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we're here to talk about technology and the commercial real estate uh process today and um I'm Nate Levin I used to run Venture Investments for first American which is second largest Title Insurance Company in the United States uh our group Parker 89 had a bunch of investments in proptech and then I also worked with a lot of the incumbents in the space which is great for this panel because we're we're joined by a mix of incumbents from bigger real estate firms as well as a Destructor in the space or a newer entrant um so I'll let each of them just quickly introduce we'll just do uh name and Company for now and then uh we can jump into the next question later um I'm Carrie Dunning Jackson I'm director of innovation at Jamestown LP I'm up next Mike stroka I'm the CEO and co-founder of dealpath hi I'm Scott Dunphy I'm a fund manager at MetLife investment management I'm Gene Casey I'm the head of proptech and Innovation at nugene real estate so uh in this panel we'll talk a bit about how technology is used in the transaction and managing a portfolio of commercial real estate properties um and to start things off though let's just go down the line and quickly get a sense of what your role is at your company uh what does that actually mean and then why you joined your company sure so I'm at Jamestown um we I'll just very briefly on Jamestown we're a global real estate company um about 13 billion in assets under management and we're known for assets like one Times Square and pond City Market in Atlanta um I had our Innovation team my main job is to Pilot and roll things out in the portfolio and one of them is the work and mother Group which is right there um and it's it's really fun and rewarding um I came to Jamestown from sidewalk Labs I was there for about five and a half years it was Google's Urban Innovation arm and while working there we you know often looked at real estate firms that we really admired and thought about how we could bring some of their Innovation and knowledge into what we were doing and so I always admired and loved jamestown's work um for me I guess I started my career in real estate private Equity at a big distressed fund and kind of unexpectedly got pulled into software development and have now been building Venture back software companies in the Bay Area for almost two decades uh When I Look Backwards I guess now building software for real estate investing makes a lot of sense uh but that wasn't really a planned progression it really happens just through chasing opportunity um and I guess that's what really brought us to starting deal path is that we saw a big underserved market with the institutional buy side that didn't have purpose-built tools and a lot of inefficiency in the work that was being done and what credit former colleagues and friends that were really persistent in describing their challenges that really kind of Drew us to to building this business we've been at it for nine and a half years now and very excited to continue compounding growth the opportunities just to get bigger and more clear we look forward to the discussion today thank you uh so I joined MetLife about 10 years ago when they were launching their Investment Management business and if you fast forward to today MetLife Investment Management has about a hundred billion dollars of commercial real estate Investments about 40 of that 40 billion of that is real estate Equity uh so as a fund manager I'm responsible for developing and implementing the fund strategy but then I'm also heavily involved in our data technology and AI initiatives that help scale our portfolio and operate efficiently I joined giving real estate about two years ago to launch The proptech Innovation team and we have a two-part mandate so on one hand we are making direct Venture Capital investments in early and mid-stage proptech startups and then on the other side of our mandate is connecting the the best teams and Technologies and companies we're seeing build building new things to the right places within our organization it means really large we manage about 150 billion across the world across every major real estate sector and I joined actually from a career and Venture Capital to really learn about the real estate industry from the inside looking out instead of just events Venture lens kind of the outside looking in and there's been a lot of learning the last two years yes lots lots of volatility um so I guess to get started let's Baseline kind of where we are today in Tech adoption commercial real estate both from um you know one sense a transaction perspective in the other sense portfolio management perspective uh maybe Carrie you can start us out on that yeah um so I would say I know the the whole point of view is the real estate's behind but you go to conferences like this and there's a ton of people and a ton of amazing stuff going on and Innovation from you know AI to foot traffic data to sustainability so I find it to be incredibly exciting interesting space and even with the economic headwinds the gene just remarked on um they're you know with constraints you've got creativity and there's a lot you can do um whether it's Opex savings or again using data to drive decisions um that is still exciting and there's a ton ton you can run with where where have you seen Tech effectively adopted today in commercial real estate so many different areas um I mean if it's measurable for our ESG work um uh companies like Placer or marker that we use for foot traffic and consumer data um Access Control parking I mean I could go on um our head of property management sent me a video this morning of um a company in Atlanta that uses drones to clean facades of buildings I mean I think it's everywhere and it's not just software it's Hardware too makes sense um might like on the transaction side of things what where have you seen kind of the biggest leaps up to this point and are we in a good place today or is there more work to be done you know I think we're still very much getting started and you know just for a reference frame if we look back eight years ago um you know real estate software Services was pretty much a cottage industry