REITs and Proptech Investments, a Nareit webinar on Feb. 14, examined how REITs identify, fund, and leverage innovative technology to make their companies and properties more cost effective, competitive, and responsive.
John Jones, senior vice president, government relations at Nareit, moderated the discussion, which featured William O’Donnell, managing director and founder of Prologis Ventures, a venture capital arm of Prologis, Inc. (NYSE: PLD), and Franco Faraudo, co-founder and editor at Propmodo.
“It’s obvious to many observers that more and more everyday emerging technologies are colliding with traditional commercial real estate and REITs,” Jones noted at the outset.
“Whether we are talking about robotics, machine learning, AI, generative AI, it's a lot to take in if your primary focus has been outside the world of technological innovation and more focused on traditional brick and mortar real estate,” he said.
Faraudo observed that the conversation around proptech “seems to be on its way out,” simply because it has become so ingrained into daily workflows.
Prologis Ventures, meanwhile, has approached proptech as a means to create the best technology to solve pain points and generate efficiencies within business processes, O’Donnell said. About 70% to 80% of its investments are focused on Prologis customers, he added.
O’Donnell pointed out that one of the most cumbersome and difficult parts of introducing new technology is the process of change management. “Even if you find the world's best technology, if you don't explain it to people, give them a clear identification of ‘here's the benefit, this is why you need to change,’ it's not adoptable.”
Other observations during the webinar included:
- Faraudo said most real estate companies are taking a more wait-and-see approach to proptech. “What's fascinating is it's creating a larger conversation within real estate firms about who they are, what's your core competency, what do you want to actually use tech to change?”
- Every company is trying to become technology enabled and what that means for different companies will change, O’Donnell said. “But really, at the end of the day, technology can enhance decision making.”
- It has become “a lot easier” now for companies to lean on outside vendors for technology, rather than developing in-house, Faraudo pointed out.
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