Featured on this episode: Steve Weikal, Head of Industry Relations at the MIT Center for Real Estate.
Earlier this month, we had the pleasure of attending the CREtech conference 2019 in New York as an official media partner, and interviewing some of the leading voices, innovators and disruptors in the Real Estate Industry.
Steve Weikal is Head of Industry Relations at the MIT Center for Real Estate, responsible for managing relationships between the Center and its global network of industry partners and nearly 1100 alumni of the MIT Master’s in Real Estate Development (MSRED) program, in 46 countries. He is also a lecturer and researcher, and the CRE Tech lead in the MIT Real Estate Innovation Lab, focused on innovative new technology and business models that disrupt the traditional ways of developing, transacting and managing real estate.
Steve was the Founder of MIT Real Disruption, a successful series of conferences discussing the impact of emerging technology on the real estate industry that is now part of the international CREtech conference platform. He is a member of the CREtech Leadership Board, and sits on the advisory boards of three real estate technology start-ups. Steve has spoken extensively about real estate technology at conferences for AFIRE, ULI, IREM, SIOR, CCIM, CoreNet, ICSC and BOMA, and has been quoted by numerous media outlets, including BuzzFeed, TechInsider, the Boston Globe, GlobeSt. the Real Reporter, Travel Weekly, IPE Real Assets Europe and Anuario Inmobiliario LatinoAmerica.
Steve holds a Master’s of Science in Real Estate Development (MSRED) and Master’s in City Planning (MCP) from the Massachusetts Institute of Technology, and a law degree from Suffolk University Law School. He is a licensed attorney, a licensed real estate broker and a LEED Accredited Professional.
Also featured on this episode:
Karen Hollinger, Senior Vice President, Strategic Initiatives, AvalonBay
Karen Hollinger is Senior Vice President, Strategic Initiatives and is responsible for leading large strategic corporate initiatives. She also is point on innovation initiatives in development, construction and property operations and for venture-capital investment.
Prior to AvalonBay, Ms. Hollinger was a Senior Manager at KPMG, with a partnership focused on accounting systems and IT strategy with clients in the US and in developing countries. As part of this position, Ms. Hollinger started and led KPMG’s IT consulting practice in Beijing, China and led other long-term technology strategy engagements in Guam, Mexico, Kazakhstan, Bosnia, Thailand and Georgia.
MJ Cootsona, Co-Director, Real Estate & Construction, and Kia Nejatian, Senior Ventures Associate – Plug and Play
Plug and Play is a seed and early-stage investor focused on great teams leading emerging growth companies. Plug and Play runs 12 industry-specific accelerator programs twice a year, that acts as a platform for major corporations and high quality startups to connect and collaborate.
Located in the heart of Silicon Valley, Plug and Play participates in Seed, Angel and Series A funding where they often co-invest with their strategic partners. Through years of experience and as part of their network, Plug and Play has put together a world-class network of serial entrepreneurs, strategic investors, and industry leaders who actively assist the firm with its successful and growing investment portfolio.
Minta Kay, Partner, Chair, Real Estate Industry Group – Goodwin
Minta Kay is a partner in and chair of Goodwin’s Real Estate Industry group and a member of its Real Estate Joint Ventures, Real Estate Finance and Hospitality & Leisure practices. For more than 28 years, Ms. Kay has represented institutional investors, tax-exempts, real estate funds and owner/operators in connection with all aspects of their real estate investment transactions. She regularly advises clients on joint venture formation and restructuring, senior and junior debt origination, acquisition and restructuring, portfolio transactions, development transactions, and property sales and acquisitions. In the past five years, she has closed over 55 transactions totaling in excess of $8.5 billion.
Minta is also a leader in Goodwin’s PropTech Initiative, which is focused on supporting the intersection of Real Estate and Technology through thoughtful collaboration across the two practice areas. As a key member of the PropTech Steering Committee, Minta is responsible for driving strategy across the two groups to effectively support clients involved in the emerging subsector. Some of these initiatives include participation in key industry events, providing thought leadership, and offering important client service initiatives to empower investment and growth across both markets. Minta’s keen understanding of the importance of connecting real estate and technology clients, paired with her collaborative nature, allows for even more natural synergy between these two practices.
RealCrowd – All opinions expressed by Adam, Tyler and podcast guests are solely their own opinions and do not reflect the opinion of RealCrowd. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. To gain a better understanding of the risks associated with commercial real estate investing, please consult your advisors.
Steve Weikal – It’s no longer a problem that we don’t have enough data, now we have too much, arguably, and so we have to figure out what to do with it and how to make it profitable, how to make decisions, and then how to maybe, the industry at some point is probably going to have to decide on a common vocabulary for data and what we do with it, how we do with it. Not just standards, not just data standards, the kind of nuts-and-bolts of data standards, but the common vocabulary that I think would make all of us, it would benefit everybody in the industry.
Adam Hooper – Welcome back, listeners, to episode three of our 2019 CREtech coverage where we came to you live from Dock 72 in Brooklyn, New York. A line-up of powerhouses today, we start the conversation with Karen Hollinger, SVP at AvalonBay. Then we talk to Kia and MJ at Plug & Play Ventures to talk about their take on where they play in the prop-tech space. Followed by Minta Kay at Goodwin who most of you listeners will recognize from our prior prop-tech series with the folks at Goodwin. Round out the episode with a great friend of the podcast, Steve Weikal, head of Industry Relations at the MIT Center for Real Estate. Fantastic episode today, I hope you enjoy it, we’ll get started with Karen Hollinger at AvalonBay. All right, Karen, thank you so much for joining us today here on the show at CREtech 2019.
Karen Hollinger – Thank you for having me.
Adam Hooper – So you just finished your panel.
Karen Hollinger – Yes.
Adam Hooper – Why don’t you tell us a little bit about kind of your background, a little bit about AvalonBay and then maybe just some of the high points from your panel discussion?
Karen Hollinger – Sure, so I spent about 10 years in consulting, most of that in third-world countries, prior to joining AvalonBay. I’ve been with AvalonBay now for 18 years in various operations and technology roles. Mostly focused on innovation and large project management.
Adam Hooper – Okay, so what countries were you in, I’m curious?
Karen Hollinger – Kazakhstan, Kyrgyzstan, Bosnia, Croatia, Thailand, Turkey, Mexico, Guam, Japan.
Adam Hooper – All over.
Karen Hollinger – All over, so 10 years with a P.O. Box for my home.
Adam Hooper – Yeah, and so how is that global experience kind of informed what you do today?
Karen Hollinger – Well, I hate to say it in an overly simplistic way, but working in the U.S. is quite easy. So it’s given me a refreshing perspective on how easy it is to operate in one language, in one currency, with one general culture and driving force.
