Why is now the right time to embrace commercial real estate tech?
When recently discussing our company mission with a well-known investor, he asked one wise and Buddha-like question in its simplicity: “why now?”
While I had immediate business answers, which I’ve shared below, I continue to ponder the question. The entrepreneur always says, “why not now” and presses forward; however, today is only a droplet of water in a waterfall of time. Why should anything special happen NOW and not tomorrow? Why hasn’t it already happened?
I haven’t found the answer to the deeper question, but now is the time to continue to grow Crexi, an online CRE platform connecting brokers with buyers and simplifying the often slow and clunky real estate transaction process using cutting edge technology. Here’s why (now):
Tech is a part of everyone’s lives
There is a large demographic and generational sea-change occurring in CRE. Brokers, buyers, and investors who are accustomed to and demand technology in their everyday-lives are replacing their predecessors. We are witnessing unprecedented industry-wide tech-adoption. The demand for the tools exists, but many of the tools have not yet been created.
Commercial Real Estate has yet to catch up to the Unicorn Era
Most of the marketplaces that do exist are ill-suited to handle the changing demands of the market. Many were designed in the 90s or 2000s and have only slowly evolved. Complacent with their early success, many have not kept up with most technological advances and, in many ways, are people-heavy real estate firms more than tech firms. Most current platforms are satisfying today’s demand with yesterday’s product.
A penny saved is a penny earned
Incumbent fee models are widely disliked and perceived at best as necessary-evils. Much like the taxi industry, the service should be better and the costs should be lower. We believe tech and resulting transparency should empower buyers and lower their costs. Sellers should also benefit as buyers can now use their buying power to pay them and not transaction fees. Sellers also benefit from increased liquidity (“Liquidity equals value,” said Sam Zell).
The customer has more knowledge than ever before
Users want to help design and control their processes in conjunction with market forces. Netflix and Amazon users wish to promote content with their ratings and feedback. Wikipedia users create and regulate content. Uber does not tell drivers where they should drive; the market does. Brokers want to design and manage their process and react to market forces with data and assistance from the service provider, but limited interference and friction.
A wider client pool equals many stable streams of revenue
The market cycle and overall economy are changing, and change will fuel evolution. Value and demand shifts will bring demand for new tools with wider reach as market conditions will likely make deals harder to execute. Conduits connecting brokers with out-of-market buyers are needed. Assuming some distress emerges, lenders and servicers will continue to be early adopters and use online marketplaces to promote transparency and liquidity. Our platform is designed in-part with this in mind (lenders being the only non-brokers we will engage with).
Now is the time to connect with Crexi and find out how we can help you do more deals, and reduce your professional expenses either as a buyer or broker while speeding up your transaction cycle and making your work-flow more efficient.