there was a few very large incumbents that had been used for decades but not a lot of innovation and certainly not a lot of stuff happening we've seen this you know explosion of development um to the tune of tens of billions of venture dollars and hundreds and now thousands of different points Solutions coming to Market and I do think that pre-pandemic we were really starting to kind of Hit the adoption inflection point going from early adopters into an early majority on its way to a mass market adoption I think that the pandemic and the reopening um have been accelerators in that digital transformation um it is belated and it's happening in a very accelerated way um and I think that you know the reason for that is is that we've had these shocks to the system um different ones for sure but those big changes have really forced people to confront things that that were kind of percolating beneath and so as we've had big changes in the valuation of property as we've had changes in the way that we work and collaborate with our colleagues it's you know really put a spotlight on some of those pain points and driven that that change management that is so tricky um we're still in the very early Innings here with a lot more work to do and a lot more value to unlock but I think that this conference is maybe a great recognition of that I remember just three years ago coming to the first blueprint year over year the growth has been extraordinary and that is a good sampling of what's happening and what we now call proptech and if I can add to that and uh I wasn't paid to say this but deal path has really changed the way that we do our transactions because I mean five or six years ago pre-pre-deal path we were really tracking about seven to ten different data points on our our Acquisitions you know when we were screening deals and data is now a competitive Advantage for any firm that's trying to build an AI platform or a machine learning platform and now that we've implemented deal path we're probably collecting 30 to 40 data points on each property at screening or at ingestion and that's even before we started doing full due diligence and so we're now building this really rich database that we think will be a competitive Advantage as we do transactions down the work Road whether it's you know to figure out what are the what are the best comps um you know where have we done deals before where have we worked with burgers before makes sense yeah I mean you kind of have to have clean data sets and you know organize data sets in order to get much out of Automation and some of these other and then AI which is coming up now obviously a big topic um you know with generalization with generational AI you can actually create new content from scratch versus kind of the AI we've had for the last couple decades how is uh this new form of AI affected and how you look at you know prop Tech space and Commercial Real Estate and within your businesses has it changed the types of things you're investing in um the types of projects you're pursuing and like what do you think the potential is there potential is really huge thing where Peak pipe cycle right now uh which I think is consistent with a lot of what we've heard over the last two days but the potential is huge and for large companies like nuven that are you know owned by even larger and more conservative companies like Tia we are experimenting but have not given access broadly to tools like chat GPT because of the compliance and legal implications of you know sharing potentially confidential information with tools like that the right kind of guard rails need to be in place before we roll something like that out or deploy a tool at scale but we're certainly starting to experiment in controlled environments and that's starting with RIT department and they're prioritizing use cases um starting with like public data and information and then slowly I would expect towards like 2025 we'll hopefully have tools more widely available curious what your guys's organizations are are doing in that vein it's very similar for us we're a large institution data and privacy you know comes first before anything else but but we are moving as fast as I've ever seen our company move in terms of you know implementing technology so AI is coming uh while it's here you know many of our vendors I think will start implementing it far in advance of when we do a kind of a corporate scale so I know dealpath is working on some AI technologies that I'm I'm personally very excited about you know AI investment memo generation uh will significantly save time for our acquisition teams um that will then allow them to screen more deals and be able to scale our business so that's kind of what we're seeing you go first Carrie okay um so it's been really interesting in the past few months I've switched my mind share from focusing mostly on the assets to probably 40 to 50 percent of my time working with our it legal and compliance um to bring various whether it's automation or gen AI into the company we have similar issues where um you know you have sec rules um you know you can share data outside you need things to be auditable so we can't even use the open AI Enterprise chat gbt right now that said we've built our own we have our own integration with them so there's a lot to be done and then there are also Solutions in the market that use AI use gen AI so you know we're using betterbot which has a gen AI chat bot to help prospective tenants learn about you know a multi-family building they might live in so there's a ton of stuff going on but it is it is hard to thread the needle with legal and compliance definitely it seems like from a large company standpoint you're in a good position with Gen AI because uh generated by I may have said generation AI but generative AI um because you've got distribution networks you've got assets already that you can apply it to and you can cut out costs there fairly easily whereas like a new company coming to the space you've got to build those distribution networks you'll probably have less of an immediate impact on your business I mean would you say that's true or yeah I might jump in here which is that maybe um and I think if that's