Adam Hooper – Yeah, so AvalonBay?
Karen Hollinger – AvalonBay, one of the largest…
Adam Hooper – Large company.
Karen Hollinger – Very large, one of the largest multi-family owners and operators in the United States. Just shy of 90,000 units in operation or in development, all U.S. based, high barrier-to-entry markets, generally West Coast, East Coast, Colorado and Florida.
Adam Hooper – Okay, so one of the things that we’ve talked about with guests here today and we’re kind of hearing throughout and I’m obviously interested as well in the real estate tech world now for six-and-a-half, seven years, is the role of where investments are coming from? Right, and so operators, managers, returning venture-investors, whether that’s making direct investments or through fund vehicles, you know how did AvalonBay look at getting into that investment side and how has that landscape changed the last handful of years?
Karen Hollinger – Well it is drastically changed. We are public, so obviously we are not going to be making investments for the investments sake, we are going to be making investments or looking at technology primarily for use in our own portfolio, in order to increase revenue, lower opex, increase customer service. So it is an ancillary business to the primary real estate business, it has to be accretive. So there are others I think that are investing primarily for returns, and of course we all want returns.
Adam Hooper – Of course.
Karen Hollinger – But the greater good of these investments is going to be for our base operations.
Adam Hooper – So the primary motivation, that’s what we’re kind of trying to get to, is looking at the motivations of that, again, real estate operator turned investor, it sounds like in your case it’s more, is it accretive to…
Karen Hollinger – To the operation.
Adam Hooper – To the operations?
Karen Hollinger – Is it accretive to the asset or the operations? Rather than, we’re also looking for things that move the needle and I would say unfortunately there’s not a lot that moves the needle. And part of that has to do with our scale, so if there is something that should have been automated, we did already, where maybe someone that was five or ten-thousand units, probably could have never automated something like customer relationship management. They just couldn’t have, they didn’t have the tech background. But with 140-150,000 residents…
Adam Hooper – Or resources to build that scale, right?
Karen Hollinger – You just wouldn’t have had the resources. So in many cases we’ve already automated a lot of the technology that is on the floor, we sort of had to, right? You’re forced to, so our focus has been on technology that is truly additive to the business and something that we couldn’t have solved on our own.
Adam Hooper – Right, and so are most of the technologies that you have seen or are seeing or exploring, are they more incremental improvements to operations or are there some actual like step-change kind of technologies that have an exponential impact on the operations or is most of that kind of low-hanging fruit that’s already been realized?
Karen Hollinger – I would say that most of it’s been realized for us. So I keep a running list of all the new-cos that I vet, and usually that’s a 15 or 30 minute demo or meeting and in the last year I vetted somewhere around 250. And there have been seven that were worth going to pilot and I would say there’s less than three, maybe there’s two, that have truly moved the needle, and not something we would have come up with on our own, not something we would have funded on our own. So there are less technologies being funded right now that are truly, monumentally changing the business.
Adam Hooper – And is that a function of the scale that you guys have already achieved or is that a…?
Karen Hollinger – I think it’s a little of that, but not so much. I think, I think it’s easier to give two million out, right? There’s a lot of seed investments going out and if I think about investments that are fifty-million-dollar VC investments, Modular, as an example. There are less of those plays being made right now, so that means there’s less supply in the market to be able to build in a modular fashion. That’s an example of a technology through robotics that would meaningfully move the industry, which we wouldn’t invest in or create a modular building company on our own, but the VCs have less appetite for those types of fifty-million-dollar checks.
Adam Hooper – Yeah, that is interesting, do you feel that the smaller-scale operators, and again it sounds culturally ingrained in AvalonBay that technology innovation is just a part of how you guys run the business.
Karen Hollinger – It’s always been a part of how we do business.
Adam Hooper – So some of the smaller regional managers, that maybe again don’t have that many units under management there is still some ability to bring in opportunities.
Karen Hollinger – There is, there’s a lot of opportunity there. I think it’s going to be harder though, everybody on the showroom floor wants to sign less deals for more units, right, that’s the goal. Right, I don’t want to sell 100 times for 5,000 units, I want to sell four times at 50 or 100,000 units. But there’s less opportunities in the bigger plays.
Adam Hooper – So what takes a company’s, from a technology side, what allows that company to get to a scale or is there always going to be some reliance on kind of the human component of the industry, again and real estate is still very much a people, person-to-person relationship business, right?
Karen Hollinger – It is. It really, really is.
Adam Hooper – So how much is the technology removing the human component of that or is it making it, is it kind of augmenting the human component, how do you guys look at that?
Karen Hollinger – I think it depends, right, I have two sons, under the age of 20, who both have had cell phones since they were 10 and have never setup their voicemail.
Adam Hooper – Hopefully my daughters don’t hear this because they’re begging for their first phones.
Karen Hollinger – Yes, but neither have setup their voicemail, neither want to talk to me, I hate to say it. They will text with me all day long. So when I recently searched for an apartment for my son, he was disinterested in the process. He created a radius of one mile from his campus and he said, “Whichever apartment community you want, Mom.” I wasn’t about to drive five hours to go tour those apartments, so I went online, I looked at the pictures, I pretty much picked one based on pictures, location and brand, and I signed the lease remotely. So even though I’m not the younger demographic that is willing to do it sight unseen, I’m the mother of the demographic that is willing to do it sight unseen.
Adam Hooper – And you still did it sight unseen.
Karen Hollinger – And I still did it and so I think that there are a cohort of customers that are perfectly happy doing things in an automated fashion without a person to tour them. And then there is another group of folks who are going to be very high touch, who will want to think about how the bed is positioned in the room before they sign a lease.
Adam Hooper – Sure.
Karen Hollinger – And they will measure, right? So I think that technology can heavily augment the experience, it can’t replace it completely.
Adam Hooper – Yeah. I think it’s interesting too, you know the kind of app ecosystem that we live in, the user experience of these technologies is just so seamless, so easy, so intuitive, and then you try to do something in the real estate space, and it’s just not.
Karen Hollinger – It’s not, it is not.
Adam Hooper – So I think the expectation of how we interact with technology in all other facets of life, whether it’s in fintech or you know just entertainment, whatever it might be, it’s so frictionless,
Karen Hollinger – Right.
Adam Hooper – That I think there’s still a lot of room for innovation in our space.
Karen Hollinger – I totally agree, totally agree.
Adam Hooper – So what are some of those things that you guys are seeing, if we can’t get in too deep, of things that you guys are looking at that are interesting, I’m just curious what are some of those technologies that you’re looking at?
Karen Hollinger – Sure, I talk about one in particular, where we recently rolled out AI, through the portfolio to augment our leasing, so if you want to ask a question at midnight, which a lot of people do.
