It was a fun and beautiful CREtech conference last week is San Diego. Yes, the weather was a perfect high 70s to low 80s but that isn’t what outlines the kind of beauty being referred to here. There is a new narrative that is beginning to ring loud across the proptech ecosystem. Now, the proverbial sun is shining on those that had foresight to know where the market was headed. Whether commercial or residential, leadership at the highest levels are identifying a new driving force within their business practices.
The tenant/resident and the way they experience the built world has historically been an afterthought. Naturally, as an investor, developer or property manager, the tools and system we employed early on were very asset based. Manage the property, make it operate efficiently, protect the asset from harm and make sure the tenant/resident pays.. rinse and repeat. This created massive entities in property services and software space. The bigger they became, the more this tunnel vision solely around the property was perpetuated. For the tenant (commercial) or resident (residential), what they were left with was a model of “You pay me a large monthly sum and I’ll let you keep a roof over your head,” which came with challenging terms and nothing to show for it in the end. Since renting has existed, this model has survived.. until now.
Finally, the real estate industry is investing into new technology and gathering new insights into fundamentals we didn’t understand prior. Solutions are becoming more advanced and adoption has accelerated. We’re beginning to see data, users and the market more holistically. During the conference it seemed the biggest, most repeated revelation being witnessed is leading to significant investments and excitement but also major questions. How do we effectively harness the power of our end user, the resident.
The resident of the property is quickly being hailed as the most important focal point rather than the property itself. This inversion of priorities is nothing short of major. Especially given that prior to solutions we’ve been using over the past decades, structurally and economically didn’t leave anything left for the consumer to benefit from. This is in spite of new fintech and digital solutions that should afford for better distribution of value.
How they interact with, experience and support the property and its operation is now understood as the front lines of a property’s success. Not fully appreciating this dynamic has caused the plateau of net operating income and even deterioration of margins as demands only increase as people become more connected and expectations become as dynamic as the residents we serve.
During the conference there were several keynotes. Unfortunately, I didn’t get to attend every talk but two of note were with Prologis where Will O’Donnell and Henrik Holland spoke with moderator, Taylor Odegard from NavigatorCRE on the inversion of how they look at serving a property through the tenant now, not the other way around. They clearly understand that the tenant is actually the window into optimizing how properties operate and generate revenue. The second was with Dallas Tanner from Invitation Homes and Travis Putnam from Navitas Capital. Dallas laid out a future state vision for their growing portfolio that highlighted a focus on winning with community and consumer.
The fun, insightful and innovative proptech crowd was buzzing like usual but uniquely, the echo this time also seemed to come from the top down. As Travis from Navitas mentioned during the discussion, we’re clearly only in the second inning of the proptech innovation game. There is a tidal wave of change coming to the market. As we realize new ways of communicating with, supporting and just as importantly, expanding on how we respond to consumer demand, we’re coming to understand that there’s so much more opportunity to win.
As my GM of Marketplace, Raja Mawad and I flew back from San Diego, we couldn’t help but share our excitement about the phenomenal shift in perspectives across the industry and how remarkably it fits with a narrative we’ve been pushing towards for years. Property management software, though a critical set of tools, can be nothing without a strict focus and embedded alignment with a platform that serves a very dynamic end user. On-demand services, the ability to maximize and support lifestyle and a continuous offer of appreciation and loyalty is critical to tomorrow’s future state.
