Elon Musk announces shorter private flights to space ahead of sending humans to Mars. Arnold Schwarzenegger gives his take on gerrymandering. Ashton Kutcher throws a party for the ages. These are just a few of the top stories from the first few days of SXSW this year.
The topic of real estate may not be catching the headlines on USA Today this week, but there’s a growing real estate and PropTech scene here at the Austin mega-festival this year.
If you entered the Austin Convention Center from the north east over the weekend, you would have walked by a bus with a fresh Knotel paint job. The fast-growing New York City-based coworking startup hosted a “BBQ as a Service” party on both days of the opening weekend at SXSW Interactive. The startup also sent buses of conference attendees to Austin’s famous Salt Lick BBQ outside the city, a popular destination for visitors and event-goers. We’ve previously talked with the Founder and CEO of Knotel, Amol Sarva, about his “headquarters-as-a-service” concept and how each location is designed to reflect its tenant’s unique ethos.
There was plenty of built environment technology being talked about at the event. There were dedicated PropTech seminars and the subject seemed to be integrated into other verticals like FinTech and banking. For those venturing deeper than the swag and parties, you’d be able to find PropTech talk both at a dedicated session, as well as woven into other tracks dedicated to the likes of FinTech and banking.
“PropTech is coming into its own at SXSW,” says Joy Schoffler, Chief Strategy Officer at real estate private equity firm Casoro Capital, “People around the conference know what PropTech is when they didn’t in years past.” Schoffler, a former board member at the Crowdfund Intermediary Regulatory Advocates (CFIRA) and Executive Chair for Austin’s Fintech Professionals Association, has been involved in SXSW for several years as a PR consultant and FinTech expert. This year Schoffler was a panelist during a session on “Banking Disrupted: The FinTech Opportunity”. She took the opportunity to announce the imminent launch of Casoro Capital’s new real estate FinTech play called Upside Avenue. “The next evolution for commercial real estate investment firms and funds is to do an online non-traded REIT.”
“People around the conference know what PropTech is when they didn’t in years past.”
When asked how a traditional real estate owner/operator should look at potential technology projects, Schoffler cautions “Look to buy before you build… Upside Avenue’s back end is built on a suite of best-in-class technology platforms,” for investor management and compliance, and only employs custom development to tie together the platforms and customize their own front-end website. “You might spend hundreds of thousands of dollars building out custom solutions, when you could instead spend only tens of thousands and deploy much more quickly with third party platforms from startups. Utilize best in class proven solution providers until you absolutely have to build.”
For those explicitly looking for PropTech content, Constance Freedman (Moderne Ventures) and Stephanie Fuhrman (Greystar) hosted a discussion on “The Future and Impact of Real Estate Technology” that was “liked” over 600 times in the SXSW scheduling app. The duo covered some key industry trends and bantered back and forth about each one from an investment standpoint (Freedman) and a user standpoint (Fuhrman). Some of the key trends they point to that are reshaping the real estate market are digitization of information (big data), decentralization through blockchain, and collaboration between different point-solution providers.
The chances a new real estate tech vendor gets deployed across Greystar’s entire property after pitching them a product? “Slim to none,” says Fuhrman. With such a large portfolio, she typically sees an opportunity to test a solution in a single property or a small group of them, whether that’s a new tech-enabled amenity, hardware, or data set. PropTech startups need to be patient when dealing with real estate companies with such huge portfolios.
How does a startup survive such a long sales cycle? Freedman suggests working with a broader set of mid-market companies with smaller teams, but still enough real estate in their portfolio to be a meaningful testing ground. If the solution proves out its value with enough of those companies, it puts an entrepreneur in a better position to win business with those larger firms.
Once there’s a PropTech solution that’s meeting a real need, what other qualifications does a large landlord like Greystar look for in a technology solution? “Number one in this day and age is security and privacy,” explains Fuhrman. “We’re asking our software providers to sign technology riders.” Another consideration is a partner’s ability to match Greystar’s global scale, “What is their ability to do business with us not only in the US but on a global basis?”
Freedman suggested another train of thought for real estate practitioners: “Think about how major technology trends outside of real estate are going to start affecting it inside.” A key example she cited was how blockchain and cryptocurrency are set to disrupt today’s workflows in everything from finance to title to insurance.
“Think about how major technology trends outside of real estate are going to start affecting it inside.”
Besides panels, parties, and talks, SXSW Interactive also hosts an annual startup competition that breaks early stage companies into 10 categories ranging from Health & Wearables all the way to Security & Privacy. Several of the contestants pitched products and services that could have big implications for PropTech and the built environment. Some examples:
Hometown favorite and winner of the Social & Culture category Icon 3D is a construction-technology company currently working toward building the first up-to-code 3D printed home in the United States using concrete as substrate.
San Francisco-based Roofr offers a marketplace for roofing using artificial intelligence to provide instant satellite-based roofing estimates.
In the workplace communications space M.io enables group chat across multiple company chat platforms tools like Slack, Cisco Spark and Microsoft Teams.
Homebase is a connected building and community management platform for multi-family and student housing.
New York City-based StackSource is a tech-enabled commercial real estate loan platform connecting investors who are developing or acquiring commercial properties with financing options like banks, insurance companies, and private lenders.
Also based in New York, Envested offers a workplace engagement product that allows employees to seamlessly self-organize around leisure activities, workplace events and local volunteer opportunities.
Commutifi is an ambitious wellness platform that aims to capture data from people, businesses and cities to optimize commuting and its environmental impact.
Mogol is a virtual traffic management platform that uses the vehicle as a sensor instead of expensive roadside sensors and digital message signs for traffic management.
As technology for the real estate sector continues to evolve, popular events like SXSW provide us with a useful heat-check each year to gauge consumer awareness. Though real estate technology is not usually what comes to mind when we think of this festival, the show’s organizers like to say that unexpected discoveries happen when diverse topics and people come together. Perhaps it’s not at a fever pitch yet, but according to many at SXSW 2018, PropTech is heating up.