Adam Hooper – Yep.
Karen Hollinger – And at midnight, you know really what they’re asking is, “Do you have a one bedroom available in this rage, for this price?” Right, they’re not yet to the point of measuring the bedroom wall for their bed, right? They just want to know the basics.
Adam Hooper – Basics, yeah.
Karen Hollinger – So that they can start to narrow their search. So recently implemented AI for that and so the AI engine will answer that question at midnight and does it quite well, which relieves our long-term associates to be able to provide a higher touch.
Adam Hooper – Right, and that’s again another theme we’ve kind of been talking about is AI, machine learning, there’s some kind of behind-the-scenes work that a human used to have to do.
Karen Hollinger – That’s right.
Adam Hooper – That can now free that human up to do those more relational things.
Karen Hollinger – That’s right.
Adam Hooper – To have that touch, so it kind of frees the grunt work, if you will, and allows for more engaging conversation, allows for more, a better relationship, which again I personally don’t think that’s ever going to go away in the real estate space, I think it’s you know, how can we implement these technologies to change the nature of that relationship right, to make that a more meaningful relationship, I think that’s how you keep your tenants happy and keep them coming back.
Karen Hollinger – That’s right.
Adam Hooper – Well, thank you so much for joining us on the show. I hope you have a great rest of your day and conference.
Karen Hollinger – Thank you.
Adam Hooper – Thank you. Next up we talk with Kia and MJ from Plug & Play Ventures and where they fit in the prop-tech universe and how the innovation journey overlays on the real-estate technology cycle and where we’re at today. Kia, MJ, thank you so much for joining us today, here at CREtech, 2019, from Brooklyn. I hope you guys are having a good conference so far?
Kia – Yes.
MJ – Yeah, it’s been fantastic.
Adam Hooper – Yeah, a lot of people here.
Kia – Oh my God, it’s amazing, yeah.
Adam Hooper – Very good, well Kia, why don’t you tell us a little bit about maybe your background first, how you got involved with Plug & Play, what you guys do? And then MJ, we’ll hear from you as well.
Kia – Sure, absolutely. I actually started my real estate career with my dad, when I was a teenager. He’s a real estate developer so I used to go on his construction sites and kind of learn what he’s doing. And then when I was in college I actually cold outreached, at the time, my boss, who was a property manager and he specialized in premium student housing. If you’ve ever been to Kingston, Ontario, you’d understand what I’m talking about. It’s all run-down homes, anyway, so I worked with him during the couple years that I was there, and then after I started working for the mayor of Toronto, and during this time I was working on the planning and growth policy file which really is a committee that reports in to city council. They’re job is essentially to make recommendations as to how the city should support the growth in terms of real estate infrastructure. After that I moved over to a commercial real estate brokerage, it was a boutique brokerage, representatives called Real Facilities. I was a real estate analyst there for about a year-and-a-half, before they got acquired. Then I moved to California and for three years, from 2015 to 2018, I led the business development efforts for a fintech startup called Kash. Then they got acquired as well,
Kia – so then I moved to Plug & Play. MJ and I actually met at Plug & Play, we were hired to launch the real estate and construction platform at Plug & Play. So I guess this is a good segue to kind of explain what we do at Plug & Play?
Adam Hooper – Yeah, why don’t you tell us a little bit about what you do first, I know Plug & Play has a pretty unique take on their role in the ecosystem, so definitely want to dig into that, but MJ, why don’t you tell us a little bit about how you got involved?
MJ – Yeah, absolutely. So very briefly I was, I’ve been in real estate basically my whole professional career, but before I was at Plug & Play I was a residential realtor in the Bay Area. So helping with the traditional, buyer-seller transaction management, but on top of that the team that I was on was also part of the agent advisory board at Zillow. So through their exposure to that I was involved in a lot of the traditional real estate side, but I also got exposure to the technology side of real estate. So with that I was able to beta test products and really work with Zillow’s technical team and what solutions work for their real estate platform and so that was kind of this interesting mixture of traditional real estate mixed with real estate technology just at the time this whole industry was starting to evolve and become a real thing and during that same time, Plug & Play was also thinking about a real estate program, the Real Estate and Construction Tech program that I work on now. So it was this very serendipitous, stars-aligning moment where we both met on this and it really worked out well because that was around the same time that I was looking for something else to do and it just really worked out and about a year-and-a-half ago we started this platform.
Adam Hooper – Perfect. Okay, so now tell us, Plug & Play, different approach than what we typically see in kind of the VC, Sillicon Valley space, so how do you guys kind of fit within this ecosystem of prop-tech?
Kia – Sure, I’ll kind of explain now what we do, it’s essentially, Plug & Play is, we look at ourselves as the world’s largest, innovation platform. So essentially our business falls into three pillars, venture capital, corporate innovation and business development accelerator programs. So when it comes to venture capital we’re one of the most active investors in Silicon Valley, we do over 200 investments a year, pre-seed, seed, sometimes Series A and we invest across 15 different verticals, anywhere from IoT to mobility, to food-and-beverage, new materials, and obviously MJ and I run real estate construction. Corporate innovation, we work with 300 corporate partners, names you’re very familiar with, anywhere from Prologis to Cushman & Wakefield, to Samsung, to Diemler. What we do essentially is help our partners stay ahead of the innovation curve, by, we do anything from introducing them to tech that can help them address their own pain points, or to connect them with veteran corporate partners who’ve already gone through their innovation journey, the beginning of it, which is really, really the hard part, so they can learn from one another. And lastly we have a business development accelerator program which is very different than what most people are used to because our program is A) Completely free, there’s no equity exchange. B) It’s stage agnostic, it doesn’t matter how much money you’ve raised, how big you are, really the purpose is for the batch companies to leverage the network of partners that we have for business development and strategic partnerships, that’s our forte,
Kia – is business development for strategic partnerships.
Adam Hooper – Yeah, that’s something we’ve talked about a few times, and again I probably sound like a broken record, but trying to try to get at the motivations of investors in this space, right?
Kia – Right.
Adam Hooper – Early days, general VCs, is purely profit driven, then we saw some of the corporate VCs get involved in that kind of investing for, you know trying to get access to the coolest tools, and now it seems like most of the investments happening in our space, it’s kind of a combination of all of those. Right, so it sounds like you guys have three distinct programs that all kind of feed into one another to create that ecosystem that you kind of get the best of all those worlds.
Kia – Absolutely, absolutely and the way we invest is we’ve kind of taken a hybrid of like a CBC and VC in that our partners are not actually Lps at Plug & Play, they’re other members, and we kind of validate our investments against them, so if we’re uncertain about a certain field, a certain pick, they’re the experts, so we essentially go to them and say, “Hey, what do you think about this?” We get their feedback and then based on that feedback we decide whether or not we want to pull the trigger.
