WEBVTT 00:00:00.000 --> 00:00:01.740 You know, I was walking past a construction site 00:00:01.740 --> 00:00:03.279 the other day, one of those massive residential 00:00:03.279 --> 00:00:06.099 towers going up downtown. Yeah. And I stopped 00:00:06.099 --> 00:00:10.179 to watch for a second. It struck me how, well, 00:00:10.199 --> 00:00:12.619 how ancient it all looked. Ancient in what sense? 00:00:12.800 --> 00:00:15.140 I mean, they're using cranes and modern equipment. 00:00:15.259 --> 00:00:17.440 Oh, for sure. Yeah. But just the process. You 00:00:17.440 --> 00:00:20.879 know, you see mud, concrete, guys in hard hats 00:00:20.879 --> 00:00:23.539 shouting over this incredibly loud machinery. 00:00:24.100 --> 00:00:26.620 And there are still stacks of paper blueprints 00:00:26.620 --> 00:00:30.320 flapping in the wind. It felt so... Right. And 00:00:30.320 --> 00:00:32.039 then later that day, I went home to deal with 00:00:32.039 --> 00:00:35.240 my own lease renewal, which, I kid you not, involved 00:00:35.240 --> 00:00:38.159 printing out a PDF someone had emailed me, signing 00:00:38.159 --> 00:00:41.399 it with a wet ink pen. Ah, the classic wet signature. 00:00:41.719 --> 00:00:43.500 The actual wet signature. Then I had to scan 00:00:43.500 --> 00:00:46.780 it and email it back. It feels almost medieval 00:00:46.780 --> 00:00:48.679 in the age of the smartphone, doesn't it? It 00:00:48.679 --> 00:00:50.020 really does. And you've just hit on something 00:00:50.020 --> 00:00:52.000 fundamental. When most people think about real 00:00:52.000 --> 00:00:54.159 estate, traditional real estate, that's the image 00:00:54.159 --> 00:00:57.740 that comes to mind. It's dusty. It's slow. It 00:00:57.740 --> 00:01:00.619 involves a a frankly alarming amount of paperwork 00:01:00.619 --> 00:01:03.219 that let's be honest nobody actually reads because 00:01:03.219 --> 00:01:05.640 you just want the keys exactly just scroll the 00:01:05.640 --> 00:01:09.459 last page and sign it feels like this giant immovable 00:01:09.459 --> 00:01:11.879 brick and mortar beast that hasn't really changed 00:01:11.879 --> 00:01:15.480 its core processes since i don't know the victorian 00:01:15.480 --> 00:01:18.150 era that's a very common And, you know, for a 00:01:18.150 --> 00:01:20.409 long time, a historically accurate perception. 00:01:20.769 --> 00:01:23.090 The property industry was essentially the land 00:01:23.090 --> 00:01:25.530 that time forgot. It was deeply conservative. 00:01:25.750 --> 00:01:28.129 It was incredibly heavy on manual processes. 00:01:28.530 --> 00:01:31.689 And it viewed technology with a very healthy 00:01:31.689 --> 00:01:35.519 dose of suspicion. If it ain't broke. Don't fix 00:01:35.519 --> 00:01:37.879 it. Pretty much. If it wasn't broken and more 00:01:37.879 --> 00:01:39.659 importantly, if the rent checks were clearing, 00:01:39.859 --> 00:01:42.040 why would you change anything? Right. But the 00:01:42.040 --> 00:01:43.939 stack of research we have in front of us today 00:01:43.939 --> 00:01:47.599 suggests that this dinosaur is waking up. In 00:01:47.599 --> 00:01:49.700 fact, it suggests the dinosaur is currently learning 00:01:49.700 --> 00:01:52.939 to code and is, you know, sprinting. We're looking 00:01:52.939 --> 00:01:54.819 at an industry in total transition. Absolutely. 00:01:54.939 --> 00:01:57.120 We're looking at the disruption agent, the force 00:01:57.120 --> 00:01:59.060 that's causing all this change known as prop 00:01:59.060 --> 00:02:01.590 tech. PropTech. It sounds snappy. I like it. 00:02:01.629 --> 00:02:03.569 But before we get lost in the weeds of all this 00:02:03.569 --> 00:02:06.030 research, let's unpack that term. What exactly 00:02:06.030 --> 00:02:08.330 are we talking about when we say PropTech? At 00:02:08.330 --> 00:02:11.490 its core, PropTech, which is just short for property 00:02:11.490 --> 00:02:14.009 technology, is the application of information 00:02:14.009 --> 00:02:16.969 technology and, this is the key part, platform 00:02:16.969 --> 00:02:19.129 economics to the real estate industry. Platform 00:02:19.129 --> 00:02:22.150 economics. That sounds like a term straight out 00:02:22.150 --> 00:02:24.569 of a business school textbook. Can you translate 00:02:24.569 --> 00:02:27.310 that for me in the context of, say, buying a 00:02:27.310 --> 00:02:29.870 house or renting an office? Yeah, of course. 00:02:29.990 --> 00:02:32.349 Think of it this way. It's not just about putting 00:02:32.349 --> 00:02:34.669 a listing on a website. That's sort of PropTech 00:02:34.669 --> 00:02:37.550 1 .0. Platform economics is about creating these 00:02:37.550 --> 00:02:40.930 digital spaces, these marketplaces where producers 00:02:40.930 --> 00:02:43.569 and consumers can connect directly. So cutting 00:02:43.569 --> 00:02:45.979 out the middleman. In many cases, yes, or at 00:02:45.979 --> 00:02:49.280 least reducing the need for intermediaries. In 00:02:49.280 --> 00:02:51.319 real estate, it's about rewriting the fundamental 00:02:51.319 --> 00:02:55.979 rules of how we buy, sell, rent, design, construct, 00:02:56.099 --> 00:02:58.659 and manage the spaces where we live and work. 00:02:58.800 --> 00:03:00.740 It's about taking all that friction you felt 00:03:00.740 --> 00:03:03.569 with your lease renewal and just Smoothing it 00:03:03.569 --> 00:03:06.210 out. Making it disappear. And I noticed in the 00:03:06.210 --> 00:03:07.969 reading that there is a significant crossover 00:03:07.969 --> 00:03:10.969 with another tech sector we hear about constantly. 00:03:11.169 --> 00:03:13.770 Yes. FinTech or financial technology. You'll 00:03:13.770 --> 00:03:16.469 see a massive, massive overlap there. And that 00:03:16.469 --> 00:03:18.870 makes perfect sense. Because at the end of the 00:03:18.870 --> 00:03:21.889 day, for most people, real estate isn't just 00:03:21.889 --> 00:03:24.409 a building. It's the biggest financial transaction 00:03:24.409 --> 00:03:27.189 of their lives. Precisely. The two are completely 00:03:27.189 --> 00:03:29.849 intertwined. So things like online payment systems, 00:03:30.210 --> 00:03:33.069 digital mortgage applications, booking systems, 00:03:33.430 --> 00:03:36.189 crowdfunding for property development. That is 00:03:36.189 --> 00:03:38.650 the intersection where PropTech and FinTech sort 00:03:38.650 --> 00:03:40.830 of hold hands. So if you're using an app to pay 00:03:40.830 --> 00:03:44.319 your rent every month or. You go online and use 00:03:44.319 --> 00:03:46.479 an algorithm to get pre -approved for a mortgage 00:03:46.479 --> 00:03:49.180 in 10 minutes. You're standing right at that 00:03:49.180 --> 00:03:51.219 intersection. It's about digitizing the flow 00:03:51.219 --> 00:03:53.419 of money just as much as it's about digitizing 00:03:53.419 --> 00:03:56.180 the process of finding a place to live. So our 00:03:56.180 --> 00:03:58.060 mission for this deep dive seems pretty clear 00:03:58.060 --> 00:04:00.379 then. We want to see how these digital dashboards, 00:04:00.419 --> 00:04:02.960 artificial intelligence, the sharing economy, 00:04:03.159 --> 00:04:05.680 and even smart sensors are changing the game. 00:04:05.819 --> 00:04:08.580 We want to understand how we got here and, maybe 00:04:08.580 --> 00:04:10.919 more importantly, where all this money is flowing. 00:04:11.639 --> 00:04:14.680 But I want to start with the why. Why now? What 00:04:14.680 --> 00:04:17.000 is the core problem that PropTech is actually 00:04:17.000 --> 00:04:19.459 trying to solve? If you had to boil it all down 00:04:19.459 --> 00:04:21.800 to one single word, that word would be friction. 