Real estate firms, which have traditionally been slow to innovate, are beginning to embrace new technologies to find clever solutions to old problems. This newfound openness comes as millennials start to enter the workforce, creating a need for tools that appeal to a tech-savvy customer base.
“It’s pretty fascinating when you think about we’re 75 percent millennials in maybe a dozen years. Clearly technology’s going to have an incredibly important impact on real estate; the operation of real estate and what the tenants do and how they do it,” said Joel Marcus, the CEO of Alexandria Real Estate Properties, an REIT that specializes in science campuses.
Marcus was referring to predictions that millennials would make up 75 percent of the workforce by 2025. Currently, millennials, which include people who were born between 1980 and 2000, already comprise 40 percent of the workforce.
With young workers influencing the movement of property prices, real estate firms are changing course, and technology is starting to blanket all aspects of the business.
While recent advancements mostly targeted consumers with services like Zillow and Trulia, a number of tech start-ups are starting to tailor their services to help the brokerage side of things.
Engel & Volkers recently announced a partnership with AddressReport that makes data from millions of public documents available to potential customers.
AddressReport, which is like Carfax for real estate, provides unbiased reports about buildings and neighborhoods, thereby highlighting the positives and alerting users to possible warning signs.
To give both buyers and sellers a more complete view of the property, the service also provides notifications about upcoming changes that may affect its value, such as nearby property sales, school zone changes and local business openings.
AddressReport also has a feature that outlines the history of construction activity near the property, which can be explained in detail by an advisor from Engel & Volkers.
“Partnering with AddressReport allows us to assist anyone contemplating a real estate transaction before or after visiting the website. Data provides a solid foundation, and it’s our job to layer on the market knowledge and perspective that is essential to those contemplating a purchase or sale,” said Stuart Siegel, the president and CEO of Engel & Volkers NYC.
Another platform that leverages data for real estate transactions is ResiModel, a deal management, analytics and valuation platform that’s designed specifically for multifamily transactions.
The service, which combines underwriting with data visualization and analytics, claims to provide deeper insight into investment opportunities.
ResiModel, which recently introduced new features such as identifying rent trends based on floor plans and the ability to share deals, has gained the blessing of venture capitalists.
Earlier this week, the company announced $3.5 million in funding from former executives of Goldman Sachs and Deutsche Bank Real Estate.
“The real estate world has begun adopting technology solutions at a rapid pace, and ResiModel is poised to capitalize on this growing trend,” said Kurt Roeloff a former executive from Deutsche Bank Real Estate. ResiModel’s customer base includes deal teams from companies such as Cushman & Wakefield, Jones Lang LaSalle, ARA Newmark and Alliance Residential Company. To date, the company has analyzed more than 2,000 multifamily transactions. If raw data isn’t enough to sway a potential buyer, real estate agents now have a more futuristic trick to impress customers.
Floored, a New York-based startup, offers interactive 3D models that allow people to virtually tour spaces before they are even built.
The company, which counts Vornado and Sage Realty Corporation as its clients, converts architectural floor plans into interactive spaces. The models can be used with a web browser, a mobile device and an Oculus Rift virtual reality headset.
The experience is similar to exploring a role-playing video game; the space can be inspected freely and marked for certain points of interests.
However, the service is not just merely an expensive visual aid; it is also meant to boost marketing and sales.
Floored provides enhanced screenshots and “video flythroughs” that can be easily sent to clients online or embedded on a website.
The tool provides a new level of comfort in inspecting listings. Buyers can get an idea about the layout of the apartment just by exploring online; something that developers hope would translate into sales without physical visits.
While 3D models represent a new way of doing business, some factions in the real estate industry are using technology to prop up old strategies.
A brokerage team at Douglas Elliman Real Estate recently announced a partnership with beauty and wellness app PRIV.
The firm’s Jacky Teplitzky Team organized a broker open house at the penthouse of 205 East 59th Street, a three-bedroom condo listed at $7.9 million. The people in attendance were given free massages, manicures and makeup touchups through the app.
“I’m always looking to make some noise in the real estate industry, and I knew that teaming up with PRIV would be a great way to differentiate my team’s events from the traditional wine and sushi open houses,” said Jacky Teplitzky, licensed associate real estate broker at Douglas Elliman.
“We decided to work with PRIV because our clientele aligns with theirs – we both work with upscale clients who lead busy lifestyles, so multitasking is a must for them. With this new partnership, we can provide our clients and peers with the well-deserved chance to relax and pamper themselves as they tour our luxury listings.”
PRIV launched in Manhattan in March 2014 and has since grown to include operations in Los Angeles, Austin and London. The app seeks to continue its expansion both nationally and internationally.
“PRIV is a service platform, and the best way we’ve found to connect with our audience first-hand is to actually allow our potential clientele to experience it,” said Courtney Jerden, executive vice president of PRIV.
“By partnering with teams like Jacky’s, we’re able to increase awareness while providing a fun, out-of-the-box experience that is atypical of your standard open house.”
The increasingly warm relationship between technology and real estate goes beyond one-off partnerships and deals. Perhaps the best indicator of this is the attractiveness of tech startups to venture capitalists. Last year, real estate technology startups generated $605 million in funding, up from $241 million the year before.