a function of your data strategy and you know the cleanliness and hygiene of your data assets and you could be you know a very large firm with tremendous data sets that you're able to leverage immediately you could be a smaller firm that doesn't have as big of an existing data set however it's organized and structured really well and you're processing information on a daily basis that you're able to utilize so I think that maybe that's the exciting part is like how broad the applicability is it really is for everyone and right now the new hotness that we're all talking about is generative Ai and there's a lot of exciting things about it that I'm sure we'll talk about I think that what we now call like the legacy of predictive AI is also you know it's technology that's been used for decades but it is underutilized in real estate and there's a lot of value to be had regardless of a generative AI or predictive AI I um a lot of this is just about automation um and I think that for most clients they don't really care what it is they just want it to work um and so we get a little bit too hung up on the technology itself um and I think really focusing on the pain points or use cases is maybe the best place to start now I do think that with these data strategies with AI in particular we're kind of going through our Napster moment um and what I mean by that and by the way I'll credit uh Jason momic at Ironclad for describing it that way um what we're doing in generative AI today um I think has captured the imaginations of many but it's also like pretty blatantly like illegal um and so the information that is being used to train these models um isn't exactly you know the owned assets of those large companies we still need to figure out what the business models are that will be realistic for the longer term we still have a lot to iron out on the cost structure because while there's lots of fun prototypes that we can demo operating at production scale is extremely costly um and something that we're all still trying to get our arms around so I think that there is a lot of opportunity and now I think more excitements generative AI has brought these tools and capabilities to everyone um something that I heard Scott say a panel a few weeks back is that AI will be the success of a thousand Innovations um I agree completely except we might add orders of magnitude um where you know all of us individuals are finding uses for it in our individual lives and business work teams are starting to leverage it more broadly companies are challenged with how they can control and utilize it in a compliant way um and that is happening very very fast and hugely exciting when when do you think that you know Jenna Jen and I will for example like be able to underwrite a new acquisition all on its own without you know too much human involvement is that like 10 years off or is that you know shorter I would follow Scott Dunphy on LinkedIn there there is a company right over here smart Capital that ostensibly does that and I'm going to be demoing with them soon so that might be something interesting but hopefully soon yeah yeah one of the problems is that one of the one of the big valuation vendors that all the large institutions such as ourselves use and particularly the funds that Mark their assets every single quarter we all use the same software and until that software evolves and about I won't name their names I think you guys can probably figure out who they are and so their software evolves we won't be able to get to automated underwriting but I'm hoping that eventually they do evolve so that the industry can involve evolve and I think five to ten years from now we will have some level of automated underwriting but with all of this Ai and machine learning I think humans will always remain in the loop so AI made you a cursory review that kind of Narrows your funnel but that's when the humans come into the loop and they start doing the fall under writing so that's my hope so moving on to the market um obviously commercial real estate is having headwinds at the moment you know residential started last year it's uh now it's hitting the commercial space from a transaction volume standpoint I think we're about 70 down from the previous highs of last year how has that been affecting your businesses and um and has it affected Tech adoption or the enthusiasm for Tech adoption or investment in your businesses so for us there's been a two-sided coin so on one hand obviously slow transactions is not great for a real estate investor um but from a tech adoption and experimentation perspective there's such a heightened focus on managing those assets and it's squeezing any sort of operational efficiencies that we can possibly get uh technologies that potentially enable new revenue streams to the extent that is possible like we are down to look at all of that um and there's a lot more mind share available in the form of human capital not necessarily budgets uh which are pretty tight right now and I would say that's probably pretty consistent across many of our large real estate firms but there's a lot of human capital those folks that were on Deal after deal after deal are freed up to work on some of these initiatives be internal Champions so I see it kind of as a double edged sword or two sides of a coin um with some some you know Green shoots of there's more mind share available for new things yeah I mean it's certainly not a good time to be a real estate investor but I mean the times I think are going to start getting good because it seems like maybe interest rates are starting to Peak and prices have reset so it should be you know it should be a good time to start finding deals in the market so while we're not actively buying right now or at least not very actively buying we are taking this time to kind of clean up our data and you know get it ready and as I mentioned we are building a database of all the deals that we see in the market whether we pursue them or not um and AI is definitely helping with that I guess from our perspective what we're observing with our clients is while there's fewer transactions being consummated very interestingly there's a lot of people in the market both