00:04:22.199 --> 00:04:26.259 Friction? Yes. Historically, the entire life 00:04:26.259 --> 00:04:28.860 cycle of residential real estate is just defined 00:04:28.860 --> 00:04:31.379 by friction. Think about the process of finding 00:04:31.379 --> 00:04:34.339 a home, say, 25 years ago. It was a nightmare. 00:04:34.379 --> 00:04:36.439 I remember my parents doing it. Driving around 00:04:36.439 --> 00:04:39.019 for hours on a Saturday looking for sale signs. 00:04:39.319 --> 00:04:42.459 Calling agents who never seemed to pick up. Waiting 00:04:42.459 --> 00:04:45.819 for someone to fax a listing sheet to you. Right. 00:04:45.879 --> 00:04:48.259 A blurry black and white fax. It was incredibly 00:04:48.259 --> 00:04:50.459 high effort. Then think about selling a home. 00:04:50.939 --> 00:04:53.339 Then financing that purchase. And then the closing 00:04:53.339 --> 00:04:56.240 process. My God, the closing. You're dealing 00:04:56.240 --> 00:04:58.720 with valuation, title searches, escrow accounts, 00:04:58.959 --> 00:05:01.600 title insurance. The stack of paper at the closing 00:05:01.600 --> 00:05:04.560 table is always an inch thick. At least. And 00:05:04.560 --> 00:05:06.540 then even once you actually own it or rent it, 00:05:06.600 --> 00:05:08.300 there's the ongoing management. A pipe bursts. 00:05:08.439 --> 00:05:11.259 The AC goes out. Every single one of those steps 00:05:11.259 --> 00:05:13.160 has traditionally been a major friction point. 00:05:13.240 --> 00:05:16.199 High effort, high cost, and very low transparency. 00:05:16.860 --> 00:05:19.519 It's so true. You usually have absolutely no 00:05:19.519 --> 00:05:21.519 idea what's happening in the black box of the 00:05:21.519 --> 00:05:23.399 transaction. You just get these cryptic updates 00:05:23.399 --> 00:05:25.740 and wait for a phone call from a lawyer saying 00:05:25.740 --> 00:05:28.839 it's done or, you know, the dreaded we have a 00:05:28.839 --> 00:05:31.899 problem. Exactly. And the primary goal of most 00:05:31.899 --> 00:05:34.120 real estate technology, especially on the residential 00:05:34.120 --> 00:05:37.600 side, is to grease those gears to reduce that 00:05:37.600 --> 00:05:40.480 friction. But it's not just residential. This 00:05:40.480 --> 00:05:42.560 extends to commercial real estate, construction, 00:05:42.980 --> 00:05:45.480 urban planning, everything. The sources we're 00:05:45.480 --> 00:05:48.339 looking at today. break PropTech down into five 00:05:48.339 --> 00:05:51.160 major pillars or categories, which is a really 00:05:51.160 --> 00:05:53.379 useful way to get a handle on it. Okay, let's 00:05:53.379 --> 00:05:54.620 walk through these pillars because I think this 00:05:54.620 --> 00:05:57.420 helps organize the chaos. The first one is something 00:05:57.420 --> 00:05:59.060 that sounds like it's straight out of a sci -fi 00:05:59.060 --> 00:06:02.519 movie. Smart buildings and IoT. And IoT is the 00:06:02.519 --> 00:06:04.800 Internet of Things. This is a huge and rapidly 00:06:04.800 --> 00:06:07.180 growing category. This is all about the physical 00:06:07.180 --> 00:06:08.959 hardware in a building and the software that 00:06:08.959 --> 00:06:10.639 talks to it. And we're not just talking about 00:06:10.639 --> 00:06:12.740 asking Alexa to turn on the lights in your living 00:06:12.740 --> 00:06:14.660 room, though that is, you know, the consumer 00:06:14.660 --> 00:06:16.899 edge of it. Right. This is on a much bigger scale, 00:06:16.980 --> 00:06:18.980 like a whole office tower or apartment complex. 00:06:19.199 --> 00:06:22.199 Exactly. In a commercial context or a large residential 00:06:22.199 --> 00:06:24.500 complex, this is all about operational efficiency. 00:06:24.779 --> 00:06:27.100 It's about monitoring the heartbeat of a building 00:06:27.100 --> 00:06:30.600 in real time. You have sensors on the HVCC that's 00:06:30.600 --> 00:06:33.959 heating, ventilation and air. You have sensors 00:06:33.959 --> 00:06:36.220 on the lighting, on the security systems, on 00:06:36.220 --> 00:06:39.980 water flow, on elevators, on environmental monitors. 00:06:40.399 --> 00:06:43.000 And what's the payoff there? Is it just a cool 00:06:43.000 --> 00:06:45.500 feature to tell investors about? Or is there 00:06:45.500 --> 00:06:47.560 a hard return on investors? Whoa, it's all about 00:06:47.560 --> 00:06:49.980 the money. I mean, it is cool, but it's about... 00:06:50.240 --> 00:06:53.079 Cutting costs. If you can monitor exactly how 00:06:53.079 --> 00:06:55.439 energy is being used, you can optimize it minute 00:06:55.439 --> 00:06:57.939 by minute. If you know that the east side of 00:06:57.939 --> 00:06:59.699 the building is getting blasted with sun at 8 00:06:59.699 --> 00:07:01.939 a .m., the building management system, the BMS, 00:07:02.180 --> 00:07:04.680 can automatically lower the blinds in just that 00:07:04.680 --> 00:07:07.699 zone and ramp up the AC there while turning it 00:07:07.699 --> 00:07:09.680 down on the shaded west side. So it's granular 00:07:09.680 --> 00:07:11.920 control instead of just blasting the AC for the 00:07:11.920 --> 00:07:14.399 whole building. Precisely. You stop wasting energy 00:07:14.399 --> 00:07:17.019 on empty rooms or floors. Over the life of a 00:07:17.019 --> 00:07:19.600 building, that adds up to millions of dollars. 00:07:19.600 --> 00:07:22.759 That makes total sense. But the notes also mention 00:07:22.759 --> 00:07:26.339 predictive maintenance. I love the sound of that. 00:07:26.480 --> 00:07:28.819 The idea of fixing things before they actually 00:07:28.819 --> 00:07:31.899 break. This is the real game changer for asset 00:07:31.899 --> 00:07:35.040 managers. It's a huge deal. Imagine a skyscraper 00:07:35.040 --> 00:07:38.079 with, say, 20 elevators. In the old days, you 00:07:38.079 --> 00:07:40.759 just waited for one to break. And it always breaks 00:07:40.759 --> 00:07:43.279 at 5 p .m. on a Friday with people inside. Always. 00:07:43.360 --> 00:07:46.459 It stalls between floors, trapping people. It's 00:07:46.459 --> 00:07:49.829 a crisis. Residents are angry. call the repair 00:07:49.829 --> 00:07:52.430 company, pay emergency rates, and that elevator 00:07:52.430 --> 00:07:55.870 is out of commission for three days. It's a nightmare 00:07:55.870 --> 00:07:58.129 scenario. The classic out -of -order sign taped 00:07:58.129 --> 00:08:01.209 to the door. Exactly. With IoT, you have sensors 00:08:01.209 --> 00:08:03.829 on the elevator motors. They're constantly monitoring 00:08:03.829 --> 00:08:07.050 vibration, heat, and speed. They can detect a 00:08:07.050 --> 00:08:09.490 slight anomaly, a wobble that a human would never 00:08:09.490 --> 00:08:11.709 feel, or a temperature spike of just two degrees. 00:08:12.110 --> 00:08:15.310 That is a known precursor to a specific type 00:08:15.310 --> 00:08:17.509 of failure. So the system knows the motor is 00:08:17.509 --> 00:08:19.689 getting sick before it has... any symptoms. That's 00:08:19.689 --> 00:08:22.129 a perfect way to put it. The system analyzes 00:08:22.129 --> 00:08:24.709 this trend data and generates a work order automatically. 00:08:25.089 --> 00:08:28.269 It says motor in elevator seven is showing signs 00:08:28.269 --> 00:08:31.509 of bearing fatigue. Schedule non -emergency maintenance 00:08:31.509 --> 00:08:34.289 within the next two weeks. So the elevator gets 00:08:34.289 --> 00:08:37.210 fixed at 2 a .m. on a Tuesday when no one is 00:08:37.210 --> 00:08:39.970 using it and a crisis is completely averted. 