Real Estate and Technology: Out of the Dark Ages
May 26, 2015
Today, we’re at a crossroads. Real estate and technology are meeting. “We’re finally coming out of the Dark Ages,” says Jonathan Schultz, managing principal and founder of Onyx Equities, who presented a Real Estate Dealmakers workshop on integrating the two sectors. “We’re going to hopefully adopt what we should have years ago.”
Schultz heads a firm that owns 40 million square feet of property in 15 states, a private equity fund, and an REO receivership business. He says that when he first entered the industry over 20 years ago, he wanted to be an entrepreneur. But he was competing with behemoth brokerage companies that had huge research departments. So the only way for him to be that entrepreneur, he notes, was to use technology.
“Because of that, I’ve had an affinity for it ever since,” he says. Technology—namely CoStar—allowed him to grow a brokerage firm in a market in which you have to spend millions of dollars on research. “CoStar literally allowed me to be a ‘disrupter.’”
As his company grew and started managing properties, there was a lot of financial data and organizational reporting that needed to happen. That’s when MRI property management software began to come full force into the business and allowed him to be smarter in how he reported to tenants. “The technology allowed me to compete with larger firms that had their own accounting system,” he says.
The problem: There was data in disparate places, which made it difficult to manage. And the industry has relied on Excel and other spreadsheet programs for years. “To me, it’s very uncollaborative… a dead dog,” he explains. “You can’t communicate with it, so all in all, it’s just what you had to do and deal with.”
But today, millions of dollars are being poured into real estate technology. “I wanted to grow my company to be national, and to do it, I thought I needed to be more organized than my competitors,” Schultz says. “I also wanted to sleep at night, and the only way to sleep at night is to have information at your fingertips.” So Onyx went out and beta tested 30 products; there are tons of solutions out there that now do a piece of real estate in a great way, he continues.
After Onyx discovered it was using so many disparate systems, it implemented a platform designed to bring data together for maximum benefit. “It’s proactive, and not reactive,” he explains. The platform has one password and centralizes all of his company’s functions: property management, accounting, accounts receivable and payable, asset management, construction, energy management, investment management, leasing, treasury, and more. While you can get disparate systems to talk to each other, he notes, it’s not as seamless as having all the information in one place. Platforms such as this one also have to answer to pain points; for Onyx, those points are 1) Inability to manage, 2) Wasted time and resources, and 3) Lack of communication and collaboration.
As part of the event, he introduced two technologies that are disrupting the real estate industry: Floored (discussed by founder and CEO Dave Eisenberg) and Relationship Science (discussed by account executive Mark Bechhofer). Floored is a company that creates interactive 3D graphics and technology for the hospitality and commercial, residential, industrial, and retail sectors. Owners, developers, and brokers can use the tool to show clients spaces virtually. And Relationship Science is a platform that helps corporations, financial institutions, and not-forprofit organizations gain a deeper understanding of their relationships with influential decision makers, and how they can leverage those relationships to acquire new clients, retain existing ones, gain access to other decision makers, and more.
“If you don’t start learning about this, you’re going to get left behind,” Schultz warns. “We’re in the beginning of a revolution—there are firms waking up every day and realizing this, and trying to figure out how to solve problems for all of you. That’s a great thing.”