^{Investing in the next generation of} Real Estate Technology

While the COVID-19 pandemic gave the commercial real estate industry some challenges, it also served as a catalyst for innovation, forcing property developers, owners, and operators alike to reevaluate decades-old real estate models. Initially, the real estate industry was slow to adopt technology. But the prevalence of working from home changed resident activity, as well as the way in which property management and residents interact. Because of that, real estate technology has become essential in meeting renter needs.

This was one of the topics of discussion at RETCON — a proptech-focused event in New York City — this spring. During a Fireside Chat led by RET Ventures Partner John Helm, LCOR Chief Operating Officer Mike Hogentogler talked about his career journey in multifamily operations and management and how LCOR approaches the selection and implementation of proptech solutions across its 12,000-unit multifamily portfolio.

LCOR was ahead of the curve at proptech adoption. While many real estate companies are just now learning how to integrate technology into their properties, testing the water with a few technologies, Mike talked about the twelve distinct tech solutions LCOR has rolled out across various properties in the past four years. Embracing the shift away from single-stack solutions, LCOR has focused on adopting technologies that play a role in accelerating and easing the renter’s overall experience, as well as those of property management teams. While this shift is universal, Mike noted that it has even greater benefits for small-to-midsize property owners and operators who cannot support dedicated workstreams for all operational activities; integration of technology has been crucial in streamlining operations and ensuring renter satisfaction.

The market is seeing an abundance of proptech solutions being developed, and two of the criteria LCOR uses when deciding which technologies to deploy may not be intuitive: one, the tech company’s leadership, and, two, its financial stability. By considering both of these factors, LCOR has been successful at implementing tech solutions that will deliver tangible benefits for their operations team for years to come.

Mike also talked about the importance of purposeful implementation, including focusing on technologies that integrate with other proptech solutions and being intentional about which properties pilot these technologies. Also critical when rolling out any technology is effective change management to ensure that companies are driving the best possible results that maximize the technology’s impact.

As innovation continues,​​ integrating effective technologies will be crucial not only for operational efficiency but also for meeting the ever-changing expectations of residents. As John noted, RET Ventures has played a major role in moving multifamily technology forward, helping to ensure that future technologies are well-capitalized and perform in a way that is most impactful for the industry. Through its partnership with a large cohort of multifamily operators, RET helps LCOR and others make technology investments that align with their strategic goals and enhance resident experience.

As Mike noted toward the end of the session, the power of technology in multifamily real estate is transformative. By embracing innovation, collaborating with forward-thinking partners, and prioritizing tenant experience, LCOR has set a precedent for implementing innovations that drive operational excellence and future-proof the industry.

Centralization is transforming real estate, and for good reason – owners and operators find that centralization improves the quality of property operations, lowers costs, and boosts productivity.

What is Centralization

Traditionally, most property operations occurred onsite. As tech has matured, a growing amount of activity can be centralized in an off-site location.

• For front-end operations, centralization streamlines and manages prospect screening and communication, property marketing and ongoing resident engagement.
• On the back end, owners gather, store, and analyze portfolio-wide data behind one pane of glass – producing more accurate reporting, driving better decision-making, and simplifying compliance.

What’s Behind Centralization

Economic challenges and a labor shortage have real estate owners looking internally for value creation. Centralization can play a crucial role.

• Centralized systems are inherently scalable, enabling owners to onboard new acquisitions more easily.
• Moving screening, collections, and renewals offsite to specialized teams allows onsite staff to focus on resident experience and retention.
• Centralized roles allow operators to provide a uniform, repeatable approach to things like screening.
• Consolidating resident communication channels enables more prompt responses to inquiries and more effective conflict resolution.
• Centralized platforms offer robust reporting and data analytics, providing actionable insights on resident sentiment and asset performance across a portfolio.
• Streamlining administrative work allows owners to optimize onsite resources and/or reduce overhead costs.
• Centralized management promotes a more consistent resident experience. It creates true relationships with renters, prompting them — when they move — to favor apartments within the operator’s portfolio.
• Centralization creates clearer career progression pathways and more stable work environments for onsite staff, enhancing employee retention.

There’s no technology trend getting as much attention as generative AI, so let's take some time to preview how it will impact real estate this year.

AI is a trend you cannot ignore
Every real estate professional should be thinking about how ChatGPT — which boasts nearly 200 million users — and similar tools will change the way they work.

• But remember: The technology’s glitz is only as good as the substance that underpins it.

Data is the key to quality
ChatGPT is built on a massive trove of publicly available information; ChatGPT would be nowhere if not for the data it was built on.

• So what? Real estate-focused AI tools will also only be as good as their underlying data.
• It’s still early for RE-focused generative AI and there are just a few RE-focused generative AI companies built on large reams of real estate data.

The winners may have already been chosen
Impactful generative AI companies for real estate aren’t likely to be built by technologists moving into the industry. Instead, existing real estate tech companies with massive amounts of data will be playing the biggest role.

Here is what our portfolio companies are doing, leveraging their data collections and generative AI to provide value to clients.

• • Travtus reviews and analyzes troves of information (emails, service requests) to understand a property. Its digital employee — "Adam" — then uses that information to address resident concerns, train employees and reduce costs.
  • Markerr launched its generative AI dashboard for market analysis in the summer to help real estate professionals identify emerging market opportunities, predict future growth, and assess risk factors with precision.

• Lula, a smart property y maintenance platform, uses generative AI to converse with the system and residents regarding maintenance requests.
• Picket, a tech-enabled property management platform is leveraging generative AI to simplify massive HOA CC&Rs into structured resident rules; and automating the responsive capabilities of the system for resident questions.

We also have other portfolio companies using AI in similar ways, using large troves of proprietary data to develop powerful insights.

• Funnel Leasing, a multifamily CRM and automation platform, is leveraging generative AI to transcribe and summarize prospect and resident calls, saving leasing teams valuable time.
  • It’s also using AI to engage, answer, and convert prospects via email, SMS, chatbot, and voice in a quick and human-like manner.
• OnsiteIQ, a construction intelligence platform, analyzes visual data from under-construction projects and leverages AI to track progress across 18 major milestones, identifying patterns of inactivity and predicting potential delays across an entire portfolio.
• PassiveLogic, the first platform for generalized building autonomy, is creating an ecosystem of solutions that enables anyone to design, deploy, operate, and maintain their own autonomous building systems.
• PredictAP, is a machine-learning invoice ingestion and coding product for real estate accounts payable (AP). The tech ingests a historical record of a company’s AP coding data to build an automated, self-learning ingestion and coding protocol that can flag instances of fraud and identify spending inefficiencies across the business.