Five Technologies That Real Estate Development Teams Should Utilize Now
Oriento | via Unsplash
“Disruptive technology should be framed as a marketing challenge,
not a technological one.”
~Clayton Christensen
2021 is just (deep breath) around the corner; we believe that the coming year will bring real estate development into its digital renaissance. Our industry has been trying to embrace technology, yet is one of the hardest sectors to break into given the siloed verticals, and hesitance from the for-profit, not-for-profit, and governmental entities to sit at the table with those that it deems “outsiders.” One of the best things to come out of 2020 is that the industry became more welcoming of technology to make remote work productive, used new digital collaboration tools, and found innovative ways to visit development locales that we couldn’t fly to.
To further understand where the shifts will be, you have to understand how we got here. We recommend reading Urban Tech on the Rise: Big Data Disrupts the Real Estate Industry by Stanislas Chaillou, Daniel Fink, and Pamella Gonçalves. A note - although the piece was written in 2019, it primarily focuses on data up until 2014. Nevertheless, the authors provide an excellent foundation to understand the how, the what, and the why. “PropTech” has been the term that is commonly used to refer to companies in the real estate technology space. Many PropTech companies focus on facilitating search, buy, and financing - yet in the past 18 months, we have observed many being founded to exclusively support the development side of the market.
In 2021, we believe that new developments will be able to:
Build models, feasibility studies, and business case based on predictive data (instead of just historical + current)
Use data-driven generative design to find the best outcomes for planning and design (model thousands of options, top choices scored for specific needs)
Engage with innovative companies to select the best building materials and companies to execute with (materials and suppliers/collaborators selected based on a portfolio of global options, not just local ones)
Build-in smart/IoT devices for both public and private spaces (a close-to seamless customer/user experience; better systems efficiencies)
Hire marketing and experienced-focused collaborators that have optimized their processes (allowing for a greater focus on marketing strategy, and customer/user experiences)
There is a caveat, but a silver lining exists. Early adopters of new thinking and technologies often find themselves tackling a tougher learning curve, yet almost always outperform their peers who sit on the sidelines. For PropTech (really, anything) to truly work - it must always answer to the business case - we believe in a triple-bottom-line mindset answering to people, our planet, and profit.
Below are the five areas that we will focus on in this report.
01 | Data + Analytics
02 | Generative Design
03 | AEC / Construction
04 | The Internet of Things (IoT)
05 | Marketing Efficiencies
*If you want an exceptionally written, researched, and in-depth look into PropTech, we highly recommend Oxford’s Saïd Business School’s “PropTech 2020: the future of real estate.”
Marcella | via Unsplash
01
DATA + ANALYTICS
Data is the intersection of numbers and human behavior. Future development decisions should be guided by predictive analytics along with historical and current data/knowledge discovery. This approach will likely involve working with a few collaborators, depending on the desired outcomes - there is currently no one-size-fits-all approach to aggregating and translating data across the planning, design, and marketing phases. In “Data is the new gold,” via Deloitte, they make the case that ”The role of the real estate service provider of the future must evolve to embrace digitization and stay ahead of the competition.”
We recommend that development teams first come up with as specific as possible outcomes, and use cases. After determining outcomes, teams should then define what their framework for data + analytics is, and how it can be applied and adapted throughout the development lifecycle. When selecting the right data and analytics company to collaborate with, teams should optimize for a balance of experience and technical skills - the learning curve for a PropTech company to fully immerse themselves in development takes more time.
These are a few of the companies that we are following in this space.
CompStak has the broadest aggregation of commercial data, alongside a large network of contributors + data scientists, which keeps the data honest.
Meyers Research just rebranded as Zonda, and released an offering specific to multi-family sales & marketing.
Local Logic recently released an offering for real estate developers, and has leadership with deep real estate experience - we predict that they have a strong potential to reshape how data is interpreted.
Industry stalwart The John Burns Company has recently launched its New Home Trends Institute, bringing together curated inspiration backed by deep-dive research - another excellent combination of deep experience and future-thinking.
We’re also following Remarkably, which has created a fully optimized funnel that actively connects marketing to leasing.
01 | Discussion Starters
What is our data and analytics strategy, and what are our desired outcomes for each development phase?
