Increasingly, buildings – from offices to multifamily – are being designed and operated with the idea that the most important aspect is the experience of the end user, the tenant. But understanding what a tenant wants and how to give it to them isn’t always straightforward. These issues were addressed by an industry panel at Propmodo’s recent NYC Real Estate Tech Week conference.
Moderated by Sandy Jacolow, chief information officer at mortgage provider Meridian Capital Group, the panel consisted of four PropTech professionals: Marcela Sapone, co-founder and CEO of apartment concierge services company Hello Alfred, Mark Smukler, co-founder and CEO at property software firm Bixby, Chase Garbarino, founder and CEO of tenant experience platform HQO, Chris Kelly, co-founder and chief innovation officer of meeting and workspace provider Convene.
From a birds-eye perspective, Mark provided a compelling vision for how the tech-enabled real estate world may function in the future, with the three pillars of smart devices, Internet of Things (IoT) technology, and AI connecting to power buildings and portfolios. This will enable benefits for both the management and the tenants like preventative maintenance detection and amenity customization.
“I’m very excited to see what happens with smart devices, IoT, and then AI is kind of the machine running platform in the background that’s helping make sense of all that data and have an actionable decision,” Mark said.
Indeed, as more PropTech firms start sharing their abilities with the real estate community, the tech landscape’s current status is becoming easier to diagnose.
“If we’re in amenity and technology 1.0, then what is 2.0? I would articulate that there’s a very clear line in the sand for me between 1.0 and 2.0,” Chris explained. “1.0 is taking the concept of technology and [the] shared economy and retroactively applying them to an already-built and designed asset. And 2.0 is when new developers coming out today are going to conceive their building from inception in anticipation of being technology-enabled with the provision of shared services inside of an asset.”
So if our current state of PropTech implementation revolves around owners implementing a new technology like Hello Alfred in an existing building, 2.0 would see Hello Alfred employed in a building actually designed and constructed with the technology in mind – tailoring spaces to the needs of the tech provider as well as the resident.
But with that sophistication of approach comes pitfalls as well. With data so readily collected and used to inform decision making, and the real estate value proposition evolving from the provision of shelter to the prediction and fulfillment of a basket of needs, it can be easy to overstep boundaries, particularly in the landlord-tenant relationship.
“If the resident really is your asset instead of the building, where is your resident going to expect you to be anticipating their needs and where does it start to feel like it’s a privacy breach,” Marcela said, going on to propose that every data-enabled interaction be opted-in by the resident involved.
Another risk, facing more than just tenant-facing companies, is the ongoing struggle to ensure strong information security.
“I think it’s always a push-pull between security and getting your product out to the market,” Mark said, adding that “When you’re an early company and you have limited resources obviously the question about security is a huge one, hugely important, but frankly most companies don’t really give it half the weight and the attention that it needs because you’re just focused on building that great product and getting it out to market and servicing your clients.”
Mark was not alone in that perspective. Chase also expressed concern over the possible negative externalities generated from PropTech startups.
“I think what we’re seeing is if you’re not mindful of the design of what your software’s output is, there can be really bad consequences,” he said. “When you start to talk about physical space – people’s locations, where they’re going, what they’re spending on, people communicating and connecting to those around them – the stakes for that are pretty high. As all these siloed databases start to talk to each other, there is a tremendous amount of value in that, but I think people who are creating this new space have to be at the forefront of anticipating some ways that that could be used in malicious ways It’s highly sensitive data.”
But despite these misgivings, the panel had an overall cautiously positive outlook on the direction of PropTech over the coming years. Indeed, it was a sense of a turning point that might be the most salient takeaway from the panel’s discussion.
“Do you want to be a commodity or do you want to be an experience business? And there is probably going to be a polarization in commercial real estate between people who make one of those two choices,” Chris said.
It is clear that the PropTech world has a lot to offer as technologies mature and applications evolve. And few seem to deny that with great power comes great responsibility. At Propmodo, we look forward to a tech-enabled future that balances vibrant creativity with a healthy dose of common-sense caution.