Yesterday, Jan. 26, 2017, MetaProp NYC was proud to celebrate six of the finest young entrepreneurs in PropTech at our annual East Coast Demo Day in 7 World Trade Center, Manhattan. Although tickets to the event sold out the first day offered, we squeezed in as many is as possible, but still had a waiting list of more than 180. The packed house included NYC’s top investors, startups and forward-thinking real estate executives. It was wonderful to see the entire community come together to support our ambitious and promising companies. Tal Kerret, president of Silverstein Properties, delivered the keynote. The crowd was treated to Zach Aaron’s PropTech prophecies, including blockchain deals and 3D printing on the moon in 2017. MetaProp NYC’s new Fund Manager, Zak Schwarzman, gave an overview of the PropTech market, followed by Co-Founder and Managing Director Aaron Block’s summary of MetaProp NYC’s work and mission. The MetaProp NYC 2016-2017 class of Bowery, Enertiv, Flip, hOM, onTarget, and Ravti stole the show, unveiling exciting projects and an optimistic future for real estate technology. Overall, the day was a huge success.
We've said it before and we'll say it again - mentors make the MetaProp NYC community. This year, we wanted to honor a mentor that has gone above and beyond the call of duty to helping guide the 2016-17 accelerator startups. The three finalists for the 2016-17 Accelerator Mentor of the Year (MOY) are:
As an executive of a leading construction management firm, Structure Tone’s Donaghy was matched with OnTarget, the visual project management and analytics for construction, with powerful 3D rendering startup. Along with Donaghy’s general advice and introductions within Structure Tone, he helped onTarget streamline its software to focus on the right market and customers, creating a list of features that were instrumental in selling the startup to many other companies.
Goldenberg, who co-founded SiteCompli, the leading compliance solution for owners and property managers, was matched with Bowery, the tech-enabled commercial appraisal firm. He was recognized for his great enthusiasm in devoting many hours to brainstorming with the founders on subjects that included marketing Bowery’s product; banking issues, and how to deal with appraisal firms who inquire about SaaS or acquisition.
Maio mentored the founders of hOM, the tech-enabled amenity management that partners with landlords to deliver fitness classes and crowd-sourced events to under-utilized spaces. Along with helping hOM re-formulate its contract to be more applicable to the industry, Maio helped the startup’s founders with the emotional intelligence required to efficiently grow its business.
We will be announcing the Mentor of the Year on Thursday, Jan 26, 2017, at MetaProp NYC's East Coast Demo Day, 9:00 a.m. to 12:00 p.m. at 7 World Trade Center, Manhattan.
Hey CRE executives...
You may have brushed off the media frenzy around OpenDoor's December round (PropTech's "largest funding round ever") and $1b+ valuation. Your ears may have perked up after the announcement of the PropTech mega-merger of the two broker-centric firms VTS and Hightower in late November. In 2017, my partner Zach Aarons says that PropTech startups are going to merge at a rapid clip and large incumbent technology companies are going become more acquisitive to protect their moats. However, as our good friend and frequent co-investor Hunter Walk so eloquently put it, in 2017, GE Will Buy More Tech Startups Than Google. The phenomenon of both aggressive and defensive acquisition won't be relegated solely to "technology" companies within real estate.
Attention C&W, Colliers, NGKF, Savills Studley, Avison Young, HFF, Marcus & Millichap, Transwestern, Cresa et. al... You MUST pay attention and carefully consider your next move.
Yesterday, CBRE announced the acquisition of Floored. This is not CBRE's first PropTech acquisition nor is it the first for a large CRE brokerage firm. In fact, PropTech observers were impressed with JLL's purchase of Corrigo just over a year ago.
This Floored acquisition is different. This is cutting edge, VR technology. This is a business with major customers and a fabulous team. This is also a move by a new "CDO" executive at a major multinational. Most importantly, this is likely a multi-year lock-up of one of the most talented, bright and connected PropTech minds in the world. Floored's CEO Dave Eisenberg is not just an entrepreneur and CEO. He's a sharp seed stage venture capitalist who has made investments in PropTech companies like Hightower and Dynasty. He knows the cutting edge tech space inside and out like few others. He knows PropTech better than almost anyone. Most importantly, he's one of the most connected guys in NYC - the center of the global PropTech movement.
Thanks to Dave, CBRE has a legitimate chance to corner the market for the best new real estate technologies. This will positively affect CBRE's own business practices, their clients' businesses, and ultimately, their investors.
It seems that CBRE acknowledges that the unicorns may eat the dinosaurs!
Recently, it seems that American politics have become more divisive than canned vs homemade cranberry sauce. However, I believe that politics don't have to trump your turkey day. Save that mouthful for grandma's stuffing and instead talk about some of the incredible technologies that are changing the real estate space.
The real estate and construction industry has been taken to new heights with the recent explosion in drone technology. These eyes in the sky can be used in sales, marketing, construction, surveying, and inspecting properties. However, the recent spike in drone popularity has also raised privacy and safety concerns. The FAA recently passed new regulations regarding drone usage, however it's unclear if regulations will be able to keep up with this rapidly developing industry.
