more efficient and effective. This allows distributed teams to communicate policies such as safety-related information, policies andbuilding cleaning updates to buildings and tenants.
When evaluating PropTech opportunities, Schwarzman sayslandlords look at technology to serve immediate needs but also forcertain requirements. These must-haves are based on usability,space scheduling and workflow staggering for use in tenant-facingcapabilities or tenant engagement apps.
Another platform gained significant ground during the initialphase of the pandemic. Although virtual tours have been aroundfor some time via 3D/virtual reality and augmented reality, thistechnology hasn’t been the norm in viewing space, especially forbig-ticket leases, until the pandemic struck, says Sullivan. Elsa BenShimon, partner of New York City’s Stroock, agrees that innovations such as virtual tours and other technology are becomingincreasingly used to address challenges presented by social distancing requirements.
“These tech-enabled platforms became an important topic due
to COVID,” said Ben Shimon. “We realized how virtual site visits and
tours were being used because of social distancing. Other examples
were innovative solutions to replace traditional cash deposits.
Companies such as Obligo provide much-needed cash relief to ten-
ants by rendering cash deposits and paper checks obsolete.”
Perhaps a silver lining in the cloud was that the old ways of doing
business were highly scrutinized during the initial onset of the pan-
demic. And, what popped out the other side were new ways of look-
ing at the old methods in the real estate industry.
“There are a lot of tools in the operation of real estate. There are
areas such as surveying, appraisals and insurance inspections but not
a lot of modern software for these tasks,” Schwarzman says. “As a
result, real estate firms as consumers of this tech have begun to build
their muscle in a fairly sophisticated way in a short of time around
how we interface with, inject and implement these technologies in
organizations; to a degree, scale them out. That is a real advantage
and not easy to do particularly when you are starting from scratch,
but it is good that folks have been engaged in this and have done it
well to meet the (COVID) moment.”
While the full impact on the emerging market ecosystem is yet
to be seen, a more robust foundation for the start-up landscape is
expected to emerge on the other side of the crisis. The bottom line
in all of the discussion surrounding PropTech’s role during and
after the COVID crisis is there is no one-size-fits-all approach for
the needs in all property sectors. As such, Bain Capital Ventures is
using a wide lens to evaluate all opportunities for all spaces.
“We are looking closely at technology that will shape all commer-
cial and industrial spaces,” Xu says. “Just as hospitals are looking for
safer processes, so will restaurants, retailers, manufacturers and
more. Some solutions may be as simple as adding more touchless
building features, i.e., doors, light switches, etc., while other solu-
tions may require adjustments to building operations like tighter
access control and occupant monitoring.”
And, where VCs and their portfolio clients leveraged greater
cooperation during the pandemic, it may be logical to see a legacy
remain in the form of wider engagement going forward, says
Oxford Business Group. While specific projections for start-up
financing vary by market and analyst, there is a consensus that
those businesses and services which fulfill specific needs during
stay at home measures are likely to remain safer options.
When the pandemic pandemonium is all said and done, someof these Prop Tech solutions will have stuck and some will no longerbe needed. However, the Prop Tech sector will endure due to several key points, says Dror Polgeg, author of Rethinking Real Estate,and co-chair of ULI’s Tech and Innovation Council in New York.
Technology investments have now eclipsed the high watermarkset during the dot-com boom in 2000, but there is a demonstrabledifference in at least one meaningful way. While the dot-com era wasall about the online world, this time around, it’s physical.
As of mid-2019, seven of the world’s top 10 technology unicorns,venture-backed private companies with a valuation of more than $1billion, were competing in offline industries with hard assets andcomplex regulation. This list included We Work and Airbnb in realestate, JUUL Labs in nicotine, SpaceX in space exploration, andGrab and DoorDash in logistics and transportation. Uber and Lyft,two other companies from this category, graduated from the unicorn club upon going public earlier in 2019.
“Unlike their dot-com predecessors, today’s unicorns are notoperating in a virtual Wild West, where the laws of gravity don’tapply and the laws of government have not yet been written,” saysIn fact, in recent years, the biggest names in venture capital haveshown a growing appetite for property-related ventures. SequoiaCapital, Andreessen Horowitz, Greylock Partners and KhoslaVentures have all made multiple investments in the space. Today’sinvestor pool includes Fifth Wall, MetaProp, Bain Capital Venturesand JLL Spark, which have all clearly made strides in the COVIDenvironment.
As a result, the public is reaping those user benefits withrespect to touchless entry, social distancing tools, telework communication software, smart HVAC systems and numerous otherPropTech advances that came out of the healthcare crisis andaccompanying economic downturn. Those disrupters took onperhaps the largest disruption in history and made the industryslightly better for it. ◆
“PROPTECH COMPANIES ARE IN A UNIQUEPOSITION TO HELP SHAPE THE NEWNORMAL OF OUR POST-COVID WORLD.”
INVESTOR AT BAIN CAPITAL VENTURES