Tech companies who want to venture into the real estate industry are facing the tough challenge of bringing about change without totally disrupting the "institution."
Rubicon Venture Capital hosted an event last week for startup companies who want to infiltrate New York real estate industry using technology. According to The Wall Street Journal, the event shed a light on two realities of the impending disruption of tech companies on real estate. First, technology has overtaken one of the most guarded segments of the business world. Money is pouring into these startup companies and it is expected that for this year alone, they will be able to raise $1.4 billion in investments. This data comes from CB Insights and was presented in the event. The amount is a big jump from $1 billion raised last year and the $438 million in 2013.
In the same report, many of those investing in real estate technology are coming from the New York area. Reonomy chief executive Richard Sarkis, who was one of the event's invited panelists, said, "It's pretty easy to get a meeting if you are disrupting something in real estate."
The second reality presented is the fact that this rising tide of technology disruption in real estate is also going to push out traditional means of buying and selling real estate. And according to Davide Eisenberg CEO of Floored, the transition will not be a pretty one. "It's going to be a bloodbath," he said.
Meanwhile, in a post by Urban Land, it was mentioned that the days of isolation of the real estate industry from the rapid technological advancements of society are numbered. Urban Land Institute CEO Patrick L. Phillips said that the industry must adapt its business model to the needs of the current crop of tenants who are far more different from those in the past.
