PropTech: Property Technology, the New Frontier of Real Estate, Part 2: Benefits

In Part 1 of our series, we introduced the concept of PropTech and how it is revolutionizing the real estate industry in innovative and unexpected ways. If you haven’t read Part 1, please click here.

In this part 2 of our series, we explore the benefits of PropTech both for companies operating in the real estate industry and for consumers of these products.

What are the advantages of companies implementing PropTech?

PropTech offers a range of benefits to owners, investors, real estate developers and those who create this technology. Benefits include increased commercialization of real estate assets (whether residential or commercial), licensing opportunities for integrated platforms, data collection and analysis, efficiency and environmental improvements, as well as social advantages.

Licence. Consumers in the residential and commercial real estate sectors demand new and innovative products, increasing not only convenience, but also their confidence and ability to stay safe in their homes, offices and public spaces. Real estate developers therefore have the possibility of integrating new innovative and practical PropTechs into their developments and improving the experiences of consumers in these spaces. These licensed technologies make developments more attractive; add material value and interest to developments while maximizing profitability for real estate developers and creators of PropTech. These technologies are delivered primarily through a SaaS model, allowing easy and instant access anywhere by developers, landlords, landlords and tenants. Examples include:

  • Locomobi’s solutions that integrate smart technologies for everyday amenities such as parking, tolls, transit and storage,[1] enable developers to introduce highly efficient and interactive Proptech into developments, while reducing costs and increasing security, ease of use and peace of mind;
  • Licensing smart home technologies to condominium companies or commercial owners allows for remote control of building functionality (e.g., temperature adjustments, locking doors and windows, detection of leaks / floor), which can lead to cost savings and environmental efficiency; and
  • Manage the rental relationship (in commercial and residential developments) through technology that enables more efficient communications, accessibility to key tenant and rental features (such as booking a conference room or room games) and increased functionality for billing, rating billing and related reporting.

Better return through data collection. The ability to collect and analyze data on a real estate project, from pre-construction to post-occupancy, provides businesses with the ability to improve and streamline future projects. Real estate companies are leveraging technology and data to deepen their relationships with their clients. With information on a project gathered in a single and accessible space, whether it is information on the sale of a residential house[2] or engage with a commercial space as an office tenant,[3] PropTech helps businesses find ways to save money and even reduce their impact on the environment. Other examples include ecobee’s smart thermostats that use technology to maximize energy efficiency[4] or Tread’s digital platform making it easy to move a construction fleet, while improving budgets and deadlines through data collection.[5]

Environmental and social improvements. Many consumers continue to seek streamlined services and luxury goods at reasonable prices. They are also increasingly socially aware; that is, more interested in the environmental and social impacts of their purchases, and willing to spend more to ensure that they reduce their overall impact. As such, business and personal consumers are increasingly investing in ESG (environmental, social and governance) initiatives, and PropTech innovation can be a growth engine in this key area. Examples include:

  • Carbon Cure, the insertion of carbon dioxide into concrete to reduce its carbon footprint;[6]
  • Large-scale residential or commercial developments incorporating PropTech focused on energy efficiency, such as smart lighting;[7]
  • Increased accessibility and removal of barriers for people with disabilities; for example, smart lighting allows visually impaired people to control and be aware of the lighting in their home through their smart device;[8] and
  • Ability of commercial property owners to achieve environmental standards such as WELL and LEED certification through the use of PropTech, increasing the attractiveness of their assets to tenants of the highest caliber.

This Part 2 of our PropTech series only discusses a few of the potential benefits of introducing and using PropTech technologies. This is a rapidly growing field and there will certainly be significant innovations and developments in the foreseeable future. However, PropTech is not without its challenges. In our next part 3 of this series, we will discuss several of the challenges facing everyone involved in the PropTech industry.

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