Adam Hooper – Great, and so you guys are just on a panel about kind of where we’re at in this tech cycle, right? Are we past, present, future, how are we looking at that? And you had this innovation journey, three different phases, so maybe you guys can talk about those phases, where we’re at on those and kind of, you know, how do we get from, how do we tell which stage we’re in, and how do we get from one stage to the next, how about?
MJ – Yeah, I think this whole innovation journey for real estate technology has been relatively new for a lot of people, just in the last couple years you see the emergence of a ton of venture capital firms raising funds specifically focused on real estate tech and the built-world as Biff Wool calls it. And really I think the three main things that we talked about today were exploration, education and execution. So this breaks down three of the main facets of this whole journey, so if you start with exploration you have a lot of looking outside of your industry and what we’ve really categorized that as you really need to have an evolved mindset, you need to realize that sometimes it’s not enough to have just internal R&D, it’s not enough to just work on the products that you’ve been working on for the past few years, you really need to start looking at other industries, other, maybe even competitors and figure out what solutions they’re using to solve problems that could be applicable to the problems that you’re trying to solve. So one of the main parts about this is realizing that you have to embrace disruptive technology, it’s coming and it’s out there and there’s a lot of startups even today…
Adam Hooper – That’s been hard for our industry.
MJ – Yeah, it’s tough.
Adam Hooper – Right, it’s been really hard.
MJ – It’s super traditional and there’s a lot of people who like the way they’ve been doing things because it’s working, but at a certain point these new startups are going to be not so known, they’re going to be a lot bigger and if you’re not ahead of the curve you’re going to be behind the curve. And that’s kind of what the second point is, is this education aspect. So once you’ve realized that maybe this is something that you have to explore outside of your company, it’s time to start learning and learning by doing. So this is something that we encourage for a lot of the partners that we have and really to learn about the space is to not only go to these conferences and meet startups, but to start working with them. To start running pilots with them and to start testing them out in the field and figuring out, okay are these actual solutions that are going to make a difference in what we’re doing? And one of the main points that I think is really important to note in this instance, is successes are just as key as failures and it’s almost more impactful to have failures when working with startups. One of the things that we highlighted was that what we’ve found is a lot of companies when they first start this journey approach innovation in slightly the wrong way where they think, okay, we’ll work with one startup
MJ – and if it doesn’t work then that’s just, that’s failure and that’s kind of discouraging and maybe we shouldn’t do this. But if you’re running an experiment to solve a problem you’re going to run multiple experiments to figure out which one works. So you kind of have to treat startups like business experiments where you might run five to 10 pilots and in reality, eight out of those 10 pilots probably aren’t going to work, but that’ll really help you illuminate the two that are going to work, so you know, alright, going forward these are real solutions and I know that because I’ve tested other ones that haven’t worked and I can be confident in that that this is something that I need to really implement into my business.
Adam Hooper – And have you guys seen that in practice, in terms of what a hit-rate might be, of again, running some tests, running some experiments and then seeing what percentage of those stick and actually become implemented as a kind of core business practice?
Kia – Yeah, I mean look, besides our corporate partners, like I’ll use a brand everyone knows, Google, Google has literally launched so many products that have failed?
Adam Hooper – Wave, what happened to Google Wave?
Kia – Like so many, right, I’m not kidding. So these are all things that will help them be better, failure is okay. When you have a company or a leader, if your executive team penalizes you for failure, you’re at the wrong company.
Adam Hooper – I think that’s such a different culture in the real estate space, right. In the real estate world failure means you know, you get foreclosed on, like you lose the asset, right? You don’t return investor’s capital? So that’s been a industry wide thing, I mean failure is just not good in the real estate mindset typically, which is completely counter to this Silicon Valley, technology sense that failure is encouraged, that’s how you learn. You run these experiments, if you fail, there’s something you can learn and do better next time.
Kia – Exactly.
Adam Hooper – I think that’s just an interesting dynamic that just that mindset towards failure and you couldn’t be more opposed in the real estate space and the tech space.
MJ – Absolutely and I think that’s tough for a lot of companies to adopt that, you know, but the nice thing about working with startups and running pilots like this is it’s not full failure, like the company’s not going to implode, or you’re not going to all of a sudden become just a debt-ridden company if a pilot doesn’t work.
Adam Hooper – Or if they do, they’ve got bigger problems.
MJ – Yeah, exactly. So that’s why it’s helpful to do these because you can do them pretty quickly, you know, you can run a pilot with a company and honestly if it’s easy to implement the startup within your company in that pilot initially, then that’s a pretty good indicator, whether or not the pilot’s successful, because you already know, alright this is pretty well integrated into what I’m already doing, before I’ve even started doing it.
Adam Hooper – Okay, so exploration, education, execution, this is, each company as their going through this, again the journey of becoming, that transition from becoming a real estate company to a maybe, not technology company, but using technology. So every company goes through those stages of identifying a technology, learning about what those different solutions are and then testing it and seeing where it ends up. How has that been, in terms of getting legacy companies bought in to that approach, right? Are you guys seeing a lot of resistance from the operating companies of truly making that commitment to that new mindset of looking at it more from a technology perspective?
Kia – To kind of start this, these companies, unless the less the leaders, like the executive team has completely transformed like how they think, they don’t become Plug & Play partners. You must be committed, like literally, when we actually onboard partners we have this document we go over and it says, hey, like we need a champion inside your organization. The champion needs to be dedicated to Plug & Play so we can work with this person. We actually have started measuring the success of our partners, we don’t want them just to come in here, come to Plug & Play and we introduce them to startups, and it’s just fall face-flat.
Adam Hooper – Right.
Kia – We actually want them to run pilots and that’s really, really important. So we’re not asking our partners to become tech companies, we’re asking them to become tech driven.
Adam Hooper – Right.
Kia – And that’s like the real difference.
Adam Hooper – And do you guys have some success stories you can kind of point to in that model?
Kia – Yeah, I’ll use Mann+Hummel, because it’s actually one of my favorites, they’re essentially an IoT partner, they are the world’s largest air filter manufacturers. What’s really interesting about what they’re doing is they’ve actually kind of set up a corporate venture studio. It’s a similar concept, so essentially what they’ve done is they’ve gone to their employees and said hey, come to us with your most innovative ideas. So people will essentially like submit RFPs, response to RFPs, with their ideas. Then the leadership…
Adam Hooper – This is internal?
Kia – Yeah, internal. Then the leaders, like the executive team, will choose a team and then that team would spin off as it’s own startup, backed by Mann+Hummel.
Adam Hooper – Interesting.
