Proptech Real Estate Renaissance

The Proptech Real Estate Renaissance

Our world is becoming more connected and that includes real estate

Real estate is being disrupted in every way, from commercial to residential and multi-use builds that utilize innovative proptech solutions at every step.

The Renaissance was a period of history where Europe was pulled out of the dark ages around the 14th and 15th centuries. The word Renaissance means “rebirth,” and the experience was drastic within the culture, art, literature, and style of architecture which all developed immensely at that time. Right now, it’s a fair comparison to the current breakthroughs in the current real estate landscape.

The Home Insurance Building was the first skyscraper built in Chicago in 1885. This was an achievement where the construction industry thrived and caused a boom in new construction of these buildings that reached the sky and transformed the skylines worldwide. Most construction until this point was made out of wood, and the buildings being built were now made of stone, iron, and steel, which were relatively new materials. No one could have foretold that these materials would one day (today) be the cause of 70% of the greenhouse gas emissions in the world.

It was an exciting time to be alive. The real estate industry got very comfortable over the last 100 or so years until the new budding technology revolution started infiltrating real estate in the form of property technology. There is some debate on the first property tech; was it the security camera? The garage door opener, intercom, or first key card access control system? Either way, we had digital property technology at the end of the 1900s. Still, a significant shift came with cloud technology in the early 2000s, allowing users to access their building data remotely.

To bring things into perspective on the landscape for proptech today, investors are putting money into industrial and multi-family assets due to the White House having enacted the Infrastructure Investment and Jobs Act. This act includes the expenditure of $550 billion into physical infrastructures like bridges, roads, rails, plumbing, power, internet, public transportation, and environmental remediation. The expenditure is set to be spent over the next ten years.

Another driver for the current technological explosion is due to investors putting their money where their hearts and values are. Environment and Social Governance (ESG) criteria have been added to help investors to gauge their risk and return on investment. According to the 2022 CBRE US Investors Intentions Survey, over 70% of investors have adopted ESG, and 10% more will do so in the next 3-5 years.

Technology that will make the world smarter and more sustainable includes Electric Vehicles (EV) and charging stations. Dependance on fossil fuels is slowly coming to an end which is an excellent step for the world. Smart home sensors that monitor water use will be able to alert about leaks, and sensors on building/home occupancy will work with smart thermostats to pull from the grid at the most opportune and least expensive time while following the flow of traffic. These evolutions and more will lessen our impact on the environment.

The cities seeing the most investment in the 2022 Colliers US Market Snapshot are Dallas, Atlanta, and Los Angeles. The investment into offices is coming back with 35 billion dollars in investment in the first quarter of 2022, especially in Manhattan, Dallas, and Chicago. Mostly, these office investments are buyers purchasing properties to convert or demolish them to make way for new industrial assets.

Finally, cities are becoming more connected and changing how people live and move around. IoT sensors connect city objects and share real-time data to help traffic flow and municipal maintenance. Robust electric public transportation is lowering city emissions and making resources more available and equitable for everyone.

The technological revolution of real estate is still just beginning. We look forward to seeing how the renaissance unfolds over the next few years and hope you will take this journey with us. If you enjoyed this article, please sign up for our ReWyre newsletter and read all our proptech blogs here.