00:08:40.169 --> 00:08:42.659 Precisely. It shifts property management from 00:08:42.659 --> 00:08:45.179 being reactive, constantly putting out fires, 00:08:45.320 --> 00:08:48.259 to being proactive. And that saves a fortune 00:08:48.259 --> 00:08:50.860 in emergency repairs, but also in tenant retention. 00:08:51.179 --> 00:08:53.279 People get fed up with broken amenities and they 00:08:53.279 --> 00:08:55.340 leave. This helps keep them happy. Okay, that 00:08:55.340 --> 00:08:57.200 makes a ton of sense. Let's move to pillar number 00:08:57.200 --> 00:09:01.440 two, AI and data analytics. This feels like the 00:09:01.440 --> 00:09:03.360 buzzword of the century, but how does it actually 00:09:03.360 --> 00:09:05.830 apply to bricks and mortar? This is all about 00:09:05.830 --> 00:09:08.289 processing massive, and I mean truly massive, 00:09:08.409 --> 00:09:11.529 volumes of market data. Real estate as an industry 00:09:11.529 --> 00:09:13.870 generates a ton of data. But for decades, that 00:09:13.870 --> 00:09:16.350 data was locked away. It was in filing cabinets, 00:09:16.529 --> 00:09:19.309 disconnected spreadsheets, or simply inside the 00:09:19.309 --> 00:09:21.210 head of a local real estate agent who'd been 00:09:21.210 --> 00:09:23.549 in the business for 40 years. Right, that institutional 00:09:23.549 --> 00:09:27.460 knowledge. Exactly. AI allows us to synthesize 00:09:27.460 --> 00:09:30.559 all of that and much more at a scale and speed 00:09:30.559 --> 00:09:32.940 that's just impossible for a human. So give me 00:09:32.940 --> 00:09:35.340 a real world example of this that a listener 00:09:35.340 --> 00:09:37.200 might have actually encountered. The most common 00:09:37.200 --> 00:09:40.259 one for the average person is the AVM, the automated 00:09:40.259 --> 00:09:43.509 valuation model. Ah. Right. The Zestment. When 00:09:43.509 --> 00:09:46.289 you go to a website like Zillow or Redfin, you 00:09:46.289 --> 00:09:48.690 type in your address and it instantly spits out 00:09:48.690 --> 00:09:52.629 a number. Your house is worth $452 ,000. That's 00:09:52.629 --> 00:09:54.970 AI. And the early versions were pretty basic. 00:09:55.009 --> 00:09:57.210 They just looked at comparable sales in the area, 00:09:57.389 --> 00:10:00.169 square footage, number of beds and baths. And 00:10:00.169 --> 00:10:03.840 they were famously not always accurate. Famously 00:10:03.840 --> 00:10:06.100 inaccurate at times, yes. But they're getting 00:10:06.100 --> 00:10:08.840 much, much better. The newer models are using 00:10:08.840 --> 00:10:11.000 things like computer vision. Computer vision. 00:10:11.080 --> 00:10:13.500 Do you mean the AI looking at the photos of the 00:10:13.500 --> 00:10:16.840 house? Exactly. The AI scans the listing photos. 00:10:17.139 --> 00:10:20.220 It's been trained on millions of images. It can 00:10:20.220 --> 00:10:22.519 identify features and assess their quality. It 00:10:22.519 --> 00:10:24.980 can see, oh, that's a Viking range and a Sub 00:10:24.980 --> 00:10:28.120 -Zero fridge in the kitchen. Or those kitchen 00:10:28.120 --> 00:10:31.120 cabinets look like they're from 1985. Or that 00:10:31.120 --> 00:10:34.360 carpet is heavily worn. It can even analyze the 00:10:34.360 --> 00:10:36.480 text of the listing description for keywords. 00:10:36.840 --> 00:10:39.440 That is wild. So it's adjusting the valuation 00:10:39.440 --> 00:10:41.720 based on the actual condition and features of 00:10:41.720 --> 00:10:44.039 the property, not just the raw stats. Precisely. 00:10:44.039 --> 00:10:46.919 It's adding a layer of qualitative analysis that 00:10:46.919 --> 00:10:49.440 previously required a human appraiser to physically 00:10:49.440 --> 00:10:51.639 walk through the house. So it's basically a super 00:10:51.639 --> 00:10:53.840 brain for figuring out what stuff is worth. And 00:10:53.840 --> 00:10:55.759 it's not just for buying and selling. It's used 00:10:55.759 --> 00:10:58.559 for rental price forecasting, telling a landlord 00:10:58.559 --> 00:11:01.019 exactly what they should charge to minimize vacancy 00:11:01.019 --> 00:11:04.159 days. for sophisticated tenant screening, looking 00:11:04.159 --> 00:11:06.460 at more than just a credit score. And for the 00:11:06.460 --> 00:11:09.179 big players, the huge investment funds, it's 00:11:09.179 --> 00:11:11.840 used for portfolio optimization. So instead of 00:11:11.840 --> 00:11:14.340 just a gut feeling that, I don't know, Austin's 00:11:14.340 --> 00:11:16.759 getting hot, they have data points showing migration 00:11:16.759 --> 00:11:19.700 patterns, job growth statistics, and building 00:11:19.700 --> 00:11:22.440 permits before the prices even spike. Exactly. 00:11:22.820 --> 00:11:26.539 The AI can identify emerging markets or sub -markets 00:11:26.539 --> 00:11:28.799 right down to the neighborhood level that humans 00:11:28.799 --> 00:11:31.440 might risk. It removes the guesswork and the 00:11:31.440 --> 00:11:34.860 emotion. Okay, let's move to Pillar 3. This one 00:11:34.860 --> 00:11:36.679 sounds a little less sexy, but I have a feeling 00:11:36.679 --> 00:11:38.919 it's the engine room of the industry. management 00:11:38.919 --> 00:11:41.500 and operations platforms. It might not make the 00:11:41.500 --> 00:11:44.080 headlines like AI does, but you are spot on. 00:11:44.179 --> 00:11:47.419 This is the back office revolution. This is where 00:11:47.419 --> 00:11:50.000 the actual day -to -day work gets done. We're 00:11:50.000 --> 00:11:52.240 talking about cloud -based software as a service 00:11:52.240 --> 00:11:54.860 or SAAS, platforms for lease administration, 00:11:55.159 --> 00:11:57.340 maintenance requests, accounting, and tenant 00:11:57.340 --> 00:11:59.840 communication. So basically getting rid of all 00:11:59.840 --> 00:12:01.840 the filing cabinets and sticky notes. Completely. 00:12:01.960 --> 00:12:04.580 This is for landlords, asset managers, and corporate 00:12:04.580 --> 00:12:06.820 real estate managers. It's all about creating 00:12:06.820 --> 00:12:09.799 transparency. and a seamless workflow. Think 00:12:09.799 --> 00:12:12.759 about the old way. A tenant has a leaky faucet. 00:12:12.799 --> 00:12:14.960 They call the landlord's office. Maybe they get 00:12:14.960 --> 00:12:17.480 an answering machine, leave a voicemail. The 00:12:17.480 --> 00:12:19.759 property manager listens to it later, writes 00:12:19.759 --> 00:12:22.179 the details on a sticky note. That sticky note 00:12:22.179 --> 00:12:25.039 gets lost under a pile of papers. Maybe they 00:12:25.039 --> 00:12:27.879 call a plumber a day later. The plumber sends 00:12:27.879 --> 00:12:30.779 a paper invoice three weeks after the job. It's 00:12:30.779 --> 00:12:33.019 a mess. And meanwhile, the tenant is furious 00:12:33.019 --> 00:12:35.559 and the water damage under the sink is getting 00:12:35.559 --> 00:12:38.679 worse and worse. Exactly. With these new platforms, 00:12:38.980 --> 00:12:41.460 the tenant opens an app on their phone. They 00:12:41.460 --> 00:12:43.600 snap a photo of the leak, maybe add a quick note 00:12:43.600 --> 00:12:46.480 and hit submit. The system automatically reads 00:12:46.480 --> 00:12:49.700 it, categorizes it as a medium priority plumbing 00:12:49.700 --> 00:12:52.539 issue and routes the work order to the company's 00:12:52.539 --> 00:12:54.779 approved plumber. And the plumber gets a notification 00:12:54.779 --> 00:12:57.320 on their phone. Instantly. The plumber can accept 00:12:57.320 --> 00:12:59.240 the job on their phone. The tenant then gets 00:12:59.240 --> 00:13:02.059 an automatic notification. Mario the plumber 00:13:02.059 --> 00:13:04.500 is scheduled to arrive between 2 and 4 p .m. 00:13:04.500 --> 00:13:07.779 tomorrow. When the job is done, Mario marks it 00:13:07.779 --> 00:13:10.220 complete, maybe uploads a photo of the repair 00:13:10.220 --> 00:13:12.940 and the invoice is generated digitally and flows 00:13:12.940 --> 00:13:15.220 right into the landlord's accounting software. 