interested buyers and sellers um that are I guess struggling to agree on pricing um so this is a little bit different than other cycles that we've seen um so it seems like data is even more important now from what you guys are saying I think if that's true and you know we can talk about maybe the the changes in use and what the highest and best use of different properties are but at the end of the day like underwriting is tricky right now um and the cost of capital has changed dramatically over the past 12 to 18 months um so with that I think that you know people are trying to figure out what their portfolio is worth what other assets are worth and there's a lot of effort going into to that understanding which is you know I think most effective when it's data driven um another data point just in terms of like timing is that historically bankruptcy has been 12 months after the FED starts reducing rates um we have not started that time clock yet um we're still you know perhaps increasing rates um so I think that what we heard earlier this year was hope or expectations that that deal volume was going to pick up the second half of this year today right now I think we're hearing like oh you know 2024 maybe the second half of 2024. um that would still be kind of ahead of that that typical cycle timing and you know while I think that there's a lot of important work to be done in between um we might not actually see you know that that real rise in in value that real rise in transaction volume um so a little bit later there's another shoe to drop so to speak um so what about from a business model standpoint like obviously transaction based business models are tougher now is is that you know as a deal flow software like how have you design your business model and and how's it working out boy you know a couple of years ago when things were heady and people were paying high prices for trophy assets um I think that our per user license subscription model is having an Envy of not participating uh in the transactions um today on the other hand we're feeling quite lucky um that that's not our business model um so I think it just depends um but at the end of the day um we do still have a significant volume of dollar activity so if you look back on a 10 or 15 year basis rather than just the past five years um and it feels inevitable that there will be an increase time frame TBD and I think that that this is the important work over the 12 to 18 month time period where we try to reconcile what the right pricing is um and re-establish a more liquid Market we think of deal path as an acquisition tool Bill are people using it for dispositions as well um yes boy I'm appreciating the attention here I like this um but we do support uh we're all picking on you because you're the startup thank you for that um we support Acquisitions dispositions development projects and financing and you know we do get to kind of see across the landscape and so during different time periods you know we saw seven eight nine years ago a lot of activity in industrial and Logistics not because that is necessarily our particular specialty just because e-commerce was driving so much need and activity there shortly thereafter we saw a lot of activity in affordable housing development because the lack of Supply pre-pandemic into the pandemic today we see the most Capital formation and the most activity on the debt side I think we thought pre-pandemic that was indicative of where we were in the market cycle and that institutional investors were seeing the most compelling risk-adjusted returns being higher in the capital stack with more protective that seems to continue today so I want to talk for a second about where the most innovation in commercial real estate is going to come from in the coming years I mean commercial real estate I think of as a tougher space to innovate in than residential because you've got a lot of bespoke transactions a lot of human capital involved kind of in each decision that you're making bigger transactions are obviously even more bespoke right and those are the real Revenue drivers a lot of the small cap stuff tends to be distributed and fragmented um do you think that it's going to be the big companies the big players who are driving the disruptive innovation in this space and use of technology or the next five to ten years or do you think it's going to be you know new companies that are starting out from scratch I think that's a really hard question um I think it comes for the newer ones I think it comes down to a lot of leadership and how well they know the real estate industry you can kind of notice um where their foot faults um but I think I think you mentioned it you know there's so many points Solutions and while they're great and they're much easier to implement from my perspective um it's really challenging because then you have a million different softwares they might not necessarily connect you're dealing with all these apis so um to your question on what I think it really depends on the leadership of the company how Innovative is the company is it is it a big Behemoth that's going out to a choir and can they absorb that company well I don't know but um at the end of the day we need more consolidation and and less of the point Solutions Gene what about from your perspective um taking the question more from like a startup versus large incumbent real estate firm perspective I think it's got to come from both sides um I think the true Innovation is going to come from the startup world but I think from the large real estate companies like represented up here the willingness to work with the earlier stage companies and help inform those product development Cycles um and the fluency to be able to speak to Tech teams uh and Founders in the startup Community is going to be absolutely critical and then of course the adoption piece and making sure the education is there for you know the rank and file to actually use these tools um because you've always got kind of the people on The Cutting Edge that are really interested in learning something new but that doesn't necessarily trickle across the entire organization so I think it's a bit of a cultural shift and I'm seeing you