PropTech

What We Learned From the Tel Aviv Roadshow

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The third roadshow stop for the MetaProp Bridge @ Columbia University took our partners to sunny Tel Aviv, Israel.  It was particularly exciting to visit during the widely celebrated Purim holiday.  Amazing costumes everywhere!

We’ve had our eyes on the Israeli PropTech startup market for a couple of years now and are very impressed with its recent development.  During our short visit, we met almost a dozen real estate tech companies and many industry enthusiasts, mentors and investors.

We thought our readers might appreciate some quick observations from the road show trip:

  • Cybersecurity, computer vision, robotics, and, quite frequently, automotive were the most commonly mentioned local industry clusters generating buzz.  For more information on what’s happening on the ground, we recommend checking out Forbes’ “The Tel Aviv Tech Startups To Watch In 2018.”

  • While “Startup Nation” has long been a hotbed of technology and innovation, VCs, corporate R&D, innovation and venture arms are all further increasing their presence in Israel - from Haifa, to Herzliya, to Tel Aviv, to Beersheba.  We frequently heard names like Intel, Microsoft, HP, Volkswagen, etc.--along with many other corporate names that one might not traditionally associate with technology (e.g. insurance, infrastructure and CPG companies)--cited as players increasing their local activities. Tech is on everyone’s mind.

  • Startups naturally remain very interested in growing outside of Israel.  The most common expansion locations we heard were North America, China and Western Europe. Read Forbes’ “Israeli Entrepreneurs Are Shaking Up The American Real Estate Market.

  • We saw tremendous interest in the PropTech space - especially Construction Tech (Astralink, Siteaware, Beyon3D).  This makes sense as the country is experiencing an enormous real estate boom.  There are more cranes flying in Tel Aviv than Aaron has seen since his time in Moscow in 2006.

Special thanks to our friends who supported and hosted during the trip - especially the entire executive team at market leading PropTech firm BMBY!

 
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Aaron Block  Co-Founder & Managing Director  Email

Aaron Block
Co-Founder & Managing Director
Email

Zak Schwarzman  Partner  Email

Zak Schwarzman
Partner
Email

Get Closer to the Science

An old friend (who happens to be an accomplished tech CEO) recently suggested that I listen to a few Neil deGrasse Tyson podcast interviews.  I found a great one produced by The Guardian on Spotify.  

Some of Mr. Tyson's thoughts directly apply to many of the mature real estate corporations' businesses.  In general, I like two of his important points (found at the 20th minute):

  • Investments in science today will be engines of tomorrow's growth economies.  
  • Innovation culture allows cross pollination of one solution to another, frequently unrelated, problem. 

3 examples:

  1. Medical Devices.  Nearly all medical devices (CAT, PET, MRI, X-Ray) are able to work because of principles of physics discovered by physicist who had no interest in medicine.  focusing on medical change delivers evolutionary progress.
  2. Stoves.  If you're an expert in stoves, nobody can ask you to think really hard about ways to improve the pot belly stove beyond a few incremental features.  No matter what, you won't create something as different as a microwave oven.  This can not come about from incremental thinking about your own stove business.  It comes from totally different technologies cross pollinating with your own.   In this case, microwave communications.
  3. Grooved Pavement.  Sometimes solutions are not high tech.  Think grooves on off-ramp pavement.  These originally came from NASA's need to control shuttle drift upon tarmac landings.

The way I see it, real estate organizations need to GET NEAR THE INNOVATIVE SCIENCE so that it can cross-pollinate with their needs and create new, revolutionary ways of doing business.  Create an innovation culture.  Embrace next generation #PropTech!

Unicorns Eat Dinosaurs

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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!