00:13:15.500 --> 00:13:17.320 I can see how that connects directly back to 00:13:17.320 --> 00:13:19.919 that friction point. If you're a landlord with 00:13:19.919 --> 00:13:23.179 500 units, doing that old process on paper is 00:13:23.179 --> 00:13:26.620 just impossible to scale. It's pure chaos. With 00:13:26.620 --> 00:13:29.100 these platforms, it's a single dashboard. The 00:13:29.100 --> 00:13:31.440 landlord can see their entire portfolio's health 00:13:31.440 --> 00:13:34.399 in real time, who has paid rent, what maintenance 00:13:34.399 --> 00:13:36.919 is outstanding, what leases are expiring next 00:13:36.919 --> 00:13:40.299 month, all on one screen. It allows one person 00:13:40.299 --> 00:13:42.379 to manage a portfolio that used to require a 00:13:42.379 --> 00:13:44.840 team of five. It scales the ability to manage 00:13:44.840 --> 00:13:46.899 property efficiently. All right, pillar number 00:13:46.899 --> 00:13:48.960 four. This is the one I think we're all most 00:13:48.960 --> 00:13:52.159 familiar with. Digital marketplaces. Yes, this 00:13:52.159 --> 00:13:54.820 is absolutely the most visible consumer facing 00:13:54.820 --> 00:13:58.100 side of prop tech. The online portals, the listing 00:13:58.100 --> 00:14:00.919 services. The Zillows, the Redfins, the right 00:14:00.919 --> 00:14:02.980 moves of the world. Correct. These platforms 00:14:02.980 --> 00:14:05.279 fundamentally revolutionized the search function. 00:14:05.600 --> 00:14:07.799 Before these existed, if you wanted to know what 00:14:07.799 --> 00:14:09.980 houses were for sale in your town, you had to 00:14:09.980 --> 00:14:11.539 call a real estate agent or look in the newspaper. 00:14:12.080 --> 00:14:14.379 There was a gatekeeper. Information asymmetry 00:14:14.379 --> 00:14:16.519 was the entire business model. I remember looking 00:14:16.519 --> 00:14:18.720 at newspaper listings with my parents. You'd 00:14:18.720 --> 00:14:21.980 get one tiny grainy black and white photo and 00:14:21.980 --> 00:14:24.759 a three line description. Charming fixer upper 00:14:24.759 --> 00:14:27.980 with potential. Which was code for dilapidated 00:14:27.980 --> 00:14:30.840 shack that needs to be torn down. And you had 00:14:30.840 --> 00:14:33.580 no idea if the price was fair because you couldn't 00:14:33.580 --> 00:14:35.460 easily see what the house down the street sold 00:14:35.460 --> 00:14:38.820 for six months ago. That data was locked away 00:14:38.820 --> 00:14:41.720 in the multiple listing service, the MLS, which 00:14:41.720 --> 00:14:44.759 only agents could access. So the agent held all 00:14:44.759 --> 00:14:47.820 the power. Completely. Digital marketplaces broke 00:14:47.820 --> 00:14:49.779 that open. They brought transparent pricing, 00:14:50.120 --> 00:14:52.519 extensive photo galleries, virtual tours, school 00:14:52.519 --> 00:14:54.759 ratings, crime maps, and real -time engagement. 00:14:55.080 --> 00:14:57.500 They leveled the playing field between the buyer 00:14:57.500 --> 00:14:59.759 and the seller. It really empowered the consumer. 00:14:59.840 --> 00:15:01.720 You can sit on your couch at midnight and browse 00:15:01.720 --> 00:15:04.100 homes in a city a thousand miles away. You can 00:15:04.100 --> 00:15:06.019 become a local expert before you even talk to 00:15:06.019 --> 00:15:09.059 an agent. Exactly. It decoupled the search process 00:15:09.059 --> 00:15:11.139 from the physical location of the buyer and the 00:15:11.139 --> 00:15:13.740 agent. It was a monumental shift. And finally, 00:15:13.840 --> 00:15:17.620 pillar number five. This one feels very, very 00:15:17.620 --> 00:15:21.059 current given the global focus on climate. Green 00:15:21.059 --> 00:15:24.220 prop tech. Sustainability. Yes, this is becoming 00:15:24.220 --> 00:15:26.620 a massive driver in the industry, especially 00:15:26.620 --> 00:15:29.740 in commercial real estate. Green prop tech involves 00:15:29.740 --> 00:15:33.019 everything from energy management software to 00:15:33.019 --> 00:15:38.179 tools for ESG reporting. And ESG is environmental, 00:15:38.519 --> 00:15:41.620 social, and governance. Correct. It's a framework 00:15:41.620 --> 00:15:45.039 for evaluating a company's or a building's broader 00:15:45.039 --> 00:15:47.940 impact. What's driving that? Is it just tenants 00:15:47.940 --> 00:15:50.340 wanting to be eco -friendly, or is there a bigger 00:15:50.340 --> 00:15:52.879 hammer behind it? It's both. But the hammer is 00:15:52.879 --> 00:15:55.399 getting much, much bigger. Regulatory requirements 00:15:55.399 --> 00:15:58.399 are tightening everywhere. Cities like New York, 00:15:58.480 --> 00:16:01.659 with Local Law 97, and London are passing very 00:16:01.659 --> 00:16:04.179 strict laws that will heavily fine building owners 00:16:04.179 --> 00:16:06.159 if they don't reduce their carbon footprints 00:16:06.159 --> 00:16:08.360 and improve their energy efficiency. So it's 00:16:08.360 --> 00:16:10.419 about compliance. If you don't comply, you pay. 00:16:10.639 --> 00:16:12.580 It starts with compliance, but it's quickly becoming 00:16:12.580 --> 00:16:15.000 about value. We're seeing what the industry calls 00:16:15.000 --> 00:16:17.899 a brown discount emerging in the market. An old, 00:16:17.919 --> 00:16:20.179 inefficient billing might sell for less because 00:16:20.179 --> 00:16:21.980 the buyer knows they'll have to spend millions 00:16:21.980 --> 00:16:24.259 upgrading it to meet future regulations. And 00:16:24.259 --> 00:16:27.519 the opposite is a green premium. Exactly. A building 00:16:27.519 --> 00:16:30.360 that is LED certified or has a high energy efficiency 00:16:30.360 --> 00:16:33.299 rating can command higher rents and a higher 00:16:33.299 --> 00:16:36.700 sale price. And green prop tech provides the 00:16:36.700 --> 00:16:39.659 tools to measure that consumption, report it 00:16:39.659 --> 00:16:42.460 to regulators and identify the most cost effective 00:16:42.460 --> 00:16:45.100 ways to reduce it. It provides the proof. So 00:16:45.100 --> 00:16:46.600 if you have the data to prove your building is 00:16:46.600 --> 00:16:49.399 green, it's literally worth more money. The tech 00:16:49.399 --> 00:16:52.320 makes the invisible. That's a great way of putting 00:16:52.320 --> 00:16:55.080 it. It turns energy efficiency from a vague concept 00:16:55.080 --> 00:16:57.710 into a hard number on a balance sheet. So we 00:16:57.710 --> 00:16:59.870 have these five pillars, smart buildings with 00:16:59.870 --> 00:17:03.470 IoT, AI, and data analytics, management platforms, 00:17:03.830 --> 00:17:06.650 digital marketplaces, and green tech. It feels 00:17:06.650 --> 00:17:08.609 like a really robust ecosystem now, but as you 00:17:08.609 --> 00:17:10.789 said, it didn't just appear overnight. No, not 00:17:10.789 --> 00:17:12.549 at all. And this is where it gets really interesting. 