Company: Honest Buildings
By: William Robertson
As we round out 2014 with a slew of predictions about entrepreneurial innovation in the year to come, there’s one industry that’s virtually always overlooked in these discussions– commercial real estate. Nevertheless, mark my words. This industry is on the brink of disruption. Though one of the oldest industries in the United States, commercial real estate has lagged behind other industries in terms of innovation, particularly when it comes to adopting and advancing technology In fact, it has been argued that the commercial real estate market is in the same place that the financial services industry was 20 years ago. Thus, there’s a huge opportunity for tech innovators to enter the market to transform everything from how a transaction is done to the manner and method that critical information is accessed.
The sheer size of the commercial real estate industry is another reason why commercial real estate is a hotbed of entrepreneurship. Roughly the size of the U.S. stock market (an estimated $15 trillion), the CRE market continues to move through the recovery phase of the economic and real estate cycles, putting it in a strong position to grow as the economy continues to stabilize. But to continue this forward progression, increased investment and innovation in technology is paramount.
Where are the specific areas we should expect to see the greatest change?
1. Better transactions- At the end of the day, commercial real estate is about closing deals—the smoother the process the better. Fortunately there are a host of technology and CRE companies working to provide brokers with tools to make these transactions easier to track, monitor and execute. One major player is CompStak, a real estate data company that has quickly found traction by crowdsourcing commercial lease comp information, data that was not previously published or made publicly available. This open exchange of information has significantly facilitated the often-complicated real estate transactional process. Another example is Tenant Rex, which standardizes lease comp data to provide brokers with market insights and trends to help them improve their leasing negotiations. Companies will eliminate information “arbitrage” ; they will enable choices based on complete interpretation of data rather than an assembly of small anecdotes.
2. Improved process management- When it comes to commercial real estate development, finding the right vendors and keeping the project on track can be real challenges. The antiquated and time-consuming RFP process calls out for an easier, more streamlined solution. That is why companies like Honest Buildings, are generating so much buzz. Honest Buildings increases efficiencies by connecting real estate developers and owners with vetted architects, contractors and other vendors. Rather than rely solely on word of mouth, businesses can now choose based on past performance, availability, broad reviews, and of course price. More options and better insight will pave the way to better decisions.