What Role Does Tech Play in CRE?
Block chain, technology in brokerage and technology use by landlords were the hot buttons of conversation during the two-hour presentation by some of CRE’s best and brightest last week.
SAN FRANCISCO—Three topics were covered in last week’s CRETech event held at BeSpoke Coworking at Westfield San Francisco Centre. Block chain/tokenization, technology in brokerage and technology use by landlords were the hot buttons of conversation during the two-hour presentation by some of CRE’s best and brightest.
Fifth Wall co-founder and managing partner Brad Greiwe chatted with Josh Stein, CEO of Harbor, about the pioneering startup and its blockchain platform. Harbor is the compliance platform for tokenizing private securities such as real estate, company equity, investment funds, fine art and other industries. The platform is launching in the US in late summer and will be offered in seven countries.
Stein indicated that 75% of Harbor’s inbound interest is from commercial real estate, specifically, owners of trophy assets. Harbor has a focus on institutional players, followed by middle tier, he said.
“Basically, you have three options: lever up, sell or take on minority investors, but with electronic syndication, you can broaden your investor base. Tokens unbundle and rebundle ownership,” Stein observed. “You can raise capital for multifamily projects or affordable housing that is so needed today; that is, investing in neighborhoods.”
The Jobs Act 506c opened up this type of investor solicitation and Stein confirmed that all pertinent regulations have been reviewed with the securities and exchange commission. Security is ensured with closed APIs, properly license traders, and three types of keys: owner, issuer and Harbor.
Stein said this type of syndicated real estate will allow building of assets but it is one of many.
“It’s not winner take all,” Stein cautioned. “No one will own it all. There will be a ton of players. Harbor is simply a platform.”
Pierce Neinken, global portfolio manager of Airbnb, moderated the brokerage panel with panelists, Sohin Chinoy, vice president of strategy and business transformation of CBRE; Andrew McDonald, president, west region of Cushman & Wakefield; Andy Poppink, president, west region of JLL; and Jake Edens, senior vice president of technology and innovations at Colliers. Neinken began by asking what role technology plays in each company.
Poppink said JLL is going to be a technology company due to three areas: leadership and its belief in technology, a $100 million fund for technology and the JLL Spark program, and the structure to nimbly address issues. But, he admits going through growing pains.
Other companies are adopting in their own ways and timeframes. For example, Chinoy said CBRE is focused on technology in a measured way. The company is looking at the must-haves on a case-by-case basis with this equation: time to market, unit costs and risk level.
Cushman & Wakefield takes a similar process, McDonald said.
“We are more advanced with technology than we give ourselves credit for, i.e, our sales process is digitized,” he said. “I wouldn’t sell us short on adoption.”
Edens said Colliers’ entire leadership team is on board with regard to technology. The company operates like a start-up, building partnerships to illustrate what is going on with technology. And, its R&D/innovation team has an adoption view requiring creation of value and better service to clients.
“It must align with the corporate plan,” said Edens. “We look to get out of silos and ask ‘how does it fit in the larger picture?’”
The landlord panel was led by Jak Churton, managing director of JLL. The speakers were Breton Birkhofer, innovation lead at Prologis; Josh Raffaelli, managing director of Brookfield Ventures; Matt Griffin, senior vice president of Kilroy Realty Corporation; and Ryan Salvas, vice president of real estate technology and innovation at Equity Office, now known as EQ Office. The role of technology is being played in a variety of ways at these companies.
Birkhofer said Prologis is digitizing assets and supply chain components, using technology in last-mile delivery services, and looking at pain points in order to be a strategic technology partner. One example is the use of the Airware enterprise drone company to provide analytics and automation.
Salvas said EQ evaluates new technology that is relatable to users and has market intelligence components, in other words, slicing and dicing the data to “make it meaningful”.
Griffin said Kilroy is taking a look at its internal operations to ensure all components talk to one another and tracking demographic data on users.
Raffaelli said Brookfield is targeting relevant technology companies as a natural funnel and is laser focused on Series B opportunities and beyond.