Four Key Learnings from the 2018 NYC Real Estate Expo
Last week, the NYC Real Estate hosted its 10th annual Real Estate Expo at the New York Hilton Midtown. The event brought together thousands of real estate professionals for a day of panel discussions and one-on-one interviews with industry experts on some important topics in real estate. Attendees were also given the opportunity to network with industry peers, and explore the functionality of CRE technologies in action through informal demo sessions.
The room was particularly packed for the panel on ‘Why Blockchain and AI for Commercial Real Estate?’, moderated by Dan Conroy, R&D Engineer for Technology and CRT Lab of the National Realtors Association (NAR). I was thrilled to be invited as a panelist to join some of the brightest tech experts in real estate for a discussion on the current state and future of artificial intelligence (AI) and blockchain for commercial real estate.
The other speakers on the panel were:
Stephen King, Founder & CEO of REX: Stephen is the go-to man for all things blockchain for real estate.
Howard Rubin, Senior Partner at Goetz Fitzpatrick LLP: Howard gives that senior, law firm viewpoint of blockchain and I have to admit, I agree with more than one of his contrarian views.
Ben Polen, Founder of Allodeum: Ben is here to change the way we access Title and Title Insurance through blockchain, but who thinks Title insurance isn’t going away anytime soon!
Perrin A. Quarshie, Founder & CEO of RealBlocks: This MIT superstar is one of the first to tokenize real estate and eventually, have it trade like equities on the stock market.
Kevin Shtofman, Technology Strategist at Deloitte: Kevin has a depth of real world experience in Deloitte’s blockchain and real estate practice and can tell you what companies are and aren’t willing to explore with technology
Kate Fomina, Vice President of Propy: Kate brings a broker’s lens to blockchain and believes the technology will change businesses dramatically
I have listed below the following points as the top takeaways from the session:
1. Blockchain and AI are here to stay
All on the panel spoke about the fact that while the technologies were still under development, there are many examples of them in use today. Consulting firms, like Deloitte, are building out teams of hundreds of people to adopt these technologies on behalf of their clients. While certainly not everyone agreed on how far blockchain and AI would proliferate and at what velocity, there was certainly a consensus that the RE industry is ready to open its ears (and perhaps even its pockets).
Our moderator, Dan, asked me about the prevalence of the use of AI in real estate today. My answer was that its widespread use in commercial real estate will not be as soon or as scary as you think. AI is still in its nascent stages, so it’s not solving all of your problems yet, but it’s not all mighty either, in that it’s not a job killer. One thing is true: the AI train in the real estate industry has left the station. Our clients at LEVERTON are using deep learning, a form of AI which learns based on experiential learning and constantly gets smarter, every day. Through the LEVERTON platform, customers can harness thousands of pieces of data that are sitting unstructured in their corporate and legal documentation and build valuable insights, analytics, and correlations that perhaps they haven’t even dreamed of yet.
2. What’s the key difference between blockchain and AI?
Kevin Shtofman of Deloitte provided definitions of these hot technologies in a clear and simple way: “blockchain helps you to centrally store unstructured data” and AI “helps to analyze that data without a tremendous amount of manpower”, which of course can lead to insights, and ultimately, smarter decisions.
AI can also be applied to many areas of commercial real estate, to how buildings are viewed and managed or how brokers and tenants can better use data to better manage a portfolio of properties. To find out more about the latter point, my recent interview with CRE Tech may be helpful.
3. Do these emerging technologies spell trouble
for those who work in real estate?
Those on the panel who spoke to this point seemed to agree like with any change, there will be consequences for many careers in the industry. I often tell a story about how state governments are no longer hiring toll booth operators, and they probably never will. This is a fundamental change to the industry and there is no going backwards. However, there will still be a need for professionals in the industry such as brokers, lawyers, lenders, etc. – but their role will dramatically shift from transaction managers to strategic advisors who analyse the blockchain and AI driven data to give customers valuable insights – at least for the short to mid-term.
Blockchain will also make new types of transactions easier. Perrin A. Quarshie of RealBlocks talked about how their block chain technology would be able to open the industry to new lenders, who can lend across a wider set of geographies and assets than what is possible today. Speed will also enter the picture since centralised data via the blockchain will expedite how mortgage lending is accomplished.
4. How do you get started with these technologies?
What do you do first and what do you need?
Schtofman talked about blockchain still having a long way to go, and that their clients are moving in a thoughtful way, “from proof of concept” and then to “proof of value.” With AI, what we suggest at LEVERTON is to start first with the problem you are trying to solve. Make sure you have a practical use case that can demonstrate impact in relatively short order. Teams should also consider having a “data scientist” on board, so that when you tune up insights form unstructured data you are sure there’s someone to analyze them and turn them into meaningful insights that are actionable.
Is it hard to imagine a universe in which all real estate transactions and ownership are completely democratized via the blockchain, where one no longer owns a building or a set of properties, but owns tiny pieces of them, just as we do with stocks in the stock market? These pieces will trade via AI driven algorithmic funds, and the transactions will be settled in seconds – no more escrows, no more Title insurance, no more due diligence. Properties themselves could become transmutable with no permanent workplaces, IoT connected devices where buildings cater to your needs as soon as you enter them arranging for the look, feel, amenities, and temperature that you wish for out of your work, home, or retail experience. Is it a dream, or is it just a few start-ups away from becoming a reality?