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New technologies have disrupted industry after industry. Entertainment, with iTunes, Netflix, Spotify. Financial services, with the fintech boom. Now it’s commercial real estate’s turn. A new set of technology-based real estate startups are tackling everything from asset management to tenant engagement. The movement has even spawned its own buzzword: PropTech. In 2017, VCs invested $3.4 billion in real estate–related tech companies, compared to $2.6 billion the year prior, according to a 2018 real estate trends report from PwC.

“We track a lot of the PropTech and are constantly evaluating potential use within our business,” said Kristy Heuberger ’99, the US head of asset management at LaSalle Investment Management, the investment management division of Jones Lang LaSalle. “Over the past few years there’s been a huge tidal wave of capital into the space.”

Heuberger spoke recently at Gleacher Center during an event called The Impact of Real Estate PropTech. Organized by the Booth Real Estate Club, the event promoted The Goldie Initiative, a scholarship and leadership program for women with graduate degrees entering commercial real estate.

Heuberger joined Momei Qu, vice president at PSP Growth, the venture arm of PSP Partners, to discuss the growing startup scene in commercial real estate and share advice for PropTech founders.

Here are four takeaways from the conversation.

PropTech is moving beyond the management side

Many startup companies are looking at ways to tackle construction costs, make leasing more efficient, ramp up tenant engagement, and sharpen data analytics within the real estate space. “A few years ago, PropTech was more focused on the management side and trying to move away from Excel spreadsheets, which we hold on to for dear life,” Heuberger said. “In the past 18 months there’s been a huge shift and new startups.”

Institutional investors are eager to take advantage of their data

Today’s demands mean that real estate companies in the commercial space are looking to do more with the numbers they already generate. “A few years ago it was definitely about the tools, but that has significantly changed at the management level,” Heuberger told the audience. “Data is an asset, and real estate has an enormous amount of data but the industry hasn’t been using it in a dynamic, integrated way.”

Qu at PSP Growth agrees. Data analytics is a space PSP is continuing to research; one of PSP’s current investments is the data analytics startup HouseCanary. “Data is enabling decisions to be made much more efficiently,” Qu said.

Providing key metrics and initiating the pilot phase are critical

Finding the most powerful PropTech solutions requires a hands-on approach, said Heuberger. “We pilot all PropTech tools we are interested in—whether it’s a management tool or something at the asset level,” she said. “Until you start getting into the next level [with the tool] and implementing it at a property, you don’t know how it’s going to operate and add value.” In that spirit, LaSalle Investment Management is rolling out Honest Buildings, a capital-tracking tool that the company piloted last year.

Sharing metrics makes a huge difference when it comes to finding investors. “It’s not our job to know why your tech is good—anything you can measure and track goes a long way,” Qu said.

There’s never been a better time to enter the space

Because many Booth students are digital natives, Heuberger thinks they may have a leg up when it comes to entering the real estate industry with a focus on technology and startups. But understanding what’s already out there and differentiating your offering are critical, she notes. “When building a startup, you need to be educated about how PropTech is changing our industry.”


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