Kia – Like literally, they’re going to their own employees and they’re saying hey, we want you to start your own company and we’ll support you. That’s like literally…
Adam Hooper – That’s fascinating.
Kia – Yeah, exactly.
Adam Hooper – That’s good innovation.
Kia – Absolutely that’s what we need, we need more of that.
Adam Hooper – Very good, so guys, we’ll let you get running here, but tell us kind of what’s next for Plug & Play, what can we expect to see from you all in the future?
Kia – Yeah, we’re scaling the team globally, we recently opened up an office in Bangkok, a Smart Cities office.
Adam Hooper – Wow, okay.
Kia – Very excited about our global expansion, we’re starting to offer new products which you’ll hear about very soon. And yeah, we’re just keeping the ball rolling.
Adam Hooper – Perfect. Kia, MJ, thank you guys for stopping by the booth and I hope you enjoy the rest of your show.
Kia – Thanks for having us.
MJ – Thank you, sir, it’s a pleasure.
Adam Hooper – Some of you listeners might recognize the next voice on the podcast, Minta Kay, from Goodwin. We’ve done a number of episodes with her and Blake over at Goodwin about their prop-tech initiatives. Pretty broad conversation today, where we’re at in the tech adoption cycle, some of the more interesting things that Minta’s seeing in the industry and a good overview of the landscape for where they see it from their perspective. So Minta, so nice to meet you here in person at CREtech, 2019. Thanks for coming by the booth.
Minta Kay – Likewise, my pleasure.
Adam Hooper – Continuation of the prop-tech series we were doing with you all, a little different format here today, but how’s the conference for you from just kind of general?
Minta Kay – The conference has been superb. There’s a tremendous amount of energy here, there are hundreds and hundreds of tech companies. There are loads of real estate investors which signals to me that there is a growing focus in this space which we believe there should be.
Adam Hooper – Yeah, so some of the things we were just talking about, you were on a panel with a handful of VCs, some interesting perspectives there. One of the things we’ve been asking and trying to figure out is, you know we’re at a stage of innovation where there’s still some truly ground-breaking technology, game-changing technology, or are we at a stage where it’s kind of incremental improvements to efficiencies or operating practices. So what’s your take on that and what did the panel have to say about that?
Minta Kay – So my own take on that, just based on listening to everything and based on my own personal experience with our clients and colleagues is that there are game-changing technologies continuing to come into the market. That said though, there are technologies that involve many, many participants in which there are tremendous amounts of competition and we spoke about that on the panel today. It was interesting to me in that the VCs didn’t fear for that, for the people out in the market, they simply articulated that good companies will succeed and bad companies will fail and they don’t underwrite with a view to the number of companies that may be creating what’s called noise, in this space in a particular segment.
Adam Hooper – And is that just kind of a conviction on winner-take-all dynamic or the wheat will separate from the chaff organically?
Minta Kay – I think it was a bit of, not winner-take-all, but there is a lot of space for there to be lots of different kinds of companies solving different problems and operating from different platforms. So I think there is a recognition that there are tweaks, there are differences, there are substantive operational valuables that come from different companies as opposed to others. So it was fascinating to me that there was a real openness to entertain investing in companies that are varied, but similar.
Adam Hooper – One of the things I know you tried to get from the panel up there is, you know, what are some of those interesting themes or things that are maybe kind of behind the scenes right now, that we may not be privy to? Was there anything interesting that caught your eye on stage up there?
Minta Kay – Well, I will say that from conversations I know that robotics is a huge focus and should be. AI is a huge focus and should be, but I didn’t get from the panel those things you and I don’t know anything about, you know that’s coming out, and it may be that those things are just so far left in the garage still with the two guys that they haven’t bubbled up.
Adam Hooper – Yeah, I took some notes, I think interesting to me to hear some focus on construction technology and costs. Right, I think that’s one, again, one of the less maybe paid attention to areas of our market, you know we don’t normally think of that as prop-tech, per se, but boy we could sure use some innovation there.
Minta Kay – We definitely can, and we see a tremendous amount of innovation in our practice in that space. We work with a lot of different kinds of companies who are innovating around construction techniques, around drone technology, around labor management. Actually across multiple construction sites, so we’re actively in that market, both in the U.S. and outside, we see that. So can totally reiterate and support what they’ve said as a need and as a place where solutions are being developed.
Adam Hooper – You mentioned drones. I think it was, maybe it was the Prologis guys yesterday were asked which is coming first, autonomous trucks or drone delivery? I think he said he just switched to drone delivery, just the other day, are you guys seeing anything interesting in that space right now?
Minta Kay – We are.
Adam Hooper – Anything you can talk about that’s interesting in that space?
Minta Kay – What I can say was actually very funny, as I was walking up and down the halls yesterday, talking with people, there was a lot of talk about drones because it’s been a topic here at the conference, but yesterday was a very stormy day here. The winds were blowing and the rains were falling.
Adam Hooper – Yes, very much.
Minta Kay – And there was a number of conversations that went to, like how would drones operate in this atmosphere, they could crash into the building?
Adam Hooper – Right, yeah.
Minta Kay – They could crash land on top, they could fall on a pedestrian down below and it was in humor, but I think it was significant in that it reflected there’s work to be done about deploying them widely. That said, they’re being used to phenomenal purposes, to deliver medicine and to deliver other needed products, you know around the world. So that is a technology that I see, based on what I know, continuing to grow.
Adam Hooper – Is it going to happen before or after autonomous trucks?
Minta Kay – Before.
Adam Hooper – Before, ’cause we’re almost there now, I mean there are applications now.
Minta Kay – The autonomous vehicle, I think it’s still well in the works, it’s happening, but I believe it’s been slower to work than many people thought. There are just more glitches and there’s more complexity than people expected. It’s still going to happen, but it’s not happening by 2017, which were the early predictions.
Adam Hooper – I think that’s an interesting segue there into another point of where are we at now? Right, we’ve talked a couple years back and we were talking to Steve Weikal, MIT, about where would we be now? Some have come to fruition, others are still five years out, they were five years out, five years ago, they might still be five years out, five years from now. You know why is that, right? Is it an adoption thing, is it an actual technology thing, what prevents some of these from being adopted, I guess, in a more near-term?
Minta Kay – So, I will say two things, one, it’s really thrilling to me to come to a conference like that and see a number of these companies that five years ago were nowhere or at their seed stages, now being growth companies and being out and established and adopted by real estate owners and operators. So I thinks that’s an extraordinarily exiting thing. In terms of slowness to adopt, real estate is a very traditional business and owners and operators think about their hardscape as their bricks and mortars and they’ve been slow to think about the need for flexibility around construction, flexibility around leasing, flexibility around space usage. But that train has picked up speed tremendously and you now see a lot of large owners and operators bringing all of the tech in-house, doing it all themselves, very, very successfully, right. And you see the others not having the resources to do that are not making the choice to do it and therefor relying on you know, other colleagues, businesses to help them with that.
