Commercial real estate embraces technology

Companies are working on technology to help improve the New York real estate market.

In the past six weeks, four real estate startups received more than $18 million combined to improve technology, especially in the commercial sector. The Wall Street Journal reported that the companies are View the Space, Honest Buildings, Floored and Hightower.

"These deals are not large yet, but it's indicative that the center is very likely to be in New York for this intersection of commercial real estate and technology," Susan Wachter, a real estate and finance professor at the Wharton School of the University of Pennsylvania, said to the news source.

The New York startup firms are capitalizing on the commercial real estate companies' relative reluctance to adopt new technology or seek to develop their own.

The Wall Street Journal reported that in the first nine months of 2013, venture capital investment in such firms was $11.62 million, but in 2012 as a whole, it was just $5.4 million. In 2011, $27 million was raised, so the industry is working to on a "two-year surge," the source said, and technology has changed a lot in that time, so the startups have a lot of innovation to capitalize on.

Big Apple innovation
View the Space raised $7 million from Trinity Venture to track and analyze leasing data for landlords and brokers in real time. Honest Buildings got $4 million for its planned online marketplace matching that will pair building services with property owners. With the $5.3 million that Floored raised, it will develop a technology to allow developers to create photographic, 3-D tours of spaces to put online. Finally, Hightower secured $2.1 million to develop mobile and cloud services to track and analyze leasing data in real time.

Some of the developers from these startups have experience ranging from straight technology companies to having held technology positions at real estate firms like Zillow, which means all eyes are on them to see what they develop for the industry.

"You need to understand real estate to have an offering that people want to buy," Stuart Ellman, managing partner and co-founder of RRE Ventures, an investor in Floored and Hightower, said to the Journal. "More and more people managing properties are becoming interested in using technology, but only where they have a real business case for it."

An Inman News columnist recently listed the top 10 commercial real estate technology trends that could make a splash this year, including:

  1. Big data
  2. "Internet of Things"
  3. Wearable technology
  4. Drones
  5. 3-D environments
  6. Maker movement
  7. App store optimization
  8. Beacon-based sensors
  9. Mobile video
  10. Bring your own device
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