Commercial property services giant Colliers and technology innovator Techstars have created a proptech accelerator that helps technology companies develop and fine-tune products to serve the commercial real estate industry.
The partnership selected 10 companies from hundreds evaluated, placed them together in a Toronto lab, and with 150 mentors, helped them advance their commercial real estate products and services. The companies are from seven countries.
The idea is “to find efficient solutions . . . to evaluate a broad range of property technology opportunities in the commercial real estate property space,” says David Bowden, CEO, Colliers Canada.
“Some of these companies (two are from Toronto) aim to create efficiencies in construction, building systems (the Internet of Things),” Bowden says. Upgrading building systems is often capital intensive and much of the sector is aging and due for upgrades, so the timing is right for a fresh approach.
He says one of the 10 companies – Raybased – “provides a smart building control platform connected to all of a building’s systems. It can forecast when any system has a problem or is about to fail.”
Raybased’s technology can be installed in a small existing building in about a week with little retrofit work. “It is not invasive,” Bowden says, adding that it can reduce overall operations cost and energy usage by 25 to 75 per cent.
Another company – A Retail Space – helps retailers find space by using data analytics that factor in customer traffic patterns. Tracking is done via mobile phone movements and considers age, diversity, gender and income. “We think there is a big demand for that type of data driven analytic solution,” says Bowden.
Other startups, he says, are focused on technologies to improve commercial clients’ risk profile.
The 10 companies spent three months working with the mentors in a Techstars space in downtown Toronto, close to Colliers’ international headquarters, says Ben Liao, managing director of the proptech accelerator powered by Techstars.
Mentors are following up by helping to introduce the companies to potential investors.
“This is the first time that two global organizations have come together at the intersection of real estate and technology,” says Liao. “We have the ability and opportunity and support to be able to help shape this emerging industry.”
Liao says the accelerator had the startups working in a co-operative space over three months before their products were demonstrated to industry experts – many of whom were mentors – in December. Among the mentors were Colliers customers, while others came from companies such as Oxford, OMERS and Tishman Speyer. Other mentors were successful entrepreneurs and venture capitalists.
Liao says Techstars worked closely with Colliers on “companies with near-term value-enhancing opportunities,” adding that companies with mid- and long-term objectives for the industry were also evaluated.
The primary objectives are to either help real estate companies boost revenues or decrease the operating costs of their real estate assets, he says.
Bowden and Liao say commercial real estate – traditionally “a fourth quarter tech adopter” – is changing.
“What we’re seeing is technology is finally successfully being deployed in the industry,” says Liao, describing the global real estate market as a $220 trillion (total assets) industry “that represents a tremendous opportunity.”
“Every industry is looking for efficiencies. Every industry is looking for information that will help them make better decisions and these products help solve these two issues,” Bowden says.
Along with the two Canadian companies from Toronto, others in the “inaugural (accelerator) class” include three from the U.S., three from Europe and two from Asia.
Liao says a second class of 10 will be selected for the proptech accelerator program later this year. “We’re looking to invest in companies that address both near-term, value-enhancing opportunities for our clients and professionals as well as longer-term opportunities that, with strong technology platforms, will help us push industry boundaries.”
Colliers’ global footprint and its work in various disciplines are reasons that the company is looking to proptech firms around the world, Bowden says.
He credits the accelerator’s success with Techstars. “They look at about 40,000 companies a year in a large variety of industry disciplines.”
Bowden says that Colliers and Techstars have been assessing ideas on how to advance the industry for years. “What was appealing about this program is it looks at hundreds of potential companies to invest in rather than centering on a single idea.”
He says most of the companies have market-ready technologies, although some have products that will take two to five years to gain traction in the industry.
Feedback from companies in the program has been positive, Bowden says. “It advanced their learning curve dramatically from what they anticipated the market to need.”
Colliers is committed to about a US$1.5 million annual investment in the proptech accelerator program, which, Bowden says, is expected to continue for years to come