Adam Hooper – The other thing that just kind of hit was you know you said that their buildings are essentially their hardscape, so I wonder how much of that adoption pace is reflected in the fact that some of it needs new construction to implement, right, versus a retrofit. So a lot of these technologies might be really exiting, but if you can’t figure out how to retrofit that in the current built environment, maybe that’s also another cause for delay. So anything that you’ve seen on that side, like I guess the ability to implement new stuff on a green-field perspective, versus kind of retrofitting existing?
Minta Kay – So the links that are built and that are stable and not changing, obviously lag behind the need to pressure to move into these spaces. Those that have significant vacancies even though they may be existing and not under development are moving in the direction of looking at a lot more of technology to improve their sustainability and their operations all the way around. Some of the most interesting aspects of this all come up with the building that are being developed from ground up now, as you suspect and alluded to, right.
Adam Hooper – Like here at Doc 72, they have a lot of the new technology in this building, yeah.
Minta Kay – Totally, they have the ability to just rethink it all, and they are. And they’re rethinking not only how to change their hardscape and their technology and their operations and all that, their design and everything within their own building, but the people who are really smart and are advanced are thinking about how technologies that are not real estate related, must change the way they think about their hardscape, that’s some of where the most interesting pieces of this lie.
Adam Hooper – So for current property owners who have portfolios of existing assets, how should they be thinking about some of these technology advancements, some of these retrofits, or just generally again, making that shift from you know, legacy real estate company to tech enabled?
Minta Kay – I think the first thing they should be doing is getting educated about this, it’s a bit daunting, right. If you can imagine sticking an old scale, real estate developer, owner in this conference.
Adam Hooper – Oh.
Minta Kay – It would be very hard for them to figure out which direction to turn.
Adam Hooper – Absolutely.
Minta Kay – Because the scale of the offerings, you know is phenomenal. So I think, and we often do this with our clients, is begin to educate them about what opportunities are out there, on a step-by-step basis so that they don’t come in here and panic, that they can understand. And each, you know, owner, operator and developer, investor has a different proclivity, has a different pain point for what’s most difficult for them. So as they look at the opportunities they can focus in on those that are most relevant to them.
Adam Hooper – Yeah, that’s something, maybe we can have a longer conversation on another full episode or, you know, what does that roadmap look like?
Minta Kay – Sure.
Adam Hooper – From identifying those technologies, really figuring out what that means to implement them and what that can do from a business perspective. I think, again, it can be very daunting for an owner that’s not as technologically savvy as a lot of these companies expect or need them to be to understand their value proposition, I think the communication of that value is still, that messaging is still being hammered out in this industry.
Minta Kay – And it’s got to come from both sides, so the traditional real estate folks don’t necessarily understand what we’re seeing out here, but these people don’t know how to talk to them either.
Adam Hooper – Right.
Minta Kay – And that’s where Goodwin uniquely comes together because we have the tech piece and the prop piece, so we can translate languages to bring people together to figure out what solutions and products and opportunities may be profitable for them.
Adam Hooper – Perfect, I know you guys put out a few new recent prop-tech articles, so we’ll have to pick back up on our conversation there.
Minta Kay – Yeah, we have three more coming.
Adam Hooper – Three more coming, okay. So I was going to say what is next for Goodwin? Obviously prop-tech is a very conscious effort in that space, what are you guys seeing, in terms of, what’s next for Goodwin? Any kind of interesting activity in the industry, in the space that you guys are following right now?
Minta Kay – Yeah, so we’re having tremendous growth in this space, outside the United States, in London in particular and in Paris following along, Frankfurt behind that. But we are very active now in London and Paris, tackling this issue and this market outside the U.S. In terms of other growth opportunities, you know we continue to grow in the U.S., we are seeing activity in the M&A side, we are seeing companies consolidating, either tech to tech, or prop to tech, or tech to prop, so I think that’s something to be watched and that follows on the conversations about the noise in the space today.
Adam Hooper – And do you think the pace of M&A, we just had Dave Eisenberg, you know we were talking floor-to-seed, he was kind of the early of this kind of current wave of prop-tech exits, it seems like the pace of M&A or acquisitions hasn’t really necessarily met what maybe we would have expected it to by now. How do you feel about that, I mean do you guys see a high level of M&A activity, do you think the pace of that activity is kind of where it should be, is it lagging, is it more?
Minta Kay – I would not say there’s a high level, but I would say it’s proceeding to evolve as one would expect in a market that is as early-stage as this market. So we see big public companies buying on the tech themselves and buying on the tech companies. We’ve seen M&A, tech to tech, but that’s harder for people because they don’t really just want to sell their companies and sell out when they’ve put their heart and soul into developing a business. So that’s slower, but we do see it happening in a moderated, but regulated fashion.
Adam Hooper – Okay, well I think that’s a good spot to wrap it up. We can let you get out here as we close out the conference, so thank you so much for coming by today.
Minta Kay – My pleasure, thank you for having me.
Adam Hooper – Absolutely, we’re excited to continue the conversation on a full episode next. And finally today, the man, Steve Weikal, it’s been awhile since we’ve had him on the show, be sure to check his show notes for a prior episode. We talked about some of the issues that we’d addressed on earlier shows with Steve, what he’s seeing today, what technology is actually in place, similar to what we spoke with Minta about, another really fantastic episode, Steve has a lot of really good points, so I hope you enjoy the conversation. Steve Weikal, thank you for coming on the show again today, it’s been awhile since we’ve had you on.
Steve Weikal – It’s good to be here, Adam, thank you.
Adam Hooper – I’m glad we can meet up here at the CREtech, 2019 event.
Steve Weikal – In New York City.
Adam Hooper – In New York, actually in Brooklyn.
Steve Weikal – In Brooklyn, technically Brooklyn.
Adam Hooper – So what’s your take on the building?
Steve Weikal – The building’s cool, I worked on this site when it was dirt, two, three years ago. So to see this happen, the whole Navy Yard thing is really exciting. So there’s the innovation lab which is this incredible maker, co-creation, tech-startup thing, down the street, that’s great. And then the rooftop garden and then this building which is a real stunner.
Adam Hooper – It is, so we’re going to be talking with Michael Rudin, later today to talk about the building and what they’ve done from the technology side. You know I know we’ve only got you for a short time, I thought it’d be good to kind of go over some of the stuff we talked about last time, when you were on the show, was more future technology right. We were talking AI, autonomous, we were talking blockchain. I’d like to talk about what you’ve seen since then, in terms of what technology has actually been implemented in buildings, you know kind of where we’re at in the adoption phase and then maybe some of those things that you’re seeing on the horizon that are interesting and exciting to you. I guess in terms of the actual building itself, technologies, whether it’s, you know tenant experience, efficiencies. We’ve got a lot of energy plays around here, what are you seeing from the technology side that’s actually being implemented today?
