What’s next in proptech? Scott Sidman, EVP, Business & Corporate Development at Building Engines, joined attendees at CREtech NY on the Ask Me Anything stage to discuss that and more.
At Building Engines, Scott drives strategic growth through partnerships, mergers, and acquisitions and their successful integration. He collaborates with all departments and customers on opportunities for market expansion while enhancing product value.
During the 30-minute session at CREtech NY, Scott covered:
- Key lessons learned across economic cycles and how to apply those lessons today
- The evolution and future of proptech
- Why proptech is essential in today’s hybrid era of work
Note: Answers have been edited for length and clarity.
Q: How will the economic climate today affect proptech?
Scott Sidman: That’s obviously an important question for many here today. When I joined the company and we started talking to real estate managers about using the internet to communicate with their clients and tenants, we were practically thrown out of offices. We were told, “That’s not the way we do business. Our customers pick up the phone. This is a relationship business. Technology will never replace that.” That was a common occurrence in the first few years of our existence. We had to fight through that.
I view that as a cycle, the early days of proptech. From there, we hit our stride as the market began to recognize the value of technology and we hit a growth period.
The other thing we ran into in the early days was that we’re an operating solution. We help our customers operate more efficiently. In the early 2000s, everything in real estate was about the deal. We would talk to customers, and they would say things like, “I’m buying this building. We’re going to do some lobby renovations. We’re going to flip it in a year, make a great return on investment, and we really don’t care about operational technology.”
Then, we hit the recession in 2007. 2007-2010 was actually one of our biggest growth periods. What happened was that our customers realized, “We have to operate now. And we have to run these buildings efficiently. And we need technology to do it.” It turned out to be a great opportunity for us.
There were periods where things got lean. You must manage carefully in those periods, but what we have found in every cycle we’ve been through is that opportunity came through in some way. You just have to keep your eyes open.
Q: When you think about the next 10-15 years for proptech, what do you see as the next phase?
SS: Maybe it’s what I see happening now that’s particularly interesting. If you look around this event [CREtech NY], there’s a tremendous number of proptech solutions. It’s great for the industry, but it’s challenging for the customer and it’s challenging for the market. We’re seeing an era of consolidation and convergence over the next few years. We’re an example of consolidation. We were acquired by a traditional real estate company that is transitioning their business and we’re a foundational core of that. I think you’ll see more of this happening. There’s already a tremendous amount of co-mingling of interests between real estate organizations and providers. That will accelerate.
We’re now starting to see convergence of solutions. One of the examples that stands out is tenant experience and workplace experience coming together. It makes a lot of sense. There’s so much overlap in what we all do, from a customer perspective. And that’s the lens I typically think of first. What does it mean for the end user? They need to understand what we do, how it helps them, what the value is. That’s an area where, if you look at these platforms and solutions, they do the same thing but maybe they’re just in different areas of the business. Why don’t they work together?
The other piece of that, then, is the landlord’s interest in technology as it extends into the tenant space – particularly in this environment. We’re going to see landlords taking on more responsibility for the tenant. Not just in the core building itself, but also in the tenant suite as partners with their occupants in terms of how they leverage their technology and how they use data.
Q: How is Building Engines approaching hybrid work?
SS: We have been fairly non-directive with our employees about coming into the office. Like everyone else, as we worked our way through the pandemic, we had ideas and plans in place that got blown up. Another variant popped up when we thought we were going back to the office, and that plan went away. We’re also very aware of the economic environment and the importance of talent. We’re sensitive to putting policies in place that may have an impact on our ability to attract and retain talent given the current economic cycle.
We’re mindful that anything we put in place must have the interests of our employees first – health, safety, wellness, comfort. All that said, my opinion is that organizationally we are not quite as efficient in a virtual world. Although I love working from home, ultimately it would be better if our people could come back to the office more frequently than we are today, but I don’t believe it will ever be the same.
We’re starting to see people come back where teams are self-directed in recognizing they are better performing when they’re in the office. And it’s starting in the obvious places – sales, business development groups, particularly young people. It’s hard hiring a young business development group and training them remotely. They learn best when they’re together in a room, listening to each other on the phone, debriefing after calls. Our sales team made their own decision to come back to the office and work together three days a week. It’s worked well because it was their call, and we’re seeing the results of that.
In terms of the technology, one of the things that’s really important is landlords need to help their tenants understand how space is being utilized and using that data to help them get ahead of lease renewal decisions, space utilization decisions, reconfiguration. That’s one of the things we’re going to face, too. We’re an open floor, like a trading floor – so one big space. We’re all side by side at desks, all sitting next to each other. I don’t think anyone wants to come back to that. So, it’ll be working with landlords to figure out how we’re going to reconfigure the space.
Looking Ahead to What’s Next in Proptech
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