By Mihir Shah, co-CEO of JLL Spark

While technology has transformed many traditional industries across the business world, the commercialreal estate industry hasn’t been as quick to evolve. That’s changing. Investments in real estate technology companies grew 25% in 2017 to $3.4 billion. As the CO-CEO of JLL Spark (a division of JLL (NYSE: JLL) that launched a $100 million JLL Spark Global Venture Fund in June 2018), we’ve seen the industry change rapidly in the past year. These are the top industry trends we can expect to see more of in 2019:

Proptech adoption will continue to accelerate. We’ve seen a dramatic acceleration in investors’ and property owners’ appetites to try new technology to see what impact it can have on their businesses. Now, instead of doing a two-year review cycle on a technology, you’ll see more companies piloting different technologies to see how well they perform. If they demonstrate ROI, they will implement them more widely.

The DNA of real estate tech is changing. In the past, Proptech startups were often started by real estate professionals who saw pain points in the industry that could be addressed by technology. Now, we are starting to see seasoned tech entrepreneurs building companies focused on the commercial real estate industry because they see the enormous market opportunity. In 2019, we will continue to see an influx of high-level technology talent entering the Proptech world that will help to accelerate the pace of innovation.

AI and machine learning applied to the vast amount of real estate data will begin to show value. A huge amount of data is generated from the transactional and operating data for a building. Harnessing the power of AI and machine learning, property owners will run their buildings more efficiently and make better investment decisions.

Tenant experience applications will grow in popularity. The industry will see gains in adoptions of mobile applications that enhance the experience of those who work in commercial office buildings by enabling everything from easy building access to connections to a variety of local services.

The catalyst for these shifts is a change in how incumbents approach adopting technology and the value that that new technology products are starting to demonstrate across multiple segments of the industry.

 

Mihir Shah is co-CEO of JLL Spark, JLL’s global division dedicated to transforming the real estate industry through technology-based innovation. At JLL Spark, he invests in and advises Proptech companies, helping them bring their innovative products to real estate owners and operators. Prior to JLL Spark, Mihir built and lead teams focused on bringing several successful technology-based products to market. He did this as the Co-Founder and CEO of Mob.ly, as an early employee at several startups, as a product leader at Yahoo!, and as a senior executive at Groupon. He has also been an angel investor and advisor to a number of startups such as Uber and Boom Supersonic.