTech”) industry. Founded in 2015, MetaProp’s investment team has invested in 100+ technology companies across the real estate value chain. (Disclosure: MetaProp is an investor in HqO)
- Navitas Capital is a venture capital firm focused on transformative technology and innovation in the real estate and construction industries. A trusted and tenured team that brings clarity, insight, and transformative opportunities to our portfolio companies and investors. (Disclosure: Navitas Capital is an investor in HqO)
- Pi Labs is the first and most active proptech accelerator in London with a global reach. Pi Labs was founded to become the center of the property innovation ecosystem with the vision to identify, and mentor proptech start-ups. Its in-house property expertise assists entrepreneurs in the rapid scaling of tomorrow’s tech-enabled property technologies.
The Most Innovative Real Estate Companies Around the World
HqO’s growing Marketplace of best-in-class technology partners aggregates numerous property tech companies for any office building — a global proptech list that includes proptech from the United States to proptech London. Through our operating system, landlords and property teams can activate these partners and features to meet any building’s needs. HqOS™ proptech examples fall under the following categories:
- Access Control: Security is among the most notable smart building IoT solutions. Through access control capabilities, owners can enable tenants to gain access to their office buildings with just the tap of a phone.
- Emergency Communications: Another critical smart building solution is the ability to communicate critical safety information to building occupants in a quick and efficient manner.
- Order Ahead: A smart-enabled technology platform can increase safety and convenience for your tenants, such as integrating with local retailers to allow them to place orders ahead and reduce friction.
- Resource Booking: Smart building technologies have also made resource booking even more seamless. Smart building sensors coordinate with your existing software to assist in more efficient room booking management, from conference rooms to event spaces and everything in between, making organizing your day a seamless process.
- Service Booking: Technologies used in smart buildings can also be utilized to activate your building amenities. Tenants can take advantage of easy-to-book services, fitness classes, and more.
- Service Requests: Since smart buildings enhance a building’s efficiencies, the building and maintenance staff still plays an essential role. Enter service request solutions, where tenants can communicate with building managers for work orders, cleaning services, and more.
- Shuttle Tracking: Shuttle tracking technologies can help you understand your tenants’ commuting behaviors and determine the best-fit transit solutions for any property.
- Ticketing: Smart ticketing can help grant tenants access to key property experiences and partner services with scannable visuals. The process is quick, convenient, and contactless.
- Visitor Registration: Contactless visitor registration can also be easily integrated into a building through a smart building system. Speed up the visitor registration process while also ensuring modern safety and security protocols are met.
The Latest in Proptech News
Current-day proptech statistics and proptech stocks show promising futures for both commercial real estate teams and new proptech companies due to the advancement of technology. According to a recent Forbes article covering upcoming technology trends for the commercial real estate market, the proptech industry has grown by 1072% from 2015 to 2019. In 2018 alone, venture capital firms invested $8.3 billion in proptech companies around the world.
Jim Berry, Vice Chairman and U.S. real estate leader at Deloitte, explains the continued rise of proptech even after the COVID-19 pandemic: “While the pandemic was an eye-opener, we see it as an accelerant of existing trends. It is telling that 56% of CRE respondents to our 2021 CRE Outlook survey said that the pandemic exposed shortcomings in their organizations’ digital capabilities. Only 40% of respondents said their company has a defined digital transformation roadmap.”
More specifically, according to John D’Angelo, U.S. real estate leader at Deloitte Consulting, the future of proptech resides in four key trends: the rise of digital twins, direct digital engagement, data and analytics, and robotic process automation. We can break these down as follows:
- Rise of digital twins: By capturing and using data about physical buildings, supplemented by Internet of Things (IoT) data about building operations, the CRE industry can create efficiency in building operations, improve end-user experiences, and preemptively address issues across portfolios.
- Direct digital engagement: Technology can create direct lines of communications with tenants, as well as touchless experiences that promote modern safety and health regulations.
- Data and analytics: Data-driven decision making will continue to evolve as CRE companies also evolve. D’Angelo states that when trying to understand changing CRE patterns and opportunities, “Trying to do this by instinct or gut simply doesn’t work effectively in this environment.”
- Robotic process automation: Robotics process automation allows individuals to configure computer software that emulates and integrates the actions of a human interacting within digital systems to execute a business process. “Robotic process automation (RP) is an example of the slow automation adoption in CRE. As we see CRE companies work to improve operational efficiency and reduce costs, RPA will play a role in overall digital transformation efforts,” said D’Angelo.
The integration of proptech platforms will either make or break commercial real estate portfolios as offices adjust to the digitization of the industry. As Berry aptly points out: “Ultimately, a CRE company’s competitiveness in the [future] world could hinge significantly on the extent to which their people can succeed in a digital work environment.”
As the number of proptech companies in the market continues to grow, and proptech news continues to revolve around creating digital-to-physical experiences for the workplace, CRE owners and property teams will need to discern the right technology partners for their assets — as well as connect otherwise disparate building systems through a singular location. Fortunately, the HqOS™ end-to-end operating system provides CRE owners with a leap in the right direction. The three layers of HqOS — which include our Marketplace, Tenant Experience Platform, and the Digital Grid™ — work seamlessly together to produce compounding positive results for any portfolio.
Our growing Marketplace of best-in-class technology partners — which can be accessed through the Tenant Experience Platform — enables landlords to activate more of their building features, while simultaneously providing tenants with a better experience and property managers with a higher volume of rich data. The Digital Grid then takes these activations a step further, serving as a connected and streamlined analytics offering that can collect tenant behavior, amenities, technologies, and building data all in a single location. By centralizing and structuring data within our CRE-specific data model, it helps owners and operators uncover insights, take action to differentiate their assets, and make intelligent decisions across their portfolio.
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