Last week we had the chance to catch up with Shaw Lupton, Senior Managing Consultant of CoStar Portfolio Strategy, on the latest episode of CRE Tech Talks.
During the podcast, Shaw addressed the red-hot topic of startup tech companies and how they are changing the CRE tech industry as well as what this means for property managers in CRE buildings.
In the CRE industry alone, we’ve seen an incredible uptick in the number of startups that have emerged. In less than 10 years the number of CRE tech startups rose from 176 in 2008 to 1,274 in 2017 according to Deloitte.
That’s a 623% increase!
There are really two sides to the coin when thinking about how startups are affecting the CRE industry:
1. Startups from all industries are affecting the CRE industry and property managers
These companies are changing the way tenants choose which buildings their offices are located in. Startup tenants want buildings that provide top-notch amenities so they can attract and retain top talent that is needed to advance their growing organizations. This challenges property managers to improve the amenities and the overall tenant experience to cater to these unique companies from the moment they enter the building.
2. How CRE tech startups are affecting the CRE industry
The rapidly growing number of CRE tech startups are all providing new technologies to manage different aspects of real estate that wasn’t possible just a few years ago. The challenge here for CRE professionals is evaluating which software is right for their organization and avoiding being overwhelmed by the potential of all the other solutions.
In the past, the real estate industry tended to be labeled a laggard when it came to technology and typically ignored by technology investors. But in the past few years the CRE industry has been turning heads because of recent innovations in the CRE tech sector.
In the podcast, Shaw hit on a few ways that startups are playing a major role in CRE technology innovation:
- Tech startups drive demand for digital connectivity
- Startups are attracting direct investment from large CRE firms
- The opportunity for the real estate community to partner with startups is bigger than ever
We think it’s particularly interesting for CRE leaders to keep an eye on which startups are partnering with bigger, more established companies. In fact, we are seeing requests form interesting startups to partner with us much more frequently today than in the past. Startups that take advantage of partnerships are the companies that will likely be the most successful – they’ll stay ahead of the curve, and continue to find new ways to gain a competitive advantage in their respective marketplaces.
Perhaps the road to success for startups in the CRE space is finding the right partner. We’ll have to wait and see.