00:17:12.730 --> 00:17:14.809 To understand where we are now, we have to look 00:17:14.809 --> 00:17:16.930 at the timeline. The sources we're looking at 00:17:16.930 --> 00:17:18.529 divide the history of real estate technology 00:17:18.529 --> 00:17:21.109 into three distinct stages. I love a good timeline. 00:17:21.690 --> 00:17:23.269 Take us back. Where does this story actually 00:17:23.269 --> 00:17:26.029 start? We have to go back to the 1980s, stage 00:17:26.029 --> 00:17:29.589 one, the PC era, which runs from about 1980 to 00:17:29.589 --> 00:17:33.230 2000. The era of the giant beige desktop computer, 00:17:33.410 --> 00:17:38.150 the floppy disk, and very questionable fashion 00:17:38.150 --> 00:17:40.549 choices. And crucially for real estate, the era 00:17:40.549 --> 00:17:43.230 of the spreadsheet. When personal computing became 00:17:43.230 --> 00:17:46.410 common in offices and software like Lotus 1 -2 00:17:46.410 --> 00:17:49.390 -3 and then Microsoft Excel was introduced, it 00:17:49.390 --> 00:17:52.329 was a quiet but profound game changer for commercial 00:17:52.329 --> 00:17:54.849 real estate companies. It sounds funny to think 00:17:54.849 --> 00:17:57.490 of Excel as disruptive tech, but I guess before 00:17:57.490 --> 00:17:59.329 that, everything was done on ledger books with 00:17:59.329 --> 00:18:02.130 calculators. Exactly. Imagine you're an analyst 00:18:02.130 --> 00:18:05.160 trying to calculate the internal rate of... return, 00:18:05.240 --> 00:18:08.279 the IRR, on a 30 -year commercial mortgage by 00:18:08.279 --> 00:18:11.180 hand. You have to account for variable rent increases, 00:18:11.480 --> 00:18:14.240 expense inflation, changing tax laws, depreciation 00:18:14.240 --> 00:18:16.779 schedules. It's incredibly complex. And if you 00:18:16.779 --> 00:18:19.019 wanted to change one variable, like what if interest 00:18:19.019 --> 00:18:21.019 rates go up by half a percent? You had to start 00:18:21.019 --> 00:18:23.200 over. You had to recalculate the entire ledger 00:18:23.200 --> 00:18:26.259 by hand. It would take hours, maybe days. So 00:18:26.259 --> 00:18:28.099 you just didn't do it. You couldn't really model 00:18:28.099 --> 00:18:30.119 different scenarios. You just had to pick a path 00:18:30.119 --> 00:18:32.200 and hope for the best. Or you kept the deals 00:18:32.200 --> 00:18:35.609 incredibly simple. Precisely. Excel allowed for 00:18:35.609 --> 00:18:38.710 instant what -if analysis. You change one cell 00:18:38.710 --> 00:18:41.289 and the entire financial model updates instantly. 00:18:41.849 --> 00:18:44.549 This allowed investors to become much more sophisticated 00:18:44.549 --> 00:18:47.170 in how they structure deals. It let them manage 00:18:47.170 --> 00:18:50.690 larger, more complex portfolios. It wasn't flashy 00:18:50.690 --> 00:18:54.089 consumer tech, but it was the first step in digitizing 00:18:54.089 --> 00:18:56.549 the math behind the real estate industry. So 00:18:56.549 --> 00:18:58.990 the 80s and 90s were all about digitizing the 00:18:58.990 --> 00:19:01.390 back office math. Then we hit the year 2000, 00:19:01.670 --> 00:19:04.670 stage two. We enter the dot -com shift. This 00:19:04.670 --> 00:19:08.009 ran roughly from 2000 to 2008. This is the period 00:19:08.009 --> 00:19:10.029 when the internet transitions from a niche academic 00:19:10.029 --> 00:19:13.430 tool to a household utility. And we saw the great 00:19:13.430 --> 00:19:15.990 migration from print to digital media across 00:19:15.990 --> 00:19:18.809 every industry. Right. In real estate, this is 00:19:18.809 --> 00:19:21.029 when companies started targeting consumers directly 00:19:21.029 --> 00:19:23.869 with online listings. The absolute dominance 00:19:23.869 --> 00:19:26.630 of the newspaper listing died in this era. We 00:19:26.630 --> 00:19:28.809 saw the first wave of companies putting property 00:19:28.809 --> 00:19:30.730 listings online. You didn't have to wait for 00:19:30.730 --> 00:19:32.769 the Sunday paper anymore. But the Internet back 00:19:32.769 --> 00:19:35.910 then was still, well, let's call it Web 1 .0. 00:19:35.950 --> 00:19:37.990 It was pretty static, wasn't it? You could see 00:19:37.990 --> 00:19:39.890 a list, but you couldn't do much with it. It 00:19:39.890 --> 00:19:42.269 was very much brochureware. You saw a few pictures 00:19:42.269 --> 00:19:43.869 and a phone number. You still had to pick up 00:19:43.869 --> 00:19:46.690 the phone and call. The user experience was clunky. 00:19:47.289 --> 00:19:49.809 But it was the critical first step in breaking 00:19:49.809 --> 00:19:51.750 down that information barrier we talked about. 00:19:51.950 --> 00:19:54.630 Which leads us directly to stage three, the high 00:19:54.630 --> 00:19:57.490 -speed era, starting around 2008 and continuing 00:19:57.490 --> 00:20:00.230 to the present day. What changed? What was the 00:20:00.230 --> 00:20:02.769 big enabler? Well, a couple of things, really. 00:20:02.890 --> 00:20:05.609 But the main technological drivers were bandwidth 00:20:05.609 --> 00:20:08.720 and mobile. the widespread availability of high 00:20:08.720 --> 00:20:10.559 -speed internet, and the launch of the iPhone 00:20:10.559 --> 00:20:13.480 in 2007. Right. Suddenly you had competing power 00:20:13.480 --> 00:20:15.759 and an internet connection in your pocket. And 00:20:15.759 --> 00:20:18.059 that allowed for the cloud migration. Services 00:20:18.059 --> 00:20:20.660 and data could move fully online and be accessed 00:20:20.660 --> 00:20:23.259 from anywhere. This is when a company like Zillow 00:20:23.259 --> 00:20:25.180 really took off. They weren't just putting a 00:20:25.180 --> 00:20:27.140 list of properties online. They were layering 00:20:27.140 --> 00:20:29.960 it onto interactive maps. They were moving geographic 00:20:29.960 --> 00:20:33.420 data, valuations, tax records, and advice onto 00:20:33.420 --> 00:20:35.500 the web. You weren't just looking at a list. 00:20:35.599 --> 00:20:38.420 You were exploring a dynamic, data -rich environment. 00:20:38.799 --> 00:20:41.079 And this era also gave birth to something else 00:20:41.079 --> 00:20:42.920 that's mentioned in the source material, the 00:20:42.920 --> 00:20:46.660 sharing economy. Yes. This is a critical cultural 00:20:46.660 --> 00:20:49.380 and economic shift that ran parallel to the tech 00:20:49.380 --> 00:20:52.559 improvements. Platform economics allowed property 00:20:52.559 --> 00:20:54.680 owners to monetize their assets in a completely 00:20:54.680 --> 00:20:56.920 new way. We're talking about the rise of Airbnb 00:20:56.920 --> 00:21:00.500 and WeWork here, right? Precisely. Before this... 00:21:00.750 --> 00:21:02.930 A house was a place you lived in or a place you 00:21:02.930 --> 00:21:05.890 rented out on a long term one year lease. It 00:21:05.890 --> 00:21:09.430 was a binary state, occupied or vacant. Airbnb 00:21:09.430 --> 00:21:11.690 came along and said, no, this is a flexible asset 00:21:11.690 --> 00:21:13.470 you can rent out for three days while you're 00:21:13.470 --> 00:21:15.609 out of town. It fractionalized the use of the 00:21:15.609 --> 00:21:18.250 asset. Exactly. We worked at the same for office 00:21:18.250 --> 00:21:20.609 space. Instead of signing a 10 -year lease for 00:21:20.609 --> 00:21:23.349 an entire floor, a startup could rent three desks 00:21:23.349 --> 00:21:26.150 for a month. It turned real estate from a fixed, 00:21:26.269 --> 00:21:29.309 long -term asset into a flexible, on -demand 00:21:29.309 --> 00:21:31.750 service. That is such a fundamental shift. Space 00:21:31.750 --> 00:21:33.950 as a service. It's not just a piece of technology. 