Steve Weikal – Well, I look back on when we last, when we first spoke, when we did our first podcast, we were still talking about startups, we were talking about disruption. We’re now at a point, and that was what, a couple of years ago, we’re at a point in the innovation cycle where these are now growth companies.
Adam Hooper – Right.
Steve Weikal – And it’s no longer disruption, it’s starting to become the standard operating procedure. So we’re moving through the innovation cycle, the adoption cycle, and so that, I think we wondered how long that was going to take?
Adam Hooper – Yeah. We’re in it.
Steve Weikal – Yeah, we’re in it. I don’t know, did it happen faster than we thought? Given it’s the commercial real estate industry?
Adam Hooper – That’s a good question, I think certain aspects have, I think certain aspects have happened quicker, than maybe we thought, I think others still haven’t.
Steve Weikal – Right, right.
Adam Hooper – In terms of kind of the usage of the space, you know smart buildings, whether it’s sensors or tracking usage, energy usage, I think some of those innovations have been fairly well adopted. Others, you know again, I think blockchain being one of the biggest ones, right, I mean there was a lot of promise, I think there still is, but that’s one of those that’s maybe a little bit more esoteric, a little deeper technology that maybe hasn’t caught on, quite yet.
Steve Weikal – Right. We are seeing convergence, so when you get to this point in the cycle we’re seeing the convergence, remember how they were siloed, there were the startups that did brokerage and leasing and then the group, the sub-group that did, it wasn’t even tenant engagement really, when we first talked. So I don’t know if we’ll ever get to a platform, to speak of, but there is this convergence where you can’t have a conversation about tenant engagement without understanding the physicality of the engagement, so now you have to engage with your building, you have to engage with the humans and this is driven by digital infrastructure which is hardware and then sensors come into it and then energy comes into it and suddenly there’s this cocktail of technology that is maybe, if there’s any disruption going on is that roles in real estate are also converging where the building engineer, no longer is just the guy or the gal that makes sure that the heating and air conditioning are working. You just can’t be that anymore because the people are more sophisticated and the buildings are more sophisticated and it’s merging. And then on top of it you’ve got all of these new companies and growth companies that are kind of picking at this conversation and this structure.
Adam Hooper – So a couple themes that we’ve talked about so far, here with other guests at the show, you know AI, machine learning, and being able to sift through vast amounts of data, you pull the human component out of that analysis piece and then let us, as humans with other problem solving skills to take action on those insights. I think that’s kind of what you mean when you were talking to the building communicating with the engineering system, communicating with the tenant experience, that’s all now kind of table-stakes, right, that can all happen behind the scenes.
Steve Weikal – The technology exists.
Adam Hooper – And then it can get to a human to make insights from that, right?
Steve Weikal – Yeah, the technology exists, we’re on just kind of the leading edge of what you might call a digital twin. But just imagine, there are companies, Glaso make jet engines, virtually, they have this digital, exact duplicate of the physical engine. So what happens when this stuff converges to the point where all of these systems talk to one another and they’re all digitized and then you bring the people, the humans into it as well. So we are getting there, that’s at the very cutting edge though. But we’ve got the technology to do it and the storage power and the computing capacity, 5G will help with that. There might be a bigger human issue about the relationship with technology than there is about just solving the technical problem.
Adam Hooper – Right, because that can be done today.
Steve Weikal – Yeah, I think we’re really kind of there. The pieces are together, we haven’t joined them all together.
Adam Hooper – That’s again, another thing we’ve talked about a few times, thus far is integrations and the ability to talk to one another. You know real estate’s always been a very close-to-the-chest, my data is my data, I don’t want you to know anything about my data, but without that insight, that kind of greater communal insight into some of that data, will this grow as big as it could if we don’t have those kind of integrations and systems speaking with one another?
Steve Weikal – I remember speaking with a startup in the early days, six years ago…
Adam Hooper – The early days.
Steve Weikal – And it was pretty disruptive and it was challenging a certain, I won’t go into it, it was challenging a certain part of a very entrenched part of the industry where a lot of people make a lot of money. And the founder said to me, “Steve, the first time they lose a deal because their competition used my tool and my data, they will be a convert.” And I think there’s some truth to that because they’ve now gotten great traction and it’s a familiar name in the industry. But maybe this happens when the say, building, maybe the building engineers are very, they have a duty to protect their territory because they have to make sure everything runs, properly. But the first time somebody reveals to them and incredibly powerful way to maybe not be so kind of protective, then maybe they’ll come around. And I think we’ve seen that, we’ve seen that in different parts
Steve Weikal – where the technology is less and less of a threat because people are realizing the value and that’s the key for the startups. So many of them couldn’t really articulate the value early on.
Adam Hooper – Right, offense versus defense?
Steve Weikal – Exactly, exactly.
Adam Hooper – And that’s again, the guests that were just on were talking the same thing, a lot of the technology that’s here at the show is super interesting, but the very young age of our industry, you know real estate technology at large, is still so young to be able to effectively communicate what that value is, we got to work on the pitches a little bit.
Steve Weikal – That’s true, that’s true and the some of the founders are, well a couple of things are going on. At MIT we always joke about, somebody will create this incredibly powerful, elegant solution that’s looking for a problem. So we get some of that, right, we get the solutions looking for a problem, we also get founders or, well founders, who see something in our industry that’s really strange that we do it that way, so they see it as an opportunity, I get that but sometimes they don’t have the advantage of coming from the real estate industry to realize how challenging that’s going to be. Or maybe why we do it, sometimes there’s a reason why we don’t do it the way the rest of the world does it, and it’s a valid reason.
Adam Hooper – So I’m interested to get your take on again, kind of founder dynamics, from again early days, which like you said kind of six, seven years ago. You know we were early in the space, I think we were able to find a good mix of, my prior real estate experience, the team’s prior real estate experience and marry that with the tech. Some of these technologies it seems like there’s even a broader gap between the technical knowledge and the real estate knowledge to actually implement a functionally very elegant technology solution to how do you actually apply that in the real world. So have you seen over the last handful of years founding teams being able to bridge that better or are you seeing the divide between technology and real-world application widen?
Steve Weikal – I think there’s less of it, I think the word is out, there are enough founders that get together and share war stories, I think the realization that you need somebody on the team, somebody on the close founding team, maybe not a founder, but you need an idea, a person with an idea. You need a tech person, you need somebody who understands how to write the code and you need somebody that understands real estate. Now they may not be an employee or a founder, but they might be a founding advisor or something like that.
