GenAI and robotics accelerate RE transformation

The latest in real estate technology

November 15

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GenAI and robotics accelerate RE transformation

What’s the next iteration of real estate in the age of generative AI and robotics? How does financing change to support new ways of operating? How is tech altering competition between real estate asset classes?

Brendan Wallace, Fifth Wall’s CEO and CIO, discusses these questions and more with Zach Aarons, Co-Founder and General Partner at MetaProp. Their conversation dives into the macro perspective on the proptech landscape—here are the highlights.

On generative AI’s place in real estate… Aarons explains:

“One of the benefits of generative AI is that it doesn't burn out. We’re just scratching the surface of capabilities with respect to all types of real estate tasks."
- "A category that was just a promise a few years ago, and is now in active deployment, is robotics. We’re tremendously optimistic about the future of robotics. Imagine a crane operator who doesn’t have to sit 200 feet in the air, and instead can sit inside some control center in your office and manage six cranes at once."
"We’re going to see an explosion of productivity due to technologies like telematics, robotics, and then when you combine that with AI—it’s going to be tremendously impactful.”

On how financing and real estate tech funds are evolving… Aarons says:

“I don’t necessarily see a new asset class within real estate emerging but I see a new class within finance emerging. Just as we’ve seen massive growth within our sector—the built environment and VC ecosystem, which didn’t even really exist 10 years ago."
- "I think you’re going to see a similar development in this PropCo-OpCo project finance ecosystem where there’s maybe one or two firms doing it. In 10 years, you’ll see many different firms with significant capital executing these types of deals on a regular basis. You’ll see industry giants looking to get into it as well.”
“What these new firms are able to do is underwrite the business at the operating level—determining if this is really an innovation and how much margin enhancement does that get them. Then they’re able to underwrite the projects even before the projects are in front of them. Their risk profile sits somewhere between a VC risk profile and a traditional real estate investor risk profile. I’m excited for that ecosystem to grow and develop.”

On how real estate assets are evolving… Aarons explains:

“I don’t think there are new asset classes emerging. I think they’re actually fusing together and merging. Look at multifamily or even residential, one of the most popular aspects of a listing is the home office. With COVID we saw an explosion of work from home, so the whole concept of the office is being rebranded as the workplace—you work from anywhere. There’s a fusion of traditional office and traditional multifamily. You’re seeing that with the big REIT players—you’re seeing firms that traditionally only owned office getting into multifamily.”

On Fifth Wall's POV, Wallace says:

“[Real estate owners and operators] are realizing that they’re in competition with other asset classes they never saw themselves as being in competition with."
- "You think about a consumer 30 years ago buying a toothbrush in a retail store. They’re still buying the same toothbrush today, they’re just likely getting it from Amazon. So the underlying real estate footprint of conveying that toothbrush to that consumer is very different. It’s no longer flowing through a storefront, it’s flowing through logistics centers and intermodal facilities.”
“Real estate at its core is: How do we use physical space to create the economy and create civilization? Technology is confusing all of that—it’s mixing everything up. It’s interesting to think about how that will play out over time.”

STORIES WE READ THIS WEEK

PROPTECH

Proptech and fintech move closer together

OFFICE

An old sugar factory is now a swanky new NYC office—its still waiting on tenants

CLIMATE

Where climate change poses the most and least risk to American homeowners

FUTURE CITIES

How AI is being used to respond to natural disasters in cities

CRITICAL MATERIALS

There’s lots of gold in urban waste dumps

WORTH THE SCROLL

FUN FINDS

LAST BUT NOT LEAST

Is the world closer to hitting 2030 emissions goals?

Bloomberg writes: "These emissions goals, set by governments, Wall Street, Big Tech and major polluting companies, are intended to put the global economy on a path to finally start reducing the amount of greenhouse gases accumulating in the atmosphere. Yet, far from being in retreat, carbon dioxide emissions hit a new record last year. That means the world faces a steeper, far costlier and more disruptive journey to reach net zero by 2050."

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Forward-looking statements and opinions as to carbon reduction initiatives and real estate markets or any other matters, as expressed in this presentation, are those of the individual presenters, but are not necessarily the views of Fifth Wall as a firm, and cannot constitute a guarantee of future success or profitable results. As a result, investors should not rely on such forward-looking statements and/or opinions, or on anything else contained in this post, in making their investment decisions. Moreover, certain information contained herein may have been obtained from published and non-published sources prepared by other parties and may not have been updated through the date hereof. While such information is believed to be reliable for the purposes for which it is used herein, Fifth Wall does not assume any responsibility for the accuracy or completeness of such information, and such information has not been independently verified by Fifth Wall. This post speaks as of its publication date, and Fifth Wall undertakes no obligation to update any of the information herein.

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Fifth Wall · 66 Hudson Blvd E · Suite 5340 / 53rd Floor · New York, NY 10001 · USA

The latest in real estate technology

November 15

GenAI and robotics accelerate RE transformation

STORIES WE READ THIS WEEK

PROPTECH

Proptech and fintech move closer together

OFFICE

An old sugar factory is now a swanky new NYC office—its still waiting on tenants

CLIMATE

Where climate change poses the most and least risk to American homeowners

FUTURE CITIES

How AI is being used to respond to natural disasters in cities

CRITICAL MATERIALS

There’s lots of gold in urban waste dumps

WORTH THE SCROLL

FUN FINDS

LAST BUT NOT LEAST

Comments or questions? Send to newsletter@fifthwall.com What did you think of our newsletter this week? Please let us know, we read every piece of feedback.

Comments or questions? Send to newsletter@fifthwall.com

What did you think of our newsletter this week? Please let us know , we read every piece of feedback.