The CRE Tech is Changing the World as we know it
Technology is changing the ways we experience different industries. Out of all the industries that revolutionized through tech, CRE (Commercial Real Estate) is probably the last one. In 2019, real estate tech investments rocketed sky-high. If 2019 was great, 2020 was supposed to be even better, well, prior to the pandemic. However, experts suggest that now that CRE has begun integrating with tech, it is unlikely the process will reverse. Since startups are now trying to digitize the CRE industry, the CRE technology market is exploding.
The recent expansion of CRE tech industry
CRE tech has expanded the industry exemplarily. Experts say CRE tech will soon be worth more than a hundred billion dollars. CRE tech has given rise to interconnected hardware and software systems in residential and commercial buildings. It has changed the focus of the companies to digitize every aspect of their business. Virtual tours of buildings and construction sites and cloud-based software solutions that control HVAC systems are possible due to CRE technology.
Some of the other ways CRE tech has changed the real estate industry include providing convenient property management solutions, efficient and secure visitor management systems, co-working spaces, and even 3D printing.
CRE tech has already affected many aspects of the industry. Many online solutions are already providing CRE companies the easy way to streamline their buying and selling processes. Physical and cyber securities are major issues faced by CRE. Security and surveillance systems help monitor buildings and cyber assets. In the area of data management, Excel was used by most of the real estate private equities for deal flow management purposes. However, after the evolution of CRE tech, we have many online solutions available.
The participation of investment firms
Due to impressive advancements in this field, one can realize that there are countless opportunities for the future. This has paved the way for financial firms to invest in the CRE tech industry. In 2012, investments in CRE tech startups in the US were $30 million. This has now risen up to $7 billion.
Additionally, the ecosystem today comprises of around 3,000 to 4,000 startups. On the other hand, there used to be only a few dozen tech startups in 2012.
Since most of these startups are new and have limited resources, they require funding. This is why recent CRE and tech integration is led by investment firms. Investors are testing programs and software in relevant markets. Venture capital and private equity scout for innovative CRE tech companies to invest in and grow them.
CRE tech and investment firms need each other now more than ever. It is now the need of time for both. If CRE tech startups lack resources and require investment, then firms need to invest in the tech industry too. An investment firm cannot survive for long without investing in the tech industry in corporate America.
Investing in CREtech benefits the investment firm in the long run because CREtech develops software that helps the firms. For instance, private equity deals benefit from deal flow management software. These software help firms organize and collaborate on deal flow.
Source: Venture capital software.