Does the Future of Commercial Real Estate Brokerage Look Like Residential Brokerage?
The commercial real estate tech sector is laggard when it comes to innovation in tech. No disrespect. It just is. Not a bad thing or a good thing.
Makes sense too. Residential is consumer-focused, meaning its customers are very mobile and social media-friendly.
Also, residential saw the first true online open-sourced MLS with the creation of Zillow. In addition, large-scale companies like Compass and Redfin have been created based on a tech-first model. Sites like Open Door and Pillow are building very scalable and real businesses.
On the commercial side, we are just getting started. Clear momentum in the space. And big-name investors are coming into the sector seemingly on a daily basis.
On the brokerage side, as I have written about extensively, every one of the top five firms has either aligned with an Accelerator, VC, or direct investments.
I do think the next 12-24 months are going to be dominated by the brokerages and their tech investing. From the ones I talk to, real money is being invested and real progress is being made. But will they go as far as their counterparts on the residential side?
For a glimpse of what is happening on the residential brokerage side, check out this recent blog from KW: https://blog.kw.com/vision-speech-2018
And this wonderful take down of their strategy as well: https://www.inman.com/2018/02/28/what-the-hell-is-keller-williams-doing-lingering-questions-from-the-vision-speech/
While I get that it’s easy to take shots at KW, I also know they ARE trying to position themselves in this incredibly dynamic, fluid, and ever-changing tech-eats-the-world climate. And so I tip my hat to them for putting themselves out there and trying to get ahead of the narrative.
Putting on my old PR hat for a moment, it’s a great PR strategy, for sure. Whether there is actually substance behind the sizzle, I will leave it to others who follow the space more closely than I do.
But one line from their CEO absolutely stopped me in my tracks: “If you control your database, transactions, and proprietary knowledge and insights, you can decide how relevant you'll be. Real estate agents are NOT going away.”
That to me is the most important thing I might have ever read coming from the residential tech side. It’s what I have been fascinated with, and totally confused about in the commercial sector forever.
Why the hell do the brokerage firms give away their OWN data to third parties and then turn around and pay to access it? This has always been the craziest thing I ever saw in this space.
So to me, that’s what I am waiting to hear on the commercial side. One of the big firms finally say, “we own and control our own data and THAT is our secret sauce!”
Using technology therefore, to finally take back what is rightfully theirs and to build an ecosystem around THAT data…aggregating it, interpreting it, using it for lead gen, and then using it to build AI-infused solutions to complex client requirements…that, to me is where tech will finally emerge as the great differentiator in CRE tech.