Here’s an astonishing statistic from Ashkán Zandieh, chair and founder of the Center for Real Estate Technology and Innovation (CRETI) in Dallas: Year-to-date, approximately $1.5 billion in venture capital has gone into property management technology. That’s a 138 percent increase over the same period last year.
Property managers have discovered the benefits of tech-enablement, thanks in large part to the demands placed on us by our tenants, residents and clients due to the COVID-19 pandemic. We saw the management industry skip years ahead within a few months.
(Full disclosure: I had the pleasure of joining Ash recently in a special CRETI webinar entitled, “The Future of Property Management in the Age of Technology.” It was a lively conversation, in which we covered the current tech landscape and the outlook for property managers. And excuse the shameful plug, but free replays are available here.)
It has often been said that prior to the pandemic, real estate—and real estate management in particular—lagged other industries in its embrace of technology. While there is some truth in that, it’s also clear that in some ways, proptech companies weren’t tailoring their efforts to holistically serve our industry’s needs. As Ash’s statistics prove, that’s clearly changing, and property managers, now armed with digital solutions to both new and age-old operational issues, have been responding.
I’m proud to be part of a profession that was so quick to rise to the unprecedented challenges of the pandemic and embrace the technological means to do so, be they virtual tours, online rent payments and leasing, touchless technologies or a host of other applications. Of course, these technologies were around in one form or another well before 2020, but advancements in the industry’s willingness to adapt is a testament to evolution through necessity.
We should note here that there’s not a dollar-for-dollar transition of all that VC funding into practical applications, and the mandate for tech enablement isn’t the same for everyone. As Ash points out, there’s a bifurcation of need and ability.
“It comes down to organizational structure,” says Ash, pointing to the fact that not every real estate manager is part of an institutional firm with a vast number of properties under management and deep pockets for technological experimentation. In fact, a substantial number of managers—both on the multifamily and commercial end of the industry—represent smaller properties or portfolios.
And yet, the focus on technology is—and always has been, it seems—on “bigger, better, and faster,” according to Ash. “But is 5G vital to the operation of my asset? Is artificial intelligence? Maybe not in a 10-unit building.” Indeed, while these are important advancements with an important contribution to make, they might not be necessary in every circumstance.
No matter the size of the management organization, we cannot lose sight of the fact that we are in the business of taking care of people. So yes, while we’ve made fundamental shifts in the way we conduct business, advancing software and systems should be recognized as less of a “technology play” and more of a “change management” play.
And we should pause to ask where the demand for new technology is coming from. I’d suggest it isn’t only about optimizing efficiencies from the management companies’ perspective, but it’s also an expectation of our customers and how they prefer to do business.
We can all recall a time not too long ago when many in the real estate management industry were proclaiming that with the rise of so many digital capabilities, their property management or real estate companies were being transformed into tech companies. I agree with Ash that this was a very narrow view of things. Technology is not the goal, and it’s not the end game.
The goal is this: To free up time from performing repetitive, administrative tasks (busy work), and allowing people to spend more time on higher value activities. In other words, utilizing tech applications (available at price points that will not break the bank) to perform the “back-of-house” tasks and “busy work,” while allowing your people to provide—and their customers to enjoy—exceptional experiences.
Technology certainly has a vital role to play in so many areas, from security and energy control to the operational efficiencies that can bring value to a property or a portfolio. But we need to reverse the trend of people serving technology, and reset our expectations so technology exists to serve people … to make the world better for people.
Barry Blanton is the 2022 President of IREM. In addition, he serves as chief problem solver and a founding principal of Seattle-based Blanton Turner.