37th Annual Cornell Real Estate Conference – Panel Wrap Up – PropTech: The New Buzzword

On October 18, 2019, the Cornell Real Estate Council welcomed leading investors and operators in real estate technology — or “PropTech” — to the 37th annual Cornell Real Estate Conference.  The esteemed panel provided valuable insights into the exciting world of PropTech and the changing real estate environment in light of the ever-growing pervasiveness of technology in the industry.  Panelists included Brad Greiwe of Fifth Wall Ventures, Andrea Jang of JLL Spark, and Judah Siegal of Brookfield Ventures, and they were joined by moderator Zak Schwarzman of MetaProp.

Brad Greiwe is the co – founder and Managing Director of Fifth Wall Ventures, the largest venture capital firm investing in the PropTech space and having $1 billion of assets under management.  Andrea Jang is the Head of Growth for Americas for JLL Spark, a company under JLL.  It is a $100 million fund that invests in PropTech and technologies that help in improving the core business of JLL, transform the real estate industry and/or enable clients to do business better.  Judah Siegal is a Vice President at Brookfield Growth Properties.  Zac Schwarzman is a Partner at MetaProp, a venture capital firm focused on the PropTech industry investing in high growth seed-stage startups which transform the way people construct, transact, manage utilize, and interact with real property.

L-R: Zak Schwarzman, Metaprop; Judah Siegal, Brookfield Ventures; Andrea Jang, JLL Spark; Brad Greiwe, Fifth Wall Ventures

The panel began with a discussion on the panelists’ interpretation of PropTech and what the word has meant for their investment firms.  While this interpretation varied for each panelist, all of them had the same broad understanding of it: adoption of technology in the built world.  Ms. Jang noted that though real estate is one of the largest asset classes, the adoption of technology in the industry has historically been very slow.  However, this panelist is now noticing an active effort by leaders in the industry to adopt and implement technology in their businesses.  Mr. Greiwe remarked that while PropTech is still in its nascent stages, real estate industry leaders should utilize the opportunity to invest in the space and treat it as a research and development expense for their businesses.

When posed the question about the response and mindset of traditional real estate companies to technology adoption and innovation, the panelists believed that in the last 5 years, there definitely has been a positive change and willingness to adopt technology by the players in the industry.  Industry leaders have taken initiative to introduce verticals dedicated to PropTech and to hire executives with a tech background to lead these verticals.  Technology is becoming an increasingly important part of people’s lives and property managers are viewing technology from a more holistic perspective.  One panelist noted that while things are improving, there is still a long road ahead.  Change will take time and will be a slow process as most companies are still not willing to allocate capital or do not have the organizational capability to adopt and invest in technology.  Professionals who are investing in PropTech should also look at quick wins that will give returns in the short term.  This will help establish a proof of concept for the sector and will help drive the capital and support essential to the growth of the sector.

Discussion on a few case studies from the panelists’ investments gave valuable insights into the possibilities of the confluence of tech and real estate.  The case studies discussed were VTS (a leasing and asset management platform which gives real time updates to the users of the platform), Opendoor (a platform offering an instant valuation quote on a home which is arrived at using data analysis using artificial intelligence), Jones (a platform automating the certificates of insurance for vendors), and Dealpath(a collaborative platform for real estate acquisitions).  Driving synergies between portfolio companies also helps in promoting cross business and overall optimization.

The panel concluded by remarking that it is an interesting time for real estate as it is on the cusp of significant innovation and disruption.  For young people looking to begin their careers in real estate, they should focus on developing skills in data science/tech as well as real estate.  An intersection of these skills will be in great demand in the near future.  Finally, the panel also sought the collective participation of owners, operators, and managers of real estate to further tech innovation and adoption in the industry.

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