00:21:34.369 --> 00:21:37.150 It's a complete change in mindset about what 00:21:37.150 --> 00:21:40.049 ownership and utilization mean. It is. It's all 00:21:40.049 --> 00:21:43.049 about utilization. A spare bedroom is empty most 00:21:43.049 --> 00:21:45.170 of the year. A house is empty when the owner 00:21:45.170 --> 00:21:48.460 is on vacation. That's wasted capacity. Airbnb 00:21:48.460 --> 00:21:51.299 created a platform to unlock that capacity. It 00:21:51.299 --> 00:21:53.619 made the asset more productive. And that required 00:21:53.619 --> 00:21:56.839 incredibly sophisticated tech to handle the bookings, 00:21:56.859 --> 00:21:59.059 the payments, the reviews, the insurance, and 00:21:59.059 --> 00:22:01.079 the trust verification. And that productivity, 00:22:01.279 --> 00:22:04.640 that unlocking of value that attracts attention. 00:22:04.960 --> 00:22:06.839 And by attention, I mean money. I was looking 00:22:06.839 --> 00:22:08.359 at these investment numbers in our notes, and 00:22:08.359 --> 00:22:10.369 they are genuinely staggering. They really are. 00:22:10.450 --> 00:22:12.609 If you follow the money, you can see exactly 00:22:12.609 --> 00:22:15.430 when this sector went from a niche interest to 00:22:15.430 --> 00:22:18.450 a major focus for venture capital. The 2010s 00:22:18.450 --> 00:22:20.609 were the golden age for prop tech startups. OK, 00:22:20.670 --> 00:22:22.470 so give us the highlights. Let's trace the explosion. 00:22:22.769 --> 00:22:24.970 Let's look at 2015 as a key inflection point. 00:22:25.089 --> 00:22:28.150 In that year alone, investors poured $1 .7 billion 00:22:28.150 --> 00:22:32.470 into the sector across about 190 deals. $1 .7 00:22:32.470 --> 00:22:34.970 billion. That's a lot of money. But in the grand 00:22:34.970 --> 00:22:37.069 scheme of Silicon Valley, is it a huge number? 00:22:37.289 --> 00:22:40.130 It's the growth rate that tells the story. That 00:22:40.130 --> 00:22:42.829 2015 figure was a 50 % increase from the year 00:22:42.829 --> 00:22:45.390 before. But here's the crazy part. Compared to 00:22:45.390 --> 00:22:49.109 the funding levels in 2011, it was an 821 % increase. 00:22:49.390 --> 00:22:51.970 Wow. Okay, so in four years, funding went up 00:22:51.970 --> 00:22:54.390 more than 800%. That's not just growth. That's 00:22:54.390 --> 00:22:57.069 a rocket ship. And it didn't stop there. It accelerated. 00:22:57.410 --> 00:23:00.970 By 2017, global environment reached $8 .5 billion. 00:23:01.349 --> 00:23:04.170 But then look at 2019. In just the first six 00:23:04.170 --> 00:23:08.170 months of 2019, VC funding hit $12 .9 billion. 00:23:08.730 --> 00:23:10.869 Wait, say that again? In six months of 2019, 00:23:11.309 --> 00:23:13.529 they raised more than the entire record -breaking 00:23:13.529 --> 00:23:16.269 year of 2017. Exactly. It was an absolute gold 00:23:16.269 --> 00:23:18.690 rush. VCs and investors finally realized that 00:23:18.690 --> 00:23:20.509 real estate is the largest asset class in the 00:23:20.509 --> 00:23:22.890 world. We are talking about hundreds of trillions 00:23:22.890 --> 00:23:25.970 of dollars globally, and it was severely underdigitized. 00:23:26.089 --> 00:23:28.509 The potential for efficiency gains, and therefore 00:23:28.509 --> 00:23:31.549 profit, was just astronomical. They saw it as 00:23:31.549 --> 00:23:33.289 the last great frontier. tier for tech disruption. 00:23:33.589 --> 00:23:35.329 But then, of course, the world hit a giant wall. 00:23:35.569 --> 00:23:38.730 2020, the COVID -19 pandemic. How did that impact 00:23:38.730 --> 00:23:41.170 this rocket ship? Did it crash it or did it somehow 00:23:41.170 --> 00:23:44.640 add more fuel? It acted as a massive and I would 00:23:44.640 --> 00:23:47.519 say painful catalyst. It jolted management companies 00:23:47.519 --> 00:23:50.700 and landlords out of their business as usual 00:23:50.700 --> 00:23:53.680 mindset. I can imagine. Suddenly you literally 00:23:53.680 --> 00:23:56.039 can't do in -person viewings. You can't pass 00:23:56.039 --> 00:23:58.200 physical papers back and forth for signatures. 00:23:58.500 --> 00:24:00.920 Your entire business model is broken overnight. 00:24:01.220 --> 00:24:03.140 Right. If you didn't have a digital solution 00:24:03.140 --> 00:24:06.119 in place, you were dead in the water. The pandemic 00:24:06.119 --> 00:24:09.539 forced the laggards to adopt technology. It accelerated 00:24:09.539 --> 00:24:12.259 the adoption of IT solutions for remote management 00:24:12.259 --> 00:24:14.900 and closing deals without any physical presence. 00:24:15.099 --> 00:24:17.759 Things like digital notaries, virtual 3D tours. 00:24:17.900 --> 00:24:20.140 These went from being nice to have gimmicks to 00:24:20.140 --> 00:24:22.440 business -critical tools overnight. I remember 00:24:22.440 --> 00:24:24.579 looking for an apartment online during the pandemic. 00:24:24.799 --> 00:24:27.779 The 3D tours got incredibly good really fast. 00:24:27.880 --> 00:24:29.759 You could walk through the entire space on your 00:24:29.759 --> 00:24:32.579 screen, even measure the walls. Exactly. Companies 00:24:32.579 --> 00:24:34.500 like Matterport, which creates those virtual 00:24:34.500 --> 00:24:38.190 tours, And on the commercial side, the impact 00:24:38.190 --> 00:24:40.970 was even more profound and complex. The pandemic 00:24:40.970 --> 00:24:44.009 turbocharged e -commerce, which absolutely crushed 00:24:44.009 --> 00:24:46.769 traditional retail. That had a huge impact on 00:24:46.769 --> 00:24:49.269 commercial real estate valuations. And then there's 00:24:49.269 --> 00:24:52.410 the whole work from home phenomenon. The death 00:24:52.410 --> 00:24:55.630 of the office narrative. It forced office managers 00:24:55.630 --> 00:24:58.279 to rethink. Everything. They had to start thinking 00:24:58.279 --> 00:25:00.779 about things like air quality, occupancy tracking, 00:25:00.960 --> 00:25:03.859 and flexible socially distanced space. Right, 00:25:03.940 --> 00:25:05.680 because nobody wanted to touch a button in an 00:25:05.680 --> 00:25:08.920 elevator or sit in a crowded room breathing stale 00:25:08.920 --> 00:25:12.420 air. Exactly. All those smart building IoT technologies 00:25:12.420 --> 00:25:14.859 we talked about earlier, they suddenly became 00:25:14.859 --> 00:25:17.599 health and safety features. If you could tell 00:25:17.599 --> 00:25:20.079 your corporate tenants, we have sensors monitoring 00:25:20.079 --> 00:25:23.039 air quality in real time, and we've optimized 00:25:23.039 --> 00:25:25.900 the HVAC system for maximum fresh air exchange. 00:25:25.930 --> 00:25:28.609 that became a critical selling point to get people 00:25:28.609 --> 00:25:31.410 to feel safe coming back to the office. It shifted 00:25:31.410 --> 00:25:35.109 the value proposition from efficiency to well 00:25:35.109 --> 00:25:37.450 -being. So we have the history, we have the money, 00:25:37.490 --> 00:25:40.130 we have this massive pandemic acceleration. But 00:25:40.130 --> 00:25:41.769 I want to talk about what's happening right now 00:25:41.769 --> 00:25:43.910 at the cutting edge, because the sources mention 00:25:43.910 --> 00:25:45.910 some things that still sound very futuristic, 00:25:46.089 --> 00:25:48.809 but are actually being implemented today. One 00:25:48.809 --> 00:25:52.210 of the most intriguing and honestly most hyped 00:25:52.210 --> 00:25:55.089 areas is the use of blockchain in real estate. 