9 JAN 2019
Proptech drove a lot of discussion at the RICS Americas Summit Series in 2018, including how technology will influence the development and management of the built environment over the coming decade.
To continue to build on the interest in this topic, Robert Herman MRICS, RICS Chapter Committee member in Northern California is running a series of interviews with venture capitalists that invest in proptech. He caught up with Jeffrey Berman of Camber Creek to get his perspective on proptech trends.
Camber Creek is a venture capital firm with offices in New York and Washington, D.C. that invests in real estate technology companies. We invest in companies that have had some traction in the market but could benefit from our LP network to turbocharge their growth. We currently have nine companies in our portfolio.
Our strategy is based on the needs of our LP network. Our investors are primarily large commercial and residential real estate developers, owners, managers and all these entities have faced and are still facing pain points in their workflows. We evaluate and invest in companies that have solutions to address these problems.
Real estate as an asset class presents such a tremendous greenfield opportunity for tech that there are almost too many things to be excited about. But, in general, I am a fan of technologies that create opportunities to effect positive behavioral and systemic changes on large segments of society.
Be open to technology solutions but be mindful of the impact that improperly vetted technology can have on an organization.
Enhancements to the built world via internet of things (IOT) technology will become an increasingly robust part of the proptech universe. Real estate transactions will be increasingly reliant on AI programs. But autonomous vehicles will be the real game changer. The technology is going to be continuously refined over the next five to ten years and has the potential to completely upend the manner in which we interact with all types of real estate.
Advances in robotics have the potential to reshape the landscape in the retail and food service industries.
I'll give you an example of a current portfolio company that solved the up-utilization of an underutilized space in a really interesting way for the multi-family space.
When a new multi-family (rental) building comes to market, the developer/owner experiences large losses in the form of vacancy loss during the lease up period. Depending on market dynamics, that period can last between six and 16 months – sometimes longer. We invested in a company called WhyHotel that operates pop-up hotels inside brand-new apartment buildings offering a hotel experience in brand new units. Unlike their competitors, they don't lease the apartments; rather, they manage the hotel process until the building is fully occupied. In this way, the developer gets to enjoy 'found' revenue by up-utilizing previously underutilized space.
Bowery is a technology-enabled appraisal firm. Despite advances in technology around the real estate space, appraisals are still being done in a very analog way. Bowery introduced the world's first end-to-end technology-enabled appraisal system that allows appraisers to do their work in 75% less time and often at a lower cost. Their platform provides a seamless and elegant solution to a key component of the real estate transaction workflow; they are at the leading edge of how real estate is going to be transacted in the future.
A third company within the portfolio that's doing tremendous work is Nestio. Nestio is THE multifamily marketing and leasing platform that the industry has been pining for. The company solves multiple pain points in the leasing and marketing process enabling property managers/owners to empower their teams to rationalize their listings and leases into one uniform system. Recently released version 2.0 of their product that is making their clients' businesses more efficient.
The most obvious is the hesitance and/or reticence of the real estate community and industry to embrace change and adapt new technologies. But we have seen a dynamic shift in the collective attitude of the industry in the last 24 months. Technology is no longer being viewed as a nice to have. It is rapidly becoming a need to have.
Be open to technology solutions but be mindful of the impact that improperly vetted (and funded) technology (companies) can have on an organization. If you're interested in the space, follow the people and companies who make it their business to understand the wider market.
Bowery and Nestio were two of the proptech companies that participated in the RICS Summit Series Americas 2018.
The author of this article, Robert Herman MRICS, is an RICS Chapter Committee Member, NorCal.