Game Changers
July 22, 2015 • Although real estate industry professionals have been notoriously slow in adapting to technological innovation, newly emerging technologies are creating compelling opportunities for value creation that can’t be ignored.
Here are a few examples:
A New Way to Source Debt and Equity
For starters, crowdfunding technology platforms now enable real estate owners to raise money from individual investors that they did not have access to in the past. Likewise, new investment opportunities, such as the financing of one of the new World Trade Center towers in New York City and the refinancing of the Hard Rock Hotel in Palm Springs, are now available to those investors, who in the past would not have had access to these opportunities.
Crowdfunding investors pumped $1 billion into the US real estate market in 2014 and it is estimated that by the end of 2015 that number will be $2.5 billion, with investments starting as low as $100.
Hospitality and the Sharing Economy
Another technology-enabled innovation is Airbnb, an online platform that is revolutionizing where people stay when they travel. 500,000 or so Airbnb hosts have made their homes and other non-hospitality properties available to travelers. In New York City alone, 400,000 travelers chose Airbnb over a hotel during 2012 - 2013. In addition to displacing hotels, Airbnb is bringing tourist populations to residential areas outside traditional tourist locations, with serious implications for residential, retail, and hospitality real estate.
Project Management In the Digital Age
Global online marketplaces now connect real estate owners to building professionals. These marketplaces enable professionals, ranging from land planners to plumbers, to showcase their work, provide references, get tips on prospective projects and respond to solicitations for proposals, all online. Likewise, owners can publicize upcoming projects, obtain and level multiple bids, check references and hire the professionals they need with the flip of a few switches. Honest Buildings, one of these online marketplaces, has real-time information about 35,000 building service professionals and its matchmaking services have thus far resulted in $600 million of done digital deals.
Stay tuned as these and other emerging and evolving technologies increasingly separate future winners from the less fortunate in the real estate industry.