Adam Hooper – Early on enough to get the practical application.
Steve Weikal – I think there are enough war stories out there, usually when I meet a new company they’ll have some connection to the industry. The divide is not as big as it was…
Adam Hooper – Good.
Steve Weikal – When this adventure started.
Adam Hooper – And how have you seen the kind of corporate real estate manager turned VC change the landscape? Right, real estate VC, prop-tech VC, that’s cool now, it wasn’t six years ago.
Steve Weikal – Yeah, that’s changed a lot, there are a couple of roles and activities that are recent and I think one of the pivot points was the huge Fifth Wall race.
Adam Hooper – Right.
Steve Weikal – The first fund. Because prior to that we always had VCs coming through MIT in the various departments, but we had VCs spending time at the center and I was trying to tell the story saying hey, there’s something here, you guys should be taking a look, but as you know the traditional VCs were making a few investments, but nobody thinking in the broader way.
Adam Hooper – Options right, they were looking at it as options. If something blew up, they have an option and they have the ability to get in then.
Steve Weikal – Yeah, they were dabbling for different, and maybe dabbling isn’t fair, but they were making limited investments for different reasons thinking like a VC. Then Fifth Wall explodes, now there was other investment going on, we know that, but Fifth Wall got the press and it shifted the conversation. We saw the traditional VCs realize there was something here. Now we’re seeing more funds, more people breaking away, starting their funds focusing on this category and then we’ve got the company saying, wow, I better find out what’s going on with this, whether it’s coming and joining the Center for Real Estate so that you can at least be in the room or you’re putting a little money into the different funds so that you can be in the room and get a first look at what’s happening. So that has really grown a lot.
Adam Hooper – So is that now, are real estate managing, operating companies looking at that as a way to get access to early technology, are they looking for partners, are they looking with a purely financial, like what’s their motive?
Steve Weikal – Probably all of the above. All of the above, all of the above, but I had a very successful regional developer in Boston who’s a friend of ours, he came to some of our early conferences on this topic, and he said, we were having lunch and he said, “Steve, I like these companies but I see that they’re nipping at my margins, maybe I need to reallocate some capital and invest in them so that I can get my margins back.”
Adam Hooper – You can get the benefit of that.
Steve Weikal – And this was prior to Fifth Wall and so I think there’s a recognition that, I don’t think he expected to get rich off of being a tech investor, an angel investor for tech, but I think what he saw was getting back a little bit of that margin that he could see he’s going to lose by these young companies nipping at the edges.
Adam Hooper – Smart, how’s he done?
Steve Weikal – I don’t know, I have to check in with him. The thing is he’s done extremely well as an owner-operator-developer. He’s also done extremely well as a customer, I don’t know if he ever made any direct investments into technology, maybe a fund or maybe through his family office, I’m not sure. So in answer to your question all of the above. But let me also add, there’s another change in the industry. A title along the lines of, Chief Innovation Officer, Chief of Data, Chief of Data Strategy, Head of Analytics, Head of, you rarely see Head of prop-tech, but there is a recognition, I’m really surprised by how quickly big companies made the commitment, they allocated the part of the budget to get somebody onboard.
Adam Hooper – And that’s the role of technology inference has changed tremendously right? The early 2000’s trope of a technology company was a very specific thing, right we had the .com boom and bust and then will technology ever come back? And now again you can argue that every company is a technology company at it’s core. Technology just is such a central part of operating a business these days.
Steve Weikal – Any business.
Adam Hooper – Any business, right, and I think that’s something that we’re definitely seeing in the real estate space is you know younger people are coming into positions of leadership, they grew up with technology, they’re much more embracing and willing to try new technology, so I think the role that people who identify technology and the role that technology itself plays in these legacy operating shops is absolutely changing, for the better.
Steve Weikal – Even if we didn’t have the shifting landscape of the workforce, even if you didn’t have the, the Z’s are now coming into the workforce, they are the true digital natives. People like you and me, we’re digital immigrants, right, we had to learn the stuff, but they come in already tech enabled.
Adam Hooper – Tech dependent.
Steve Weikal – And tech dependent, right, so the expectations are off the charts because if I use Uber and Airbnb and the other 20 apps on my phone for my day-to-day life and then I get to my real estate job and I work off of a technology that turns 41 years this old this year, they call it the spreadsheet. I mean it’s completely absurd that we run this industry still run part of the industry off a 40-year-old technology. Yeah, there’s this push from the workforce but even aside that, the buildings themselves are now computers with a roof. So who’s going to take full advantage of that is going to win.
Adam Hooper – Interesting, so what is on the horizon, what new stuff have kind of seen walking around the halls or what’s on your radar as the next exciting technologies that we’re going to see?
Steve Weikal – I personally like augmented reality or really mixed reality. I like that, I’m intrigued by that, there’s some companies dabbling in that, there are non real estate companies that are working on it, even when you look at some of the Google demonstrations they’re actually doing real estate stuff and the industry probably needs to pay attention because when Google does something or when Amazon does something, sometimes it doesn’t end well, for everybody else. So I think the mixed reality is intriguing. We as an organization are going to do, we’re doing work in the data, you brought up the data and the machine learning and the deep learning. MIT has a number of initiatives broadly on those topics. We’re going to try to bring together or at least be the lens, the real estate lens on that conversation. It’s no longer a problem that we don’t have enough data now we have too much.
Adam Hooper – Yeah, too much.
Steve Weikal – Arguably and so we have to figure out what to do with it and how to make it profitable, how to make decisions and then how to maybe, the industry’s at some point is probably going to have to decide on a common vocabulary for data and what we do with it, how we do with it, not just standards, not just data standards, the kind of nuts and bolts of data standards, but the common vocabulary that I think would make all of us, it would benefit everybody in the industry.
Adam Hooper – To have some standardization.
Steve Weikal – And it’s early and it’s early, but now that we’ve got the thousands of companies and the buildings that are getting, that are spitting out all this data, so between the startup companies generating data, the buildings are generating data, we’re going to have to figure out what our relationship with data is going to be.
Adam Hooper – Fascinating. Steve, thanks for stopping by the booth.
Steve Weikal – Adam, thank you so much for having me.
Adam Hooper – we’ll let you get on your way.
Steve Weikal – Always a pleasure.
Adam Hooper – Great to have you on again, Steve Weikal.
Steve Weikal – Thank you.
Adam Hooper – Well that’s a wrap on Episode 3 of our 2019 CREtech coverage. Stay tuned for tomorrow where we talk with Maureen Waters, President of 10X and how they stay innovative in this prop-tech space, talked about smart windows and we learned about accelerating the adoption of technology in our industry. Stay tuned and you’ll hear about that tomorrow.