Real Estate Technology



The corporate real estate market seems ripe for disruption. Of course, key players don’t want Internet apps sharing information with office managers on how much their competitors paid per square foot. Commercial brokers don’t earn commission in the same way residential brokers do, so relationships and proprietary information continue to drive deals. So it’s easy to see why some express reservations about technology.

“I’ve seen companies try and disrupt the commercial real estate business, but not one has succeeded yet,” says Elliott Warren, a licensed commercial real estate broker at The Kaufman Organization, a New York City-based commercial brokerage.

No Shortcuts

In recent years, 42 Floors came closest to competing with the legacy Costar, an MLS system that’s been used for decades. However, even with the offer of free photos of each space, it shifted direction, leaving Costar as the dominant player in finding properties.

So, that leaves more traditional methods of gaining market intelligence as most effective. Warren explains how he follows the news about mergers, acquisitions and venture capital to find clues about companies that might need new office space. There’s no big data to search, and he does the legwork himself. Sites like TechCrunch and Mashable often announce big deals, especially in the tech space.

A brief phone conversation with Ike Chera of Crown Acquisitions brings out a similar conclusion: the dominant players in commercial real estate are not focused on technology.

“If it’s not broken, let’s not fix it,” Chera explains. Rental rates can vary widely between storefronts, and it’s difficult to find out prices since landlords aren’t required to list what the last tenant paid. Chera invests a lot in market research, including sending people out on foot to get a feel for the market.

Finding Tech’s Opportunity

But, Chera believes there is room for technology to improve the real estate industry. It’s just a matter of finding the right opportunity.

“The market is wide open for any product that would facilitate the flow of information with a client. Any kind of tracking tools, databases, or analytics software that could project future rents and incomes would be valuable,” he says.

Construction management is another area ripe for innovation. Creating a platform to allow clients access to the process would add value. The best option, according to Chera, could track progress from building permit through completion.

Like Chera, Warren has some ideas about what would make his job easier.

“I’d like to be able to track when companies get funding, a tool that would help identify opportunities,” Warren says.

For now, the tech companies catering to commercial real estate have yet to disrupt the industry, the way they have in the residential sphere. Yet, there have been successes. Companies like WeWork, At The Yard and The Grind  have created technology that supports short-term, flexible lease situations, and co-working spaces. They sign long term year leases and then outfit the location, alleviating the pressure of finding decent office space for startups in New York City.

Chera and Warren both believe there’s plenty of opportunity to enhance the corporate real estate market, if not disrupt it. It’s just going to take the right mix of opportunity and insight from the tech sector.

The Real Estate Players

Ready to jump in to the commercial real estate tech space?

Here’s a list of current players, catering to both residential and commercial markets:

42 Floors – listings for office and co-working space

Lovely – app that lists apartments for rent by owner

Compstak – database of commercial lease comps

Hightower – end-to-end asset management, and leasing platform, includes tenant tracking

Honest Buildings – commercial real estate marketplace that matches building owners, decision-makers and project managers to top building professionals

Urban Compass – helps people find the right NYC neighborhood/apartment

View the Space – cloud-based leasing and portfolio management company, currently hosting 850 million square feet of NYC office space

Realty Shares – real estate crowdfunding platform that enables investors to purchase shares in private real estate investments

Storefront – provides listings for retail stores, fairs, markets, shopping malls and more

Street Easy – free map and photo search of NYC residential real estate

Zillow – online real estate database featuring residential listings

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