know a lot of exciting examples of larger companies engaging earlier in a startup's life including my own I think we're even in the last two years that I've been a part of nuvine we've gotten much more comfortable as an organization engaging with like a seed stage startup versus even two years ago you know we were super psyched to work with Mike and team but you guys have been around for a while um you're more or less a household name in our world um and so that's an exciting change I think is going to be important to to Innovation or unlocking the next wave of innovation what are what are some of those ways that like as a bigger Corporation you're Global ahead of proptech like what are some of the pieces of advice you give to other people uh at Naveen and how to engage with early stage companies they work on very different timelines so I think managing expectations and I coach startups to really learn who you're actually selling to so very often whose budget a tech solution is going to come out of is not necessarily the end user and it's certainly almost definitely not the decision maker so those might be like three different parts of the organization that you really have to understand um who is making what decision but who's then going to actually use the product and so having enough conversations to to Really suss that out I think is pretty critical all right and uh Mike from the startup standpoint like I assume you think that startups are better to innovate but would love to hear your thoughts on that yeah that's tough I I think that there's like a lot of opportunities and that there's kind of benefits and drawbacks to each side um when you've got scale um it's a much different game um than when you're an earlier Stage Company so I think you know approaching it from different angles and sometimes that's complementary and that's oftentimes where kind of the magic happens um I guess I do think that for a real estate investment management um there are these very clear economies of scale and in fact also benefits of lower costs of capital that is almost like gravity um that the assets and the value is going to continue to kind of congregate and aggregate um with those larger pools of capital in order to raise and deploy and return on billions of dollars you have to have purpose-built tools and solutions thus haven't really existed before they're being built before our eyes um so that is really what is driving this wave of investment in Innovation and what we not call proptech makes sense um I guess one kind of last question is to go down and hear from each one of you it feels like you know sure we're at a difficult time in the capital cycle and transaction cycle but there's a lot of ideas and Economic Opportunity around uh your technology Innovations and Commercial Real Estate right now if you're gonna go start a company and in your case start a new company you might uh what would you what would you start and why maybe carry first I really like this question um and I had to think about it for a while but one of the things I love um to work on is on the data front and data around our assets so who's coming um what's their spending profile what's the foot traffic all of that stuff time of day time of week everything um and then we and that's very much on the macro like you know how many people coming to Chelsea Market came from New Jersey versus came from Florida and so we understand is that a regional or Global that kind of thing um but then we also have tools that are you know whether it's video systems or beacons or whatever it is to collect information on site and so I would personally love to create or see in the world a tool that can knit those together so I can see the full funnel of who's coming to the asset where they're going on the property um and just another Nuance is that with the cell phone data we don't have insight into anyone outside of the United States we cannot collect that data so it's it's a getting that on the ground is also a great way to kind of pull it together and get the holistic story so I would do that how the buildings were used and such who's coming where are they going are they coming in this room or that room are they going to gap before anthropology like getting that full sense of what's going on at the asset what would you call your company I don't know I have no idea I'm sorry come back I can come back I'm sorry that's unfair this is this is more for retail it's not really commercial sorry Mike um well we have Decades of work ahead of us at deal path uh but for variety I'll offer something different um I think that if there was going to be another business it would be uh in infrastructure and Renewables play um called mopoco for moon power company that would generate clean renewable electricity harnessing hydrostatic pressure driven by lunar gravity I want to build a big pipeline from the Pacific Ocean to the deserts here um and move salt water back and forth to drive turbines very different directions Scott I would build everything up for Real Estate so as we discussed and as you've seen there are a lot of different startups and companies out there that do a lot of different things but a lot of them complement each other and I saw many of those yesterday where I was like that company should merge with that company because they would work really really well together and so I would build a company that just connects all that stuff so people like ourselves and others in the audience have just a One-Stop shop for all their real estate technology and we can stop having 20 different tabs open on our Chrome browsers awesome I'm gonna go something in like the education space meaning like for people who shy away from using the technology we have available how do you maybe use AI or co-pilot to let them know actually what tools we have and how to use them um instead of taking a lot of Manpower and time from our I.T teams doing kind of like education sessions companies but I think really necessary I feel like there's a lot of institutional knowledge especially in commercial real estate that is locked in people's heads and like you could find a better way to disseminate that um in an organization that would be helpful [Music]