13 NOV 2018
RICS included a series on proptech in our RICS Americas Summit Series 2018. It was a topic that drove a lot of discussion about how technology will influence the development and management of the built environment over the coming decade.
To continue to build on the interest in this topic, Robert Herman MRICS, RICS Chapter Committee member in Northern California is doing a series of interviews with venture capitalists that invest in proptech. Here’s the first of a series on proptech in California.
We caught up with David Goldberg, General Partner of Corigin Ventures to get his thoughts on proptech and venture capital.
Corigin Ventures is a segment of a broader holding company, Corigin Holdings, which has business both in venture capital and real estate, so we try and leverage our expertise, our network and our physical portfolio, which mostly comprises of student housing, multifamily walk-up buildings and Class A residential condos in New York, Miami and Brooklyn, California. Corigin focuses on how we live, work and play or on things that touch us on a daily basis by investing in technology to bridge those two divisions together.
We invest across sectors and across the entire stack of things that touch real estate. That being said, given our portfolio, we lean towards multifamily and residential properties. We have been really interested lately in what we call the utilization or the optimization of space, which can include the separation of the owner and operator of the space. This has happened in hospitality where most often the operator is separate from the owner of the building. We are starting to see that more with folks like WeWork and other co working providers. We believe that this will start to then come to retail, to branded residential living and to every other sector of real estate.
We think there are three trends that are coming in that timeframe.
One trend is branded residential living in which a third-party operator comes in and designs the physical space and builds a community around a niche demographic like millennials, families or baby boomers.
The next trend is more obvious - faster and cheaper construction. This can be modular building, 3D printing of materials or better work flows. Even things like getting the zoning and permit process right will help as we will see those becoming more automated and a little bit more data driven.
Then a third trend is the smart home. People have really been talking about it for years but we’re still at version 1.0. I think the next generation is a more a connected ecosystem where all our products speak to one another and are pulling in data and being a bit more predictive in their usability.
I'll try to pick three that have different markets and value propositions.
The first one is Latch, which a smart lock system selling to multifamily and commercial property owners and operators. Latch not only created an incredible user experience where you know a tenant can unlock their door or provide access to someone but they also provide a system for property managers and owners to better understand how their building is used and accessed. They are also heavily integrated into logistics like last mile delivery and just recently announced partnership with UPS and Jet.com
The Guild is an Austin-based company that turns apartments in multifamily and commercial buildings into tech-enabled distributed hotel suites, giving the visitor hotel-like amenities in their own homes or workplaces.
Third one is a company called Renovisto, a home renovation marketplace that connects labor, products and end-users, streamlining the entire experience.
There are two obstacles to adoption. The first one is that real estate owners have done pretty well certainly over the last decade so few owners are willing to take early risks and be first adopters of technologies. Their tendency to wait can stunt innovation.
The second obstacle, that we’ve seen over the last five years but is changing is the type of entrepreneur in this segment of the market. Five years ago, when we started investing in this space there wasn’t a lot of experience present, whereas now were seeing true entrepreneurs, those with real domain expertise, who are tackling the most important problems.
Innovation and technology can come in many forms and it doesn't take massive shifts in behavior to make a big difference. Simple automation and data-driven insights can be game-changers especially because of the size of the industry. If you can increase revenue or decrease cost by even 1 percent, the outcome can be pretty substantial.
By Robert Herman MRICS, RICS Chapter Committee Member, NorCal