36 GLOBEST. REAL ESTATE FORUM JANUARY/FEBRUARY 2020 www.globest.com/realestateforum
BANNER TECH INVESTMENT
In 2019, commercial real estate tech investment doubled over
the previous year, and 2020 is set for another 12 months of
record-breaking tech investment spending.
By the third quarter of 2019, there had been $25 billion
invested in the sector, says Ashkán Zandieh, chief intelligence
officer at CREtech.com, adding that the year will likely close
with $30 billion to $35 billion invested in built world technology. As for real estate tech specifically, the company is expecting $25 billion to $26 billion invested, he says.
But 2019 did not just see robust spending—to many it also
seemed to be a turning point. “From 2015 to 2018, we went
from $9 billion invested in the category to $15 billion invested
in the category. In 2019 that number nearly doubled—almost
as though the industry began ramping up tech investment
and adoption en mass.
FROM NOI TO ROI
There are reasons for this shift. One is that commercial real
estate companies are starting to look at technology differently
than they did in the past. “Today, the industry has the potential to benefit tremendously from technology, and is being
pragmatic about it,” says Zandieh. CRE technology, as well,
has become more pragmatic, offering very specific use cases
and financials. “For users of innovation in tech, everything has
to come down to NOI or ROI, so the technology has to have
some kind of financial benefit to it,” Zandieh remarks.
Consider what is happening with property management:
new companies are working to streamline operations and
create better efficiencies, which promise to have a major
impact on ROI and property value. Seattle-based Remarkably
is an emerging leader in the space. The software platform
unifies data to help owners make better decisions that will
ultimately boost multifamily portfolio performance and leasing activity. ”The benefits are multifaceted, and include
items such as accelerating stabilization of an existing property or new lease-up,” says Erina Malarkey, CEO of
Remarkably, who founded the company with Anna-Lea
Dieringer. It also works to minimize occupancy volatility
across a portfolio, drives cash flow, optimizes performance
and increases NOI, Malarkey adds.
Furthermore, these new feats are being delivered via user-friendly, intuitive interfaces that give non-tech users easy
access to the underlying data.
IIRR Management Services, one of the largest crowd-
funded real estate investment management firms, houses the
toolset on the Google cloud. We “can bring up a Google maps
dashboard of the entire country overlaid with every single
asset,” CEO Jeff Holzmann says. “The asset management team
can bring up all the data about any investment by simply click-
ing on the map. Links take you directly to the investor list,
Indeed, IMS’s very business model would not be possible
without user-friendly technology. “CRE crowdfunding enables
investors to take part in offerings that were previously blocked
off to only the richest, most well-connected people in the
country,” Holzmann says.
The catalyst to the growth of fintech and crowdfunding
technologies was the JOBS Act, which opened the door for
these companies to target a wider range of investors. “For the
first time in history, an average accredited investor can partici-
pate in a CRE investment under the same terms as the moguls.
It is the combination of legislation and technology that made
this a realistic possibility for the American public,” says
At IRM, the technology allows users secure access to infor-
mation and transactions online. “The technology involved is
very similar to what you would expect to see from a bank or an
investment firm,” says Holzmann. “A basic interface allows you
to securely log in, see your account, and transact larger multi-
At Remarkably, Malarkey continues to build out its technol-
ogy to better develop its features. “Currently we are focused
on data aggregation, visualization, insight generation, recom-
mended actions, and measured results,” she says. “This is for
multiple facets including tactical, campaign, building, and
portfolio analysis. Additionally we are moving towards predic-
INSTITUTIONAL INVESTORS DRIVE CHANGE
These savings and efficiencies haven’t been lost on institutional investors and it is they that are in large part driving the
adoption of tech in commercial real estate, according to
“If you can compress fees and expenses on the real estate
finance category by only 1% across an entire portfolio, that
can be a significant cost savings. Owners have no control over
the supply and demand side to generate returns. What they do
have control over is their expenses.”
These companies are investing in onboarding technology
and piloting within a few buildings, and they are also investing
in funds to help facilitate change, he notes.
Most of these funds are targeting a handful of specific
categories in real estate. Fintech companies are seeing the
most venture capital investment by far, according to Zandieh.
Property management and flex space are also seeing a flood
of venture capital dollars. In 2020, Zandieh expects construction technology to also take a spot at the top of the list.
“The biggest gain that we are going to see from 2019 to 2020
is most likely going to be in construction,” he says. “Funds
are now closing out construction and services within the