2. Virtual Reality & Augmented Reality
Recently, VR and AR have been some of the most talked about technologies in the real estate space. A recent study by Goldman Sachs Research predicts that VR and AR will become an $80 billion market by 2025, with real estate alone taking $2.6 billion. However, the value of VR and AR goes far beyond real estate showings. VR and AR have given construction companies a cost effective way to show clients changes to a building's design before construction begins. In addition, architecture firms are using VR and AR to conceptualize spaces in a way 2D drawings can't, even bringing environmental elements such as humidity and lighting into the design process.
3. Artificial Intelligence
As we discussed in a recent article, AI has, and will continue to, revolutionize the role of the real estate broker. Beyond this, AI will also bring our buildings to life with data enabled machine learning. Smart buildings will come to anticipate and react to tenants needs, making for more flexible and energy efficient spaces. As our cities swell, AI will allow architects and urban planners to design buildings that utilize space in the most effective and efficient way possible. Eventually, AI will bring self awareness to cities, allowing them to evolve with the changing needs of their populations.
4. 3D Printing
Finally, 3D printing is, and will continue to, create new opportunities in construction and building design. As 3D printing technology becomes more advanced, incredible buildings are being constructed with little to no human interaction. 3D printing has allowed designers to utilize previously unheard of building materials to create complex structures that are both visually stimulating and environmentally friendly. We haven't even tapped the potential behind 3D printing and we should expect to see it continue to play a huge role in building design across the world (and beyond).
By 2030, 60% of the world’s population will be living in megacities. With these massive population shifts come questions and concerns about the future of our built environments. Many have pointed to smart cities as the solution to our future urban development.
Like so many of the buzz phrases over the past several decades, the concept of smart cities originated from the sales teams of large tech firms. Amidst the financial crisis of 2008, large tech firms like IBM and Cisco desperately needed a new customer base. Luckily, governments across the globe had started to increase stimulus spending. From this, IBM created the “Smart Planet” initiative, wherein the technology of multinational corporations could be utilized by local governments worldwide. Although many of the other large tech firms followed IBM, this strategy has proven to be less successful than hoped - localized governments cannot successfully implement large, integrated service delivery platforms. However, this concept that applying intelligent, connected systems could make the world a better place took hold of the conversation surrounding the future of our cities, and with this, the smart city craze was born.
Over the past decade, there’s been a massive roll out of smart city initiatives across the globe. Tech firms and government officials have promoted this vision of a hyper connected urban infrastructure; one where IoT devices like sensors, smart lights, and smart meters gather data that can be analyzed to better understand the city’s infrastructure, population, and public services. A growing number of local and national government municipalities have invested in this vision of the future, hiring large tech firms to implement smart city infrastructure in their cities.
However, some have been quick to highlight the flaws in this method of smart city implementation - most notably Anthony Townsend, a research director at the Palo Alto-based Institute for the Future and author of “Smart Cities: Big Data, Civic Hackers and the Quest of a New Utopia”. Townsend’s major complaint is rooted in the “top-down" system of these plans. He believes that for smart cities to grow and thrive, they require a more natural, “bottom-up” system. The analogy he uses in “Smart Cities” captures the fundamental difference he sees between the two systems:
“These model smart cities are like mainframes where everything’s going to a central place. There’s one suite of software that dictates how everything works and can be very carefully engineered. But our ‘smart’ cities are going to look much more like the Web, where there’s going to be a lot of things deployed by individual decision, talking to each other through open standards in very ad hoc, loosely knit ways”.
When you design a city in an open grid format where citizens have the ability to customize the pieces that are relevant to them, a complex and rich system is created - a system where innovation can flourish. Townsend explains that this ad-hoc style of city development will result in a messy, but incredibly diverse and creative society.
The nature of connectivity is changing at the same pace people are moving to cities and we need a system that matches this pace. Townsend points to several reasons why relying first on a platform, instead of the people will not solve problems. First, large tech companies do not possess the city specific knowledge that its residents do. Citizens have an intimate relationship with the intricacies of their city and community, a relationship that allows them to design effective solutions to their every day problems. Second, when you hand over control of your city's development to one group, you will inevitably exclude a segment of the population. They will then live in a city that was not designed with them, or for them. Finally, and perhaps most importantly, these large scale projects often involve the company in the future maintenance of the infrastructure. This means that the workings of the city may be controlled in an entirely different location, one that may be run by a different government.
Still it's important to recognize that the future prosperity of our cities relies on some combination of these two systems - where the platform works with the people. Also, the ideas that arise from grassroots approaches are rarely perfected to a level where they can be of use to their broader urban ecosystem. The bottom-up system is inherently tailored to meet the needs of its city, therefore it's difficult to implement these ideas in other cities. Large tech firms have the capabilities and experience to help scale these ideas.
This bottom-up approach to smart cities is at the heart of the entrepreneurial mindset. It's the belief that given the right idea, the individual can make a significant difference. "For the people, by the people". If you want to see this in action, look no farther than the impressive cohort of entrepreneurs that we work with everyday. I raise a glass to the entrepreneurial citizens around the globe that in ways big and small have already contributed to the cities of our future.