On December 4th Colliers PropTech Accelerator Powered by Techstars held its first ever program pitch event showcasing 10 companies from 7 countries. Each company attended in hopes of landing investors and taking the first step toward making waves in the commercial real estate industry.
These innovative demonstrations are exactly why the accelerator was created –– to address 21st-century challenges in the commercial real estate industry through the use of technology. Colliers International chose to partner with Techstars as part of their strategic venture strategy in order to leverage Techstars’ unique global network of mentors and resources in combination with Colliers’ real estate expertise and ensure the best chance of success for the participating companies.
Dylan Taylor, President and COO, Colliers International put it this way in his speech during the event, “When we look to the future, we know that how we embrace technology will increasingly be the key to our growth and differentiation amongst our peers. We also believe that these advancements will enable our experts to deliver smarter, more personalized services, that can help make a difference for our clients.”
Colliers championed this program in an effort to find technology solutions with immediate and long-term benefits for the industry. Attendees included investors and leaders in PropTech who share the vision that innovation is key to remaining competitive in the real estate industry and hoped to get a glimpse of the latest solutions for driving critical improvements in the industry. Here is my take on what they found; this class of entrepreneurs set their collective sights on diminishing operational inefficiencies and maximizing asset value for commercial real estate companies. This hard-to-ignore trend relies heavily on finding new ways to use data to untap these increased cost savings and new revenue opportunities.
So, for owners, asset managers, and developers, how exactly can these data-powered PropTech solutions maximize the value of your commercial real estate properties? The accelerator graduates responded with their unique spin on cost savings and new revenue generation in one of three core product areas: building and experience management platforms, marketplaces and aggregators, and data platforms. Ben Liao, Managing Director, Techstars explained that:
“Although each company is addressing a unique area along the real estate value chain, they each face common challenges of opacity or inefficiency in the commercial real estate market and they tackle this by using data and technology. The actionable insights they are able to produce manifests in either increased revenue or decreased cost of the real estate asset.
For example, those addressing building and experience management are in effect unbundling the traditional value proposition – where customers typically pay for location and square footage alone. This is evidenced in co-working, where customers today are willing to pay far more per square foot but with a shorter time commitment. So what we are already seeing today is that the value an occupant receives is becoming increasingly separated from just the traditional floor space they occupy.
Through this unbundling, occupiers or landlords can use technology to increase the density of space used or “true occupancy” and subsequently increase revenues through more flexible workspace solutions Space as a Service (SPaaS) or reduce costs via. portfolio optimization.”
The 10 companies in the program can be sorted into three general categories:
Building and experience management platforms
Marketplaces and aggregators
They can also be split into to distinct and important use cases: identifying cost savings and finding new revenue:
Identifying cost savings
Basking: Improving building efficiency is a key method of reducing operational costs. Basking is helping asset managers do so by combining Wi-Fi data, HVAC data, sensor data, and more to identify occupancy trends and space utilization rates and minimize energy consumption.
Raybased: Avoiding emergency repairs is another key part of keeping operational costs to a minimum. According to Raybased, “A pre-emptive fix can be 10x cheaper than an emergency repair.” Raybased monitors: temperature, humidity, light intensity, air quality, motion, and energy used, and their focus is on buildings over 50 years old.
MapYourProperty: For developers, navigating regulations and documentation can be a massive resource sink. MapYourProperty looks to address this by accelerating due diligence and centralizing all of the information developers need, saving time and money during the planning process.
Lane: Retaining tenants helps building managers avoid lost rental income and refurbishment costs when tenants leave. Lane is looking to improve retention rates by offering services and amenities, creating community, and providing better experience to tenants.
RefineRE: Portfolio intelligence platform that empowers corporations that rent or own real estate to run their business to make data-driven decisions about how their real estate impacts and become more efficient.
Finding new revenue
MapYourProperty: Undervalued development opportunities are like hidden gems for investors. Along with the due diligence benefits that MapYourProperty offers, the right combination of property data points can triangulate these hidden gems in ways that traditional services might not offer.
A Retail Space: Location is key for retail. A Retail Space aims to help retail businesses find the optimal space for their stores by matching target customer personas with detailed demographic information about an area’s foot traffic.
Upsuite: Reducing the turnover and vacancy rates in co-working spaces increases your investment’s productivity. By offering platforms for customers to find the perfect space, Upsuite is working with the traditional co-working model and providing spaces at convenient monthly rates.
Booqed: Also offering a co-working platform to reduce the wasted opportunity cost of vacancies, Booqed is working to maximize occupancy with the micro-bookings of hourly, daily, weekly, and monthly.
SPCE: The third online booking platform, SPCE is working on the same problems as Booqed and Upsuite but for student housing.
All of these startups are working on existing problems and leveraging emerging technologies to achieve more than what has been previously available –– in largely green markets primed for disruption. This seems like a smart move given the relatively low adoption of these services to date. For perspective, the companies above outlined their addressable markets, ranging from $14b to $300b, with building counts in the millions and square-footage counts in the billions. I commend this season’s Techstars Colliers Accelerator class on recognizing new opportunities in commercial real estate by approaching existing problems with a new perspective and adding additional layers of data.