Technology has taken over. This is the age of rapid information and innovation. In cities like Los Angeles and New York, which attracts the best and brightest, they deserve just that: the best and brightest in real estate technology.
Within the real estate industry, utilizing new and inventive technology has the potential to make management and building data readily accessible. For real estate professionals, both on the commercial and residential scale, online platforms help them work faster and smarter. Analyzing trends become easier, market changes are seamless to track, and thus better guidance based on hard facts from the data provided comes more efficiently.
The marriage of real estate and technology is reaching all facets of the industry, with real estate investors pouring $62 million into platforms that will enhance the system for both residential and commercial real estate.
That $62 million is almost 20 percent of the $322.5 million that has been invested in tech companies globally in 2015, the majority of that money–$221.8 million–has gone towards tech companies focusing exclusively on commercial real estate. The remaining $100.7 million went towards companies dealing with residential real estate.
Of the five-hundred commercial and residential real estate professionals polled for the RE:Tech report, about 85 percent of those working in commercial real estate said they were taking the time to understand how these new platforms have potential impact on their business. Overall, 45 percent of those polled believe their brokerage is interested in folding new real estate technology into their business strategy.
And it’s a smart decision to make: NYC-based real estate tech companies raked in $28 million in the first quarter of 2015, and $34 million in the second. One of those companies, Honest Buildings, a management platform for building owners, raised $5 million last month in fundraising. Another, VTS, a platform for asset management and leasing, recently announced its fundraising of $21 million.
“Honest Buildings technology materially improves efficiency and transparency for owners and developers, while reducing risk for lenders,” said Howard Milstein, chairman and CEO of Milstein Properties and Emigrant Bank, a lead funder of Honest Buildings.
Real estate investment is seeing a surge with the induction of crowdfunding platforms into the industry since the federal JOBS Act passed in 2012. Sharestates, a crowdfunding marketplace, has raised over $30 million since January of this year, and Cadre, an online investment platform, raised $18.5 million. This is a distinctive indication that the business is evolving and adapting to be as responsive as possible to client needs.