THE PROPTECH GUIDE: EVERYTHING YOU NEED TO KNOW ABOUT THE FUTURE OF REAL ESTATE

By LAWIN CHANDRA

The PropTech Guide is designed to help real estate professionals face current and upcoming challenges in the industry through the use of real estate-focused technology, or PropTech. It provides hands-on and applicable solutions in the form of information about 222 companies providing PropTech to solve the everyday problems of mar

• Language: English
• Publisher: PropTech Asset Management
• Release date: Oct 1, 2018
• ISBN: 9781916479609

LAWIN CHANDRA

Technology evangelist, author, and advocate, Lawin Chandra has real estate and financial expertise and is devoted to excelling in these fields. With many years of experience as a property investment and real estate asset management expert, Lawin is passionate about PropTech, Smart Buildings, Smart Cities, Building Information Modelling (BIM), and the future of construction. He spends much of his time speaking and writing about PropTech and advising businesses on innovation and digital transformation. He has hands-on experience in developing digital strategies, driving innovation in the and real estate asset management industry, and is well versed in the disruptive effect of technology on the real estate investment world. As a means of helping others understand the complexities of the property industry, Lawin wrote and published The PropTech Guide, which showcases 222 innovative firms in PropTech in a single, informative volume.

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Published by

PropTech Asset Management LTD

17 Hanover Square

London

W1S 1BN

United Kingdom

www.PropTechAM.com

Table of Contents

1 - Introduction to PropTech

Real Estate Problems

Real Estate & Technology Expertise

PropTech Solutions

Transparency

Speed

Cost

2 - Match-Making

Marketplaces

Innovative Firms

3 - Finding the Money

Raising capital, the traditional way

Capital raising the digital way

Lending tech

Equity crowdfunding

Selling shares of existing properties

Mezzanine funding for developments

Innovative Firms

4 - The Transaction

Real estate transaction

Selling real estate

Buying real estate

Innovative Firms

5 - Getting Smarter

Asset management

Property management

Facility management & smart buildings

Smart home

Innovative Firms

6 - Construction

BIM & ConTech

Constructing the old way

The future of construction

Building Information Modelling (BIM)

Construction Technology (ConTech)

Innovative Firms

7 - The Future

The blockchain technology

Blockchain solutions for the real estate industry

Innovative Firms

8 - Conclusion

The growth of PropTech start-ups

The future of the PropTech industry

Further Information

References & Footnotes

1

Introduction to PropTech

When the wind of change blows, some people build walls, others build windmills.

–Ancient Chinese proverb

Real Estate Problems

The real estate market used to have a solid foundation and most considered it to be stable. A number of investment gurus considered an investment into a commercial or residential property as a safe bet in order to hedge against a volatile investment product. The stable rental income on a monthly basis gave a feeling of high security and stability, where future returns could be easily forecast and accurately predicted.

Today, however, real estate seems to have more problems than solutions, having caused a bubble and the ensuing financial crisis in 2008, and is now seemingly outdated, as old ways of doing things endure while technological advancements skirt the industry, to the industry’s detriment. Before the financial crisis, participants correctly assumed the underlying asset consisted of brick and mortar, but only a few participants questioned whether the tenant or occupier of the underlying asset was able to pay the rent, or able to repay the monthly mortgage. Researching the creditworthiness of a tenant or a borrower was and still is a rather difficult adventure to undertake. So many different intermediaries are involved in every aspect of a real estate activity, and little transparency is given.

There seem to be too many market players involved in a transaction, each benefiting from a lack of transparency that produces massive delays and very high costs. Just think about how many unnecessary market players are involved in such a transaction. There is a seller, his broker, the buyer, the buyer's broker, the buyer’s solicitor, the seller's solicitor, a notary, a mortgage broker, a bank, and the surveyor. And all these participants want to earn money by playing on their specialist knowledge, which they don't want to fully disclose to other players.

In most cases, these participants use software to become more efficient, but the software is proprietary and rarely compatible with what is being used by other players.

Real Estate & Technology Expertise

Before I get into my discussion of how to improve real estate operations, let me step back and provide a little insight on who I am and how I have come across my expertise.

For the last 15 years, I have been working in different industries, countries, and positions, where I was always questioning and improving the status quo of a situation.

One of my first jobs was to work for the large blue-chip company Electronic Arts, in Spain, which was and is still publishing the best video games of all time. The technology used for their software ten years ago is now translating into virtual reality and augmented reality used in real estate through off-plan project development presentations. I was involved in the development and management of the software globally.

