While the commercial real estate industry has not exactly welcomed new technology in the past, that is rapidly changing with the emergence of new tools and apps that are completely changing how CRE transactions are handled. As demand for such products continues to mount, competition in the commercial real estate tech sector has mounted at a rapid rate. Today, more and more professionals have begun to not only appreciate but to even expect the availability of new technology to make their jobs easier. This year alone is expected to be a revolutionary year in terms of the opportunities provided by real estate tech companies, particularly within the commercial real estate sector. During the fourth quarter of last year, venture funding for real estate tech companies neared $300 million, according to a report by TechCrunch.
Among the most successful of those companies is Compass, a site geared toward assisting commercial real estate clients, that managed to bring in $73 million in funding. Today, Compass is valued at $360 million and they are definitely changing the commercial real estate market.
Why the Interest in Commercial Real Estate Tech
Overall, the real estate tech market as a whole presents a tremendous amount of opportunity. Many of the clients tapping into new products arriving on the real estate tech scene do so in an effort to save either money or time. In some instances, new real estate tech products make it possible for brokers and other professionals to do both. Floored is just one example of how technology is making it possible for users to take advantage of cost savings and increased efficiency.
Specialized products are also increasingly finding homes in various sectors of the commercial real estate industry. While many of the new real estate tech products released tend to target the industry in a broad sense, others are designed to cater to niche audiences. Among the startups to receive venture funding recently include Storefront, a popup retail space rental service, and Breather, which focuses on private workspace.
Regardless of whether the product is designed to appeal to a specialized or a broad audience, competition among real estate tech firms is definitely on the rise. Given the tremendous value of the market as a whole, it is easy to see why developers are so anxious to tap into this enormous market. The United States now ranks as the world's largest real estate investment market, according to a report issued by Cushman & Wakefield.
The Benefits of New CRE Tech Tools
In response to size of the market and the growing competition, an increasing number of new startups have popped up. With the ability to sort, analyze, and disseminate data in real time, many of these startups are making it possible for CRE professionals to make far better informed business decisions, thus driving improved profit margins and ROI.
Over the course of the last few years alone, there have been dozens of new real estate tech startups launched. While not all of those startups are now notable players in the industry, the rate of innovation has proven to be tremendous.