Last year was a banner year for commercial real estate technology. If you missed the highlights, get up to speed here, here and here. Then 2016 arrived, bringing signs of distress in global capital markets and questions about the impact on commercial real estate. The multifamily sector and development in major downtowns appear strong, but growth elsewhere verges on stagnant.
How will nascent turbulence in the industry impact CRE tech in 2016? Here are thoughts from five industry leaders on where CRE tech is most viable and where it might stumble.
#1: Investment in CRE tech is surging around the world
According to CB Insights, a leading aggregator of venture capital activity, CRE tech startups raised $1.7 billion in 2015. CB Insights predicts that investment in 2016 will exceed even that record-breaking amount.
#2: The rise of autonomous cars and cashless transactions will alter all aspects of real estate
Christopher Lee from Los Angeles-based real estate strategy firm CEL & Associates believes the same technology and innovation reshaping how society organized itself will also reshape the built environment. He provided more than two dozen predictions at a conference at the Alabama Center for Real Estate in January that the industry should seriously consider.
#3: Virtual Reality is Going Mainstream in Real Estate
When project development can take years, any opportunity to get to completion faster is a boon. Goldman Sachs predicts that virtual reality will become an $80 billion over the next 20 years. Real estate is an obvious end user for the technology and new startups are popping up around the country to satisfy the demand.
#4: Commercial Real Estate Data is Open and Game-Changing
Anyone ever tasked with the job of preparing reports for the industry's standard "Monday morning status meetings" can appreciate the significance of having manipulable, normalized data available in real time. CRE guru Duke Long recently did a deep dive into the potential for open data and he concluded, "Just look at the stock market. Commercial real estate data is no different. If you are in a position to manage the data in real time and don’t…resign!"
#5: The Center of CRE Tech Continues to See Strong Funding Activity
The Commercial Observer reports that New York City, aka "Silicon Alley," saw CRE tech investment increase 21% from 2014 to 2015. That being said, CO seems less bullish on the growth of commercial real estate technology this year—even suggesting an impending correction that could be disastrous to newly-formed startups.