The people I met broadened my network in the high-tech environment and strongly influenced my view toward the utilization of technology in other industries, such as finance and real estate.

When I graduated from a London university, I knew that Bloomberg provided the most-used data for investment banks and was in the forefront of delivering the best data.

I was then rather shocked when I started to work for Bloomberg in London and got my hands on a Bloomberg terminal and its interface. It reminded me of Microsoft DOS from the 1980s. This was a multi-billion-dollar company that was heavily investing in software development, and it was nowhere near to Electronic Arts’ software, or other software from start-ups. By working mainly with fixed-income clients lending to real estate investors, I have seen that the property industry can be entered easily by utilizing technology.

This is what I did, by starting my own real estate firm in Germany where I have used search engine optimization strategies to become top-ranked, generating new leads globally and selling properties using technologies only. My ability to use six languages probably helped. We produced real estate and virtual tour videos, advertised via social media, and sold properties without ever seeing or talking by phone with some of our clients—all by using technology and the newest software. We have outperformed market players with 50 years or more in the market.

Due to our innovative approach, we have been awarded with prizes from one of the top universities in Germany. We also had a tech lab in a start-up hub, which grew my network of programmers and full-stack developers. This has also accelerated the implementation of technology in our daily processes. At one meeting with a real estate client in our office, we were asked for a pen, but we had forgotten where we had stored them. We were using only iPads and DocuSign for contracts.

After five years, I received an offer from the largest housing association in Europe to use technology to optimize a large real estate portfolio. When I began in London, the residential portfolio was worth around EUR 60m, which I have optimized to EUR 70m and sold for around EUR 95m.

After that transaction, I worked for Europe’s largest and leading real estate advisory for construction and building engineering, where I was the head of real estate investment in London. I now have worked on transactions worth about $3.5 billion all over the world.

By collaborating closely with the in-house research and development department, we were able to consult on and develop the world’s smartest building, The Cube, in Berlin and develop the Amazon Robotics logistics center in Europe.

Apart from my ventures, I am heading the investment department of a very rapidly growing investment and asset management firm, where I am using my PropTech knowledge to increase the number of transactions, optimize processes, improve communication, and make our assets smart.

PropTech Solutions

PropTech is the abbreviation for property and technology and has been widely accepted as the synonym for the digitized and automation-focused transformation within the real estate industry.

So, even if it might never be possible practically, the ultimate aim should always be to try to replace all intermediaries with technology or digital solutions and make all software solutions compatible.

If you believe that this sounds a little bit like a utopian vision, just think about firms like HomeAway or Booking.com. A host in one part of the world advertises a property on a digital platform by answering standardized questions. The traveler or guest from a different part of the world searches for a property on the other part of the world by answering a similar questionnaire. An algorithm programmed by the developers of the platform matches the ideal fit. This platform then replaces the host’s broker and the guest’s broker and the solicitors, as the deal follows the firm’s terms and conditions. This strategy is possible because people are willing to use technology and travel globally.

If you now say this is possible for structures that can be standardized and pre-programmed, but is more difficult in a world where every property and real estate transaction is different, I fully agree. Every new situation is different and must be re-thought and tackled in a unique way. Therefore, human intervention is needed, as we can think through a problem to find a solution and optimize that solution.

However, we have reached the time where we are able to envision self-driving cars, and Google already is using artificial intelligence. Self-driving cars need milliseconds to navigate new and unknown situations and can recalculate a solution in every millisecond. Now that we have invented this kind of technology, we should also look for ways to use it in our real estate industry, even though it is making so much money that some think we do not need to experiment.

Let’s face it, and be more honest with ourselves: at the moment, it seems like everything is going well and we do not need to make any changes. Hence, we will not make any changes, as it can be difficult to adapt to a new environment.

But don’t be fooled. If you, as a real estate expert in your field, choose to not make any changes, recognize that someone else surely will make changes by trying to find a better solution to the same problems you face, and you might lose your job or competitive edge in the not-too-distant future.

This book is designed to help you face the current and upcoming challenges in the real estate industry globally, and provide hands-on and applicable solutions in

Reviews for THE PROPTECH GUIDE

[careerfittings · Rating: 5 out of 5 stars]

This book is a great precursor to the full-blown evolution of proptech globally. I recommend it for those who would want to take real estate operations to a new heigh. It is clear, instructive, and very realistic with examples and links to every type of operation described. It is a fully integrated book