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Catch #CRETech If You Can. Guest Post: Anthony Dominguez

catch-cretech-if-you-can

Catch #CRETech If You Can.

We all know by now that CRETech is poised to enjoy hyper-growth; after all, the industry just set a record by raising $62 million in the first half of 2015. But before we give ourselves a big pat on the back, let’s look at some comps like a good real estate analyst. Year to date: Bitcoin startups raised $375 million and FINTech as a whole raised over $1 billion, AgTech raised $2 billion, and medical startups raised over $3.9 billion in the second quarter only. But hey, you have to start somewhere.

 

Now for the good news: There are a lot of CRETech opportunities. Venture capitalists assert that enterprise lags behind consumer tech by roughly three to four years. Given that the consumer is now predominantly using mobile, mobile enterprise should be the next multibillion-dollar frontier. We know this is true because just now we are seeing cloud platforms taking off the way everyone imagined in 1995. In 2015, Zenefits is how you manage your company’s health insurance, Slack is for team communication, and Asana is how you get tasks done.

 

In the same time period, CRETech adopted technology that came to fruition years before. We now have crowdfunding platforms of our own since Kickstarter was founded in 2009, and pipeline/CRM tools via Highrise and View the Space when the rest of the world is on Salesforce. From this micro data point we can reason that CRETech is approximately four to five years behind enterprise tech. The question becomes, where do we go from here, and how do we catch up?

 

If venture capitalists are right that the next multibillion-dollar market opportunity is mobile enterprise, then commercial real estate has an opportunity to become a leader. Real estate is about the bricks, and we need to be in the field doing our site tours to make sure we know every nook and cranny of our market. We’re a mobile industry, so let’s innovate in that space, or at least copy what consumer tech has already figured out.

 

On your site tour, I wouldn’t be surprised if you are carrying a manila folder with deal setups, demographic reports, comps, a smartphone for photo taking, and a GPS directing you to the next location. Meanwhile, if you wanted to find a restaurant, you’d open Yelp, which already has your interest graph and location and gives you relevant suggestions. Come on, there’s got to be a better way.

 

I shouldn’t have to open LoopNet to manually filter and search. I should get a push notification when a deal meets my criteria and, oh look, I’m only three blocks away. Whatever neighborhood I am in, I automatically pull up the demographics and competing sites. Who owns that building again? Using geo-location, I instantly find out. On site tours, analysts will no longer have to memorize the facts cold and shamefully answer, “I don’t know but I’ll find out for you.” Their CRETech will have already anticipated it.

 

The mention of Snapchat may make your eyes roll, but to our beloved millennials, it’s a way of life. If there’s one thing to learn from Snapchat, it’s how it reached hyper-growth. When you sign up for Snapchat it asks for permission to access your phone contacts in order to find your friends. That’s incredibly powerful. Imagine how fast Snapchat would grow if it asked you to upload a CSV of everyone you know. I don’t know about you, but my contact list in my phone is over 400 people, split roughly 60/40 between business and personal contacts.

Seeing as how real estate is a who-you-know kind of business, I look forward to a mobile first deal room. In leasing CRE, I already use text messaging as short-form conversation. Why not snap setups, digitally sign LOIs with my index finger, reject proposals with a swipe (that would be a lot of fun), invite contacts to a deal room, get push notifications when a deal status changes, and enjoy that all the while I’m on the road.

 

For once, CRETech has the opportunity to be a first mover. If CRETech innovates in the mobile enterprise space, it’ll be the next tech darling everyone is trying to catch up to.

 

Sources:

https://www.cbinsights.com/blog/2015-bitcoin-funding-trend/

 

http://agfundernews.com/

 

http://www.wsj.com/articles/health-care-startups-raise-record-3-89-billion-in-venture-capital-in-first-quarter-1429633713

 

Connect:

Twitter @tonydominguez

LinkedIn Anthony Dominguez

Website www.adoming.com

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  • Anthony, great article, two thoughts 1. #CRE and Periscope (owned by Twitter), no more in person previews, travel expenses eliminated, think Snapchat on crack. 2. Any chance you think someone will develop a #CRETech fund, I would love to buy into a fund that has a stake in all things #CRETech and reap the benefits monetarily. The pace that #CRETech moves at is sometimes hard to keep up with. Thoughts?

