2023 Spring Issue - 71

For prospective renters, a building equipped
with smart home automation technology from
Scottsdale, Arizona-based technology firm
SmartRent may enable them to schedule a tour
online, verify their identity, and then unlock the
unit's Bluetooth-enabled smart lock to allow them to
take a look around without needing a rental agent to
be present. And once they move in, the company's
technology platform can enable the residents to
control their lights and thermostat remotely or let
an Uber Eats employee enter through the building's
front door to deliver a meal, all through a simple-touse
app.
" It adds a level of convenience that residents
love, " says SmartRent founder and chief executive
Lucas Haldeman, who notes that the company's
smart home platform provides benefits for building
owners as well. Tenants may be willing to pay $35 or
$40 more per month in rent for a smart apartment,
for example, once they learn that they might save
even more money on their air-conditioning costs
through the ability to adjust their smart thermostat
remotely. Beyond that, SmartRent's platform enables
managers to monitor and control the property more
efficiently through a website or mobile app that
allows them to check the status of work orders for
repairs or verify that cars in the parking lot belong to
authorized users.
SmartRent is one of numerous companies aiming
to transform the multifamily residential segment
of commercial real estate through use of property
technology, or proptech, a catch-all term that encompasses
a variety of software and technology platforms
that provide greater efficiency and new capabilities,
all designed to improve how buildings are bought,
sold, operated, and managed.
Industry observers say proptech is just starting to
make inroads in the multifamily segment, where it
could have transformational impact. Already, some
apartment building owners are using cloud-based
systems to manage their buildings' energy use and
maintenance needs through their phones, as well
as analytic platforms that gather vast amounts of
financial data from properties in their portfolios to
aid in strategic decision-making. Also being used
are websites and mobile apps that enable renters to
sign leases, pay their rent, or communicate with their
landlords with a few taps on a keyboard or screen.
On the cutting edge, proptech pioneers also are looking
to fundamentally alter the relationship between
owners and tenants by delivering new types of services
and customer perks.
Phases of Proptech Evolution
In recent years, venture capital firms have been
pumping money into proptech, and even though
investment dropped by 38 percent in the tumultuous
economic climate of 2022, they still invested $19.8
billion in proptech startups, according to a recent
report by the Center for Real Estate Technology &
Innovation. It is unclear how much of that amount
is being used to fund multifamily residential innovations.
But Jeremy Kaner, a general partner at Olive
Tree Ventures, an early-stage venture capital firm
and arm of real estate investment firm Olive Tree
Holdings, sees proptech for apartment buildings as
having an impact comparable to the disruption of
the banking and financial services sector by financial
technology.
" Over 60 percent of global net worth is stored in
real estate, not banks, " Kaner notes. " You have massive
payments-$500 billion in annual rent payments
in 2021 just in the U.S. " The difference, he says, is
that " one sector has been revolutionized by technology
and went from banking in a branch to mobile
banking on your phone. " Multifamily residential, in
comparison, is still in what he sees as the game's
early innings.
Third Wave
Even so, multifamily residential proptech already has
gone through several evolutionary stages, says Jeff
Adler, vice president of Yardi Matrix, a commercial
real estate market intelligence company and part of
software company Yardi Systems.
The first wave included what Adler describes
as business-to-business applications that automate
back-office operations and improve efficiency
while reducing staffing costs. Next came a wave of
business-to-consumer applications to improve the
renter experience, including websites and mobile
apps that enabled basic functions-from filling out
a lease application to paying rent or making maintenance
requests-to be carried out online through
websites and mobile apps.
" Business-to-consumer proptech got a huge lift
due to COVID-19, " Adler says. " You were forced to
go online because you couldn't rely on an in-person
interaction. " In addition, he notes, a new generation
of younger renters, who grew up with smartphones
SPRING 2023
URBAN LAND
71
2023 Spring Issue

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