Real estate, which arguably originated in the Roman period with the Roman law of property and possession, seemingly has few avenues for substantive change. Intuitively, this makes sense — after a couple of millennia, there are traditional real estate methodologies that rule the industry. However, despite the sparse change and innovation, recent developments and investments in technology have been made to modernize this field. Though real estate is rich in tradition and slow to change, there are potentially even richer opportunities for those who embrace real estate technology trends.
The Emergence of Proptech Companies
A newer generation is driving digital transformation in commercial real estate, and investors have taken notice. In 2021, venture capital firms poured $32 billion into future commercial real estate tech disruptors. Perhaps even more impressive, given economic uncertainty, inflation, and tech job layoffs, investors injected almost $20 billion into proptech companies in 2022. Talented developers work in proptech, and investors are willing to bet on their success.
Nearly every department has sophisticated tools, such as sales teams with CRMs. Most commercial real estate departments, conversely, still rely on Excel spreadsheets and manual inputs. Proptech companies are working to improve that functionality to upgrade the day-to-day operations of real estate organizations and provide solutions.
What Is the Value of Real Estate Automation and Software?
The status quo is safe and comfortable. With economic headwinds looming, it’s natural for business leaders to ask, “Is this the right time to adopt real estate technology trends?” They’re wise to exercise caution, but the answer is a resounding yes.
Commercial lease management software gives tenants a competitive edge to succeed in a challenging environment. With their lease portfolio data at their fingertips, tenants can be far more strategic about their real estate decisions. Here’s how:
1. Improved landlord negotiations.
Having a single source of truth that everyone is working from is crucial in today’s environment. While a few key people might be putting pen to paper and executing lease or sale documents, the truth is that transaction management is a long and nuanced process between the landlord, the tenant, and their respective representatives, involving many parties (such as brokers, attorneys, and auditors).
There’s an overwhelming amount of data to manage for landlords, including information on site selection, zoning, utilities, foot and vehicle traffic, taxes, build-out negotiations, and title commitments.
A single platform to manage these items and provide both reliability and continuity of information is critical in an environment where entering into a poor, binding investment or missing an opportunity for a site with better potential can cause serious economic pain.
A system that stores, manages, processes, and provides the same data to everyone goes a long way in ensuring that critical processes and dates are not missed.
2. Streamline administrative tasks.
Lease automation streamlines administrative tasks and saves time and costs, leading to more productive use of your employees’ time. Employees are constantly dealing with competing demands for their time and attention. If you can remove stressors, such as varied spreadsheets, PDFs, and Outlook notifications, and put them into one platform, then you can dramatically reduce decision fatigue. In addition, automation software saves time lost from context switching and task mismanagement.
The potential savings in this area are significant. Today, the risks of not adopting automation in the workplace are overtaking the risks of implementing new technology. With an estimated $1 trillion lost each year in task mismanagement, there are tremendous upsides in investing in technology that eliminates key entry errors and standardizes tasks, such as giving employees more time for creativity and strategy.
3. Sophisticated financial reporting.
Lease automation provides powerful data analysis that can relay down-date information about your portfolio. You can proactively assess your rent obligations by having a stronger understanding of fixed and various lease costs. Eliminating tedious data manipulation gives you more time to analyze and plan for critical opportunities. If you find that certain types of buildings or areas no longer serve your business, for example, it might make sense to avoid expanding there.
Conversely, if several of your stores perform well next to complementary businesses — for example, a gym next to a juice chain — then the team can proactively look for those opportunities in their acquisition searches and have compelling cases to make to lenders and other stakeholders. Automating data removes the guesswork and allows you and your team to apply your talents in a focused and precise manner.
Real estate is slow to change, and caution has served many real estate veterans well. However, there is the question of whether it has become riskier to maintain the status quo or to explore and implement modern solutions. Despite being more comfortable, savvy real estate professionals should realize it’s time to ditch tools like the scrolls and quills the Romans used and invest in automation software.
Featured Image Credit: Provided by the Author; Photo by John Schnobrich; Unsplash; Thank you!
Fintech Kennek raises $12.5M seed round to digitize lending
London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.
According to an Oct. 10 tech.eu report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.
The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:
“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”
The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:
“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”
The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.
The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.
Featured Image Credit: Photo from Kennek.io; Thank you!
Fortune 500’s race for generative AI breakthroughs
As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.
Goldman Sachs’ Cautious Approach to Implementing Generative AI
In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.
According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.
One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.
To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.
Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.
Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!
UK seizes web3 opportunity simplifying crypto regulations
As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.
Streamlining Cryptocurrency Regulations for Innovation
To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.
The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.
Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.
The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.
Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!