00:25:55.549 --> 00:25:58.390 Now, when people hear blockchain, their mind 00:25:58.390 --> 00:26:00.589 immediately goes to Bitcoin and cryptocurrency. 00:26:01.630 --> 00:26:03.950 But we're not necessarily talking about buying 00:26:03.950 --> 00:26:06.089 a house with crypto here. No, although that does 00:26:06.089 --> 00:26:08.450 happen in some niche cases. We're talking about 00:26:08.450 --> 00:26:12.150 the underlying technology, the distributed immutable 00:26:12.150 --> 00:26:15.650 ledger. In real estate, blockchain is being explored 00:26:15.650 --> 00:26:19.049 for two main things, land registration and tracking 00:26:19.049 --> 00:26:21.349 property ownership. Why do we need that? I mean, 00:26:21.369 --> 00:26:23.029 isn't the county clerk's office with their big 00:26:23.029 --> 00:26:25.150 book of deeds good enough? In many developed 00:26:25.150 --> 00:26:27.710 countries, yes, it works, though it's incredibly 00:26:27.710 --> 00:26:30.789 slow and paper -based. Think about the process 00:26:30.789 --> 00:26:33.710 of a title search. When you buy a house, you 00:26:33.710 --> 00:26:35.809 pay a title company hundreds or thousands of 00:26:35.809 --> 00:26:37.890 dollars to send someone to dig through 50 or 00:26:37.890 --> 00:26:40.569 100 years of dusty records to make sure the person 00:26:40.569 --> 00:26:42.369 selling it actually owns it and that there are 00:26:42.369 --> 00:26:44.579 no liens against it. And that can take weeks 00:26:44.579 --> 00:26:47.079 and is a major bottleneck in the closing process. 00:26:47.339 --> 00:26:50.720 Exactly. If the title, the deed is tokenized 00:26:50.720 --> 00:26:53.140 and recorded on a blockchain, it creates a secure, 00:26:53.259 --> 00:26:55.759 immutable and instantly verifiable record of 00:26:55.759 --> 00:26:58.450 ownership. You could theoretically confirm the 00:26:58.450 --> 00:27:01.430 title in seconds, not weeks. So it's about trust, 00:27:01.509 --> 00:27:05.069 speed and cost reduction. Yes. And in the developing 00:27:05.069 --> 00:27:07.289 world, this isn't just an efficiency game. It's 00:27:07.289 --> 00:27:10.089 revolutionary. The economist Hernando de Soto 00:27:10.089 --> 00:27:13.130 talks about the concept of dead capital. There 00:27:13.130 --> 00:27:15.710 are trillions of dollars in assets held by people 00:27:15.710 --> 00:27:18.269 in developing nations. They live on land, they've 00:27:18.269 --> 00:27:21.609 built houses, but they have no formal legal paper 00:27:21.609 --> 00:27:24.269 proving they own it. So they can't use that asset. 00:27:24.720 --> 00:27:26.700 They can't get a loan against it to start a business 00:27:26.700 --> 00:27:29.720 or pay for education or improve their home. Exactly. 00:27:29.900 --> 00:27:33.119 It's capital, but it's dead. Blockchain provides 00:27:33.119 --> 00:27:36.579 a potentially secure, cheap, and incorruptible 00:27:36.579 --> 00:27:39.559 way to create and formalize these property records. 00:27:39.819 --> 00:27:42.279 It can empower billions of people to enter the 00:27:42.279 --> 00:27:45.000 formal financial system. It's an economic empowerment 00:27:45.000 --> 00:27:48.339 tool on a massive scale. That is a huge potential 00:27:48.339 --> 00:27:51.099 impact. It's way more important than just making 00:27:51.099 --> 00:27:53.539 the closing process a few weeks faster for a 00:27:53.539 --> 00:27:55.039 suburban homebuyer, though I'm sure they'd appreciate 00:27:55.039 --> 00:27:58.359 it too. Absolutely. Now, another really interesting 00:27:58.359 --> 00:28:00.579 trend mentioned in the sources is the growing 00:28:00.579 --> 00:28:03.299 involvement of government. Usually, we think 00:28:03.299 --> 00:28:06.279 of tech as the private sector running wild, but 00:28:06.279 --> 00:28:08.619 the sources highlight the UK government specifically 00:28:08.619 --> 00:28:11.500 getting involved. Yes, this is a fascinating 00:28:11.500 --> 00:28:14.400 shift. PropTech isn't just for profit -seeking 00:28:14.400 --> 00:28:17.319 companies anymore. It's entering the realm of 00:28:17.319 --> 00:28:20.740 town planning and the public sector. The UK government 00:28:20.740 --> 00:28:23.519 actually launched a PropTech Innovation Fund. 00:28:24.019 --> 00:28:25.799 What's the goal there? What are they funding? 00:28:26.400 --> 00:28:28.440 Initially, one of their big focuses was on what 00:28:28.440 --> 00:28:30.759 they call citizen involvement solutions. That 00:28:30.759 --> 00:28:33.160 sounds very bureaucratic. What does it actually 00:28:33.160 --> 00:28:36.180 mean in practice? Okay, so imagine a new high 00:28:36.180 --> 00:28:38.019 -rise development is proposed in your neighborhood. 00:28:39.019 --> 00:28:40.579 Traditionally, how do you find out about it? 00:28:40.700 --> 00:28:43.099 Maybe a small notice is posted, and there's a 00:28:43.099 --> 00:28:45.059 town hall meeting on a Tuesday night that almost 00:28:45.059 --> 00:28:48.180 nobody goes to. And the people who do go are 00:28:48.180 --> 00:28:49.799 usually the ones who are really angry about it. 00:28:50.000 --> 00:28:52.440 It's not a representative sample of the community. 00:28:52.720 --> 00:28:54.920 Right. It's usually just the loudest voices shouting, 00:28:55.059 --> 00:28:58.819 not in my backyard. Exactly. A citizen involvement 00:28:58.819 --> 00:29:02.039 solution might be a digital platform, an app. 00:29:02.460 --> 00:29:04.980 where you can see a full 3D model of the proposed 00:29:04.980 --> 00:29:06.960 building right on your phone. You can spin it 00:29:06.960 --> 00:29:09.039 around, you can see how the shadows will fall 00:29:09.039 --> 00:29:11.140 on your garden at different times of day, you 00:29:11.140 --> 00:29:13.259 can see the projected traffic impact, and you 00:29:13.259 --> 00:29:15.319 can leave structured feedback directly. So it's 00:29:15.319 --> 00:29:17.859 about democratizing the planning process, making 00:29:17.859 --> 00:29:19.900 it more accessible and transparent for everyone, 00:29:20.039 --> 00:29:21.799 not just the people with the time and energy 00:29:21.799 --> 00:29:24.640 to show up to a meeting. Precisely. Instead of 00:29:24.640 --> 00:29:26.900 a flyer on a telephone pole, It's an interactive 00:29:26.900 --> 00:29:29.839 experience. And more recently, they've been looking 00:29:29.839 --> 00:29:32.779 at using prop tech for land assessment, helping 00:29:32.779 --> 00:29:34.980 the government get a much better data driven 00:29:34.980 --> 00:29:37.480 understanding of the built environment so they 00:29:37.480 --> 00:29:38.980 can make smarter decisions about where to build 00:29:38.980 --> 00:29:41.799 schools, hospitals and transit lines. That is 00:29:41.799 --> 00:29:44.799 a crucial point. So much urban planning has been 00:29:44.799 --> 00:29:48.420 done with very old maps and outdated census data. 00:29:48.839 --> 00:29:51.599 Using real -time data could make our cities much 00:29:51.599 --> 00:29:54.200 more responsive to actual needs. It's a huge 00:29:54.200 --> 00:29:56.440 opportunity. Okay, there's one more term in the 00:29:56.440 --> 00:29:58.339 sources that I absolutely have to ask you about. 00:29:58.500 --> 00:30:00.740 Sounds a little ominous, a little dystopian. 