What can we learn from the deep role that technology plays in hospitality, and the commercial real estate sector - how can we apply those to multi-family development?
Do the companies that we are engaging with understand the fundamentals of how real estate development works? How do we improve internal capabilities to work with companies without real estate development depth?
Markus Winkler | via Unsplash
02
GENERATIVE DESIGN
Embracing generative design and parametric (computational) architecture will save us time and money, and also allow for stakeholders in different locales to weigh the best planning and design options for new developments in real-time. Architectizer’s Nathan Bahadursingh gives us a broad overview of the sector, in simple language in “The Future of Architecture: How Generative Design Will Change Cities Forever."
What is Generative Design (via Autodesk): Generative design is a design exploration process. Designers or engineers input design goals into the generative design software, along with parameters such as performance or spatial requirements, materials, manufacturing methods, and cost constraints. The software explores all the possible permutations of a solution, quickly generating design alternatives. It tests and learns from each iteration what works and what doesn’t.
These are a few of the companies that we are following in this space.
Sidewalk Labs recently introduced Delve to the market earlier this month. The software will empower urban development teams with cloud computation and machine learning to help them design better buildings + places, with greater efficiencies to help save time, and improve design outputs.
Testfit is an earlier entrant to this space, and Australia continues to inspire us, with Archistar having launched in 2010, sharing "The Seven Key Stages That You Need to Know About."
What’s next? Digital Twins, which are essentially virtual replicas of a built environment. They contain all of a building project’s structured information (design files), unstructured information (manuals, best practices). The goal of a digital twin is to help every stakeholder on a team to be able to digitally simulate their contribution materials to a built environment, understand what others are working on, optimizing, and predicting for the best results.
SAP’s Johnny Clemmons writes via Forbes, "Real Estate: Taking A Holistic Approach To The Digital Twin” that we are still working towards ways to clear some of the hurdles for digital twins, but we will get there soon.
02 | Discussion Starters
How early is the team ready to utilize generative design software?
What will the team’s evaluation criteria and metrics be?
How far can the parameters of generative design be expanded?
Reuben Garcia | via Unsplash
03
AEC / CONSTRUCTION
A 2019 McKinsey report “Modular construction: From projects to products” estimated that by 2030, modular construction could. potentially account for a combined $130B of new real estate construction in just the United States and Europe - while also capturing $22B in annual cost savings. 2020 has increased timelines and decreased budgets as teams reprioritized spends across design, construction, and finish selection. In response, development teams will have to drive at greater efficiencies while concurrently ensuring that development product looks and feels special.
Understanding the ins and outs of both modular and robotic construction will challenge design and marketing teams. For the former, how to drive efficiency without sacrificing their aesthetic vision. For the latter, how to communicate that quality, and soften the efficiencies of technology for a very human product, and one often attempting to command benchmark pricing.
These are a few of the companies that we are following in this space.
From an aggregation and collaborator/supplier selection perspective, we like the value proposition of ProjectMark, which connects the architecture, engineering, and construction (AEC) community by providing a multi-faceted, portfolio-driven platform that enables real estate development teams to source project teams and review company portfolios.
A company that offers beautifully-designed interior robotic solutions is Ori Living - a studio suite, or a cloud bed, to our favorite, the pocket office.
Juno, which officially launched in July 2020 is building an end-to-end platform to connect and streamline the entire real estate development process while focusing on sustainability, resident wellness, organic connections, and premium design.
Cross Laminated Timber (CLT) is also something we should expect to see more of - it helps to reduce greenhouse gas (GHG) emissions, produces less waste, pollution, and costs associated with construction, and can create a beautiful yet very healthy built environment.
03 | Discussion Starters
Where can cost and time efficiencies be achieved by utilizing modular solutions?
What is the best way to find qualified and talented AEC companies?
What are the sustainable construction and finish materials of the future?
Dan Lefebvre | via Unsplash
04
THE INTERNET OF THINGS (IoT)
The Internet of Things. (IoT), is made up of physical things that we currently use in our daily lives, essentially an ecosystem of sensors, smart devices, that are integrated and connected with each other to the cloud to collect, analyze, and evaluate data. We now have smart TVs, doorbells, thermostats, appliances, security systems, the list goes on... IoT helps us manage our personal lives, professional lives, and the environments that surround us in almost every aspect.
