The Myth Of A Data ‘Utopia’: Industry Leaders On The Benefits And Limitations Of Proptech

The commercial real estate industry has long had a reputation for being slow to embrace technology. On July 26, Bisnow Editor-in-Chief Mark Bonner sat down with four CRE professionals who are working to change that. 

At a luncheon at Bisnow’s New York headquarters sponsored by Building Engines, Cecilia Li, chief information officer at Urban Edge Properties; Chris Masotto, principal, head of property management Cannon Hill Capital Partners; Neal Mohammed, head of technology at Rudin Management Co.; and Andrew Hardy, senior operating executive at JEMB Realty, discussed the role of technology in CRE today — its strengths, its limitations and how it is shaping the industry’s future.

Bonner started the discussion by referencing CRE’s tech-averse reputation but said there seemed to be a shift during the pandemic. Hardy, a 30-plus-year industry veteran, said that despite what people may think, tech has always been a major part of CRE that has been constantly evolving, and the pandemic just heightened its adoption. 

“I have watched the dynamics of tech shift from the old style of operations to the building management systems of today,” Hardy said. “It’s evolutionary.”

Tenants are also responsible for driving the CRE technology revolution forward, Mohammed said. In the past, building tech was mostly used behind the scenes, in the back of the house. Tenants, meanwhile, were simply given a set of keys and a blank floor plate. As expectations change and the competition for tenants heats up, landlords are becoming increasingly invested in how they can use tech to improve the user experience. 

“Tech used to be about maintenance and keeping the lights on,” Li said. “As long as things kept running, innovation wasn't a priority. But now, as technology has woven into our everyday lives, executives recognize the value of data and are eagerly embracing its adoption. Technology has shifted from a luxury to a necessity. It empowers organizations to function efficiently and gain a competitive edge. For operators, it's a means to offer tenants and shoppers a positive customer experience.”

Continuing the discussion of the value of data to CRE, the group was asked to name the best data they have at their disposal to determine what tenants want. 

The consensus was that while there is no shortage of valuable data, there is no one set that will provide owners and operators with everything they need. According to Li, there's no such thing as a “data utopia” because the most valuable data is the kind that can be adapted to suit specific needs.

“It’s challenging to claim that a single company possesses the best data,” Li said. “Depending on the specific project I'm working on, I'll tap into various data sources to acquire the information necessary to address a particular issue. Our focus is on problem-solving; we're not just adopting technology for its own sake.”

Hardy said the key is to look at what’s governing the market. ESG, post-pandemic health and wellness expectations, local laws, profit — all of these things need to be factored in when considering the types of technology that will be most beneficial to a building. The problem, as Masotto pointed out, is the fast-changing nature of the tech world. 

“As owners and operators, we struggle with what tech to adopt because you can invest and install something one day and it’s obsolete by the next,” Masotto said. 

He added that today’s tenants are putting more focus on ESG and want to be in a building with technology that can support their own sustainability and ESG goals. 

“It is a broker’s job to attract new tenants, but renewals are about the direct relationship between tenants and landlords,” Mohammed said. “This is why landlords need to have proactive conversations with tenant facility managers.” 

One point that the attendees recognized is the importance of convenience to all building occupants. Masotto said that tenants will interact with several different layers of technology when they walk into a building — from the access system at the front door to the readers in the elevators and the middleware connecting these and other various technologies, leading them to their space. The tenants are likely unaware of these layers, and they don’t and shouldn’t care beyond that it is fast, seamless and convenient to use.

Hardy relayed a story he had recently heard about an office building in Indiana that had 100% occupancy — a rarity in today’s post-pandemic environment. He said the only thing that set this building apart was that it was in an area where tenants could easily drive to, park, get to the office and make it home at a reasonable time.

Hardy himself commutes more than 60 miles to get to the office each day, and during that commute, he said he only runs into problems on the NYC subway and on his walks to and from his stop. Once he’s in his office — or any office building, for that matter — he is happy to be there as long as it is clean and safe. Until technology can solve the inconveniences people run into on their daily commutes, it is not going to be enough to bring people back to the office full time, he said. 

Mohammed said the proptech field is oversaturated with “solutions in search of a problem.” However, the attendees agreed that the true value of tech lies in how it can improve building operations. Many tenants will bring in their own technology to improve their day-to-day environment, and owners and landlords need to be focused on the tech that will help their buildings run more efficiently and give them the data they need to cut their energy usage and reduce costs wherever possible. 

That’s where the true return on investment lies. 

“Proptech is the silent supporter of what properties need to deliver versus the thing that will be driving tenants to buildings,” Hardy said. 

The discussion wrapped up with a question about advancements in artificial intelligence, and how the attendees believe it will impact their businesses. 

While it seems as though the jury is still out on what the full impact of AI will be, Mohammed said it will play a large role in speeding up the onboarding process, reducing the amount of time it will take to learn if a property is right for a portfolio and whether a tenant is right for a property. Li agreed that AI’s core benefit comes in helping businesses make more informed decisions. 

“AI will facilitate quicker decision-making,” Li said. “As AI continues to mature and businesses identify pertinent use cases, it could progressively integrate across an organization, including areas like accounting, leasing, email, marketing and even cybersecurity, which we already have in place. We're utilizing tools that leverage AI to counter AI-generated threats. Over the past decade, organizations have focused on gathering and standardizing data. The crux lies in collaborating with operations to pinpoint practical ways of harnessing this data and developing problem-solving solutions.” 

This article was produced in collaboration between Building Engines and Studio B. Bisnow news staff was not involved in the production of this content.

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