00:30:00.799 --> 00:30:04.759 The automated landlord. It does sound a bit like 00:30:04.759 --> 00:30:07.299 a sci -fi villain, doesn't it? This term refers 00:30:07.299 --> 00:30:09.740 to the increasing automation of property management 00:30:09.740 --> 00:30:12.210 functions. We touched on it earlier with the 00:30:12.210 --> 00:30:14.849 maintenance platforms, but the sources specifically 00:30:14.849 --> 00:30:17.890 mention using technology like AI and natural 00:30:17.890 --> 00:30:21.769 language processing or NLP to extract data from 00:30:21.769 --> 00:30:24.670 lengthy and complex rental documents. This is 00:30:24.670 --> 00:30:27.390 the AI that can read and understand a legal contract. 00:30:27.630 --> 00:30:30.240 Right. Think about a large commercial landlord 00:30:30.240 --> 00:30:33.000 like a real estate investment trust. They might 00:30:33.000 --> 00:30:35.039 own hundreds of office buildings and have 10 00:30:35.039 --> 00:30:38.440 ,000 different leases. Each one is a 50 -page 00:30:38.440 --> 00:30:40.900 PDF with slightly different clauses, different 00:30:40.900 --> 00:30:43.000 renewal dates, different rent escalation rules. 00:30:43.339 --> 00:30:45.299 That is a data management nightmare, a human 00:30:45.299 --> 00:30:47.160 trying to keep track of all that would make mistakes. 00:30:47.480 --> 00:30:49.920 It is. And if you miss a critical date, like 00:30:49.920 --> 00:30:52.279 a renewal deadline, it can cost you millions 00:30:52.279 --> 00:30:54.980 of dollars. The automated landlord technology 00:30:54.980 --> 00:30:58.420 uses AI to scan all these documents, extract 00:30:58.420 --> 00:31:01.519 the key data points like rent increases by 3 00:31:01.519 --> 00:31:04.619 % on January 1st of each year, and feeds them 00:31:04.619 --> 00:31:07.240 directly into the management system. It automates 00:31:07.240 --> 00:31:10.000 rent collection, lease renewals, and even compliance 00:31:10.000 --> 00:31:12.640 checks. So you could theoretically rent an apartment, 00:31:12.799 --> 00:31:15.359 live there for years, pay your rent through an 00:31:15.359 --> 00:31:17.900 app, request repairs through a portal, and move 00:31:17.900 --> 00:31:20.059 out without ever interacting with a single human 00:31:20.059 --> 00:31:22.259 being from the management company. Theoretically, 00:31:22.259 --> 00:31:24.730 yes. For the landlord, it's maximum efficiency. 00:31:24.809 --> 00:31:27.410 It reduces headcount and human error for the 00:31:27.410 --> 00:31:30.069 tenant. Well, that's where the big debate lies. 00:31:30.289 --> 00:31:32.369 Does it make things easier and more responsive, 00:31:32.470 --> 00:31:34.470 or does it remove the essential human element 00:31:34.470 --> 00:31:36.769 of empathy and understanding? Right. If you're 00:31:36.769 --> 00:31:38.509 a day late on rent because of a sudden medical 00:31:38.509 --> 00:31:41.450 emergency, an algorithm might not care. It just 00:31:41.450 --> 00:31:43.289 sees a missed payment and automatically sends 00:31:43.289 --> 00:31:46.029 the eviction notice. That's the risk. Efficiency 00:31:46.029 --> 00:31:48.890 is great, but housing is a fundamental human 00:31:48.890 --> 00:31:52.599 need. Finding that balance between cold, hard 00:31:52.599 --> 00:31:55.799 automation and human -centric management is going 00:31:55.799 --> 00:31:58.059 to be one of the biggest challenges as this tech 00:31:58.059 --> 00:32:00.380 becomes more widespread. That's a heavy thought. 00:32:00.460 --> 00:32:02.180 It brings us right back to that central tension 00:32:02.180 --> 00:32:05.200 between efficiency and humanity, which seems 00:32:05.200 --> 00:32:06.819 to be at the heart of all this technological 00:32:06.819 --> 00:32:09.559 change. It is the central question of technology 00:32:09.559 --> 00:32:12.119 in the 21st century applied to the places we 00:32:12.119 --> 00:32:14.640 live. So let's try and wrap this up. We've gone 00:32:14.640 --> 00:32:17.759 on a pretty wild journey here. From Excel spreadsheets 00:32:17.759 --> 00:32:20.599 in the 1980s that just digitized the math all 00:32:20.599 --> 00:32:24.420 the way to AI driven valuations, blockchain land 00:32:24.420 --> 00:32:27.319 registries and smart buildings with sensors that 00:32:27.319 --> 00:32:29.279 know when your boiler is about to break. It's 00:32:29.279 --> 00:32:31.779 been an incredible period of acceleration and 00:32:31.779 --> 00:32:34.200 the common thread through all of it really is 00:32:34.200 --> 00:32:37.240 data. It's about capturing data, analyzing data 00:32:37.240 --> 00:32:39.900 and using that data to make better decisions 00:32:39.900 --> 00:32:42.259 in the built environment. And then using technology 00:32:42.259 --> 00:32:44.619 to remove all that friction that has plagued 00:32:44.619 --> 00:32:46.839 this industry for centuries. It seems like the 00:32:46.839 --> 00:32:48.759 brick and mortar industry is finally becoming 00:32:48.759 --> 00:32:50.799 the click and mortar industry. I see what you 00:32:50.799 --> 00:32:52.579 did there. But yes, that's absolutely right. 00:32:52.660 --> 00:32:54.660 The digital and physical worlds of real estate 00:32:54.660 --> 00:32:57.740 are merging. So what's the final takeaway? What's 00:32:57.740 --> 00:33:00.839 the one big thought the listener should be mulling 00:33:00.839 --> 00:33:04.430 over as they walk past a construction site? browse 00:33:04.430 --> 00:33:06.650 Zillow on their phone tonight? I think the most 00:33:06.650 --> 00:33:09.470 provocative question to leave with is about that 00:33:09.470 --> 00:33:11.029 government involvement we mentioned earlier. 00:33:11.250 --> 00:33:13.849 For the past decade, we've watched PropTech make 00:33:13.849 --> 00:33:16.490 landlords more efficient, real estate agents 00:33:16.490 --> 00:33:19.789 more productive and investors richer. And that's 00:33:19.789 --> 00:33:21.789 fine. That's how capitalism works. It's been 00:33:21.789 --> 00:33:24.309 about optimizing the asset. Exactly. But with 00:33:24.309 --> 00:33:26.210 the developments like the UK's Innovation Fund 00:33:26.210 --> 00:33:28.589 and the citizen involvement apps, the really 00:33:28.589 --> 00:33:31.220 interesting question is. Is the next phase of 00:33:31.220 --> 00:33:34.140 PropTech less about managing buildings for profit 00:33:34.140 --> 00:33:37.079 and more about democratizing how our cities are 00:33:37.079 --> 00:33:40.059 planned and lived in? So are we just optimizing 00:33:40.059 --> 00:33:42.859 the assets for maximum financial return? Or are 00:33:42.859 --> 00:33:45.319 we on the cusp of using this technology to optimize 00:33:45.319 --> 00:33:48.200 our communities for people, for livability, for 00:33:48.200 --> 00:33:50.720 equity, for sustainability? That is the frontier. 00:33:51.259 --> 00:33:54.039 Can this incredible wave of technology actually 00:33:54.039 --> 00:33:57.400 help solve the housing crisis? Can it be used 00:33:57.400 --> 00:34:00.160 to make our cities more equitable and more livable 00:34:00.160 --> 00:34:03.079 for everyone? Or will it just make the rich richer? 00:34:03.579 --> 00:34:06.359 That's what we need to watch next. That is a 00:34:06.359 --> 00:34:08.380 fascinating and incredibly important place to 00:34:08.380 --> 00:34:10.579 leave it. Thank you for walking us through this 00:34:10.579 --> 00:34:12.780 incredible stack of research. My pleasure. It 00:34:12.780 --> 00:34:14.679 was a great conversation. And thank you for listening. 00:34:14.840 --> 00:34:16.980 Keep looking at the buildings around you. There's 00:34:16.980 --> 00:34:19.360 a lot more going on inside them and behind them 00:34:19.360 --> 00:34:22.880 than you might think. We'll see you on the next 00:34:22.880 --> 00:34:23.280 sneak dive.