Almost all building systems today (even retrofits) can be connected to remote management and monitoring. These benefit both development teams and residents by ensuring that there is efficiency, empowering teams to proactively address areas for concern while maintaining the healthiest standards of living.
These are a few of the companies that we are following in this space.
Amazon just released their Alexa for Residential offering, which allows residential developments to manage multiple devices at the same time, from the minute they move in.
For building systems, Enertiv is designed to digitize workflows and reduce costs, by streamlining devices, delivering recommendations, and ensuring transparency for “every stakeholder from the boardroom to the boiler room.”
For adaptive-reuse and retrofits, Radiator Labs offers a smart radiator cover that seamlessly goes over steam radiators, optimizing for efficiency and comfort.
Flo by Moen recently introduced an offering specific to multi-family for their smart water monitor.
04 | Discussion Starters
Will “device x” truly make our residents’ lives significantly easier?
What are the IoT devices that we can offer in the public and private spaces?
What happens if IoT devices malfunction or break?
Do we understand how data will be collected, stored, and used? (residents will ask)
Lanju Fotografie | via Unsplash
05
MARKETING EFFICIENCIES
Unique branding and property marketing not only elevates a development offering but tells the story and vision before the development product is even built - a must for early informational and educational efforts. Great marketing sets the tone for the offering that is yet to come or reinforces the perception of new development already on the market. However, not every team has the budget or luxury of time needed to invest in a full marketing suite. With more distressed assets coming onto the market over the next 12 - 18 months, having the opportunity to save both time and money on marketing will be important.
Conversational and artificially-intelligent chatbots are something we believe almost every real estate development should be using these days - almost every luxury brand uses them, as the technology has become very intelligent and a worthy investment. The majority of people begin their search online, and not during typical working hours - marketing should be empowered to immediately engage with them. In highly-competitive markets, every lead is precious. There are three levels of chatbots to be informed about, and they are as follows:
Basic | Menu-Driven
The most basic type of chatbot available; our best comparison would be to an automated phone menu. We do not recommend using a menu-driven option for real estate as the user experience requires too many steps to get to a specific answer, and it can be more frustrating than helpful.
Mid-Level | Keyword Driven
Smarter than a pure menu-driven option, these chatbots try to “listen” and respond appropriately. We recommend keyword-based chatbots as the bare minimum that any development should consider. For a boutique or unique offering, this may be all your team needs, as the end goal is to capture the prospect and route them to a sales or leasing team.
Advanced | Contextual Chatbots
These are the most advanced chatbots and use Machine Learning (ML) and Artificial Intelligence (AI) (they are different) to remember conversations with specific users to learn and grow over time. These chatbots are smart enough to self improve it, making conversations shorter, and more valuable over time. We recommend contextual chatbots for longer-term placemaking developments, where you often have multiple offering types, a longer timeframe, and content that will change over time.
These are a few of the companies that we are following in this space.
Respage offers one of the more comprehensive chatbot solutions, and there are many custom solutions, which may be more useful when it comes to for-sale offerings as many bots are tailored towards leasing.
We love the self-scheduling touring interface that Knock offers - prospective renters can schedule in-person or virtual tours from almost any app
Once your team is ready to track calls, Call Rail offers multiple solutions that integrate with almost every major marketing / lead-tracking platform.
Jonah Digital is revolutionizing how real estate development websites are built, offering everything from corporate websites to full property websites, to splash pages, along with a specific menu and highly-transparent pricing.
We’re also fans of Beam Robots, which are a great way to manage property tours - they can be guided by more than one person and are (with permission) accessible anytime.
05 | Discussion Starters
In addition to a website, what other creative assets will we need (renderings, photography, final floor plan files)
Which companies have AI-enabled chatbot customer experiences that we would like to emulate?
What processes can be improved on, so that time invested can be focused on the product and experience?
In closing, we believe that for real estate development to thrive we will need a combination of problem-solving, creative-thinking, and deep knowledge about our product, processes, and customer needs. All in record time, because the clock is ticking and history has proven that those who think ahead of the curve come through crises successfully.
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A thank you to our Butterfly Voyage industry insiders and contributors (including the incredible Basma Rajper). Their perspectives, insights discussion, and support were a key part of making this piece come to life.