    • Anthony Dominguez

      Your first point is interesting, I think Floored is going to be what you’re describing. Not only will we have 3D representations of spaces but of entire cities. While I haven’t seen a specific CRETech fund, I noticed Dave McClure is the top investor in a lot of early stage CRE startups. That may just be a by product of his business model 500 Startups though. I’m sure we’ll see one soon!

  • Interesting post. One thing that springs to mind though is that for CRETech to really take hold the industry needs to move beyond ‘real estate is a who-you-know kind of business’ – the whole point of tech is to democratise information and so the right tools should be able to provide you with the deal you require/need regardless of whether you ‘know someone’. Why can’t we build something so that the following is possible: I want to invest $8-10 million in an office building, in ‘abc’ location, built not later than ‘123’, with a tenant role of not lest than ‘xyz’ credit rating, and lease lengths between ‘c’ and ‘d’ years. Yielding no less than ‘efg’. – Here’s four that match, here’s all the documentation, here’s the contract – guaranteed completion within 5 days.

    A proper supply/demand open and transparent market, in other words. One where who you know is irrelevant. The only thing that matters is evaluating what it is you wish to buy or sell. And that bit remains deeply human.

    Thanks

    Antony
    antonyslumbers.com
    @antonyslumbers

    • dukelong

      Antony,

      I can only agree with your entire comment. Take a look at https://brevit.as/ and https://www.realconnex.com/

    • Joseph Stecher

      Anthony, many of the crowdfunding sites have the instant access to investments that you describe, but only to invest, not to sell, and more importantly with less of the granular filtering that you are describing. Have a look at RealConnex.com. We have the granular filtering you seek, and often more investments at any given time than any one crowdfunder. Where we differ from your vision is that our expectation is that once you find an investment that works, you will want to get to know the investment sponsor (or if you are raising the money, who is backing you), so we expect that there will be some time spent “getting to know you”. Where will you get that time? You will get it from the time you didn’t spend prospecting for that investment/investor, since our granular search takes just a few minutes. Crowdfunding is a great way to invest, too, just a different approach. They are investment sites and we are more titled to introduction. Have a look at RealConnex. Sorry to do two posts on RC, folks, I’m sure I broke some rule, but my comments are applicable to both Anthony’s great article, and to Antony’s query. If an issue, I’ll refrain in future.

    • Anthony Dominguez

      While I would love to see a Nasdaq for CRE like you are describing, I think that the market isn’t quite ready for it. Zethus intended to build just that and was backed by Goldman. They ultimately had bad timing but I also happen to think the execution is very complex. Targeting specific niches might be a better way to go. An asset class like NNN transactions are very simple comparatively.

  • Joseph Stecher

    Anthony, very thoughtful piece and Duke, thank you as always. Re Anthony’s observation: “I shouldn’t have to open LoopNet to manually filter and search. I should get a push notification when a deal meets my criteria and, oh look, I’m only three blocks away.” Realconnex.com has that very feature in our roadmap for mobile. Based on your permanent lighthouse search criteria, as well as whom you are following, you will get alerts as soon as you get off the plane, or out of your car, as the case may be. Got a free hour? Go see Bob’s project. With respect to James Milner’s comment, there are no specialized CRETech funds that I am aware of, but Trinity Ventures http://www.trinityventures.com/ and Thrive https://www.crunchbase.com/organization/thrive-capital are two that spend alot of time in our space. i don’t know that either is open to new investors, and my guess is that the minimums are pretty high, but you might search Angel List for specialty funds in our space. https://angel.co/funds

    • Anthony Dominguez

      Wow, I can’t wait to use your feature. I would suggest looking into a mapping API to then sort your tour by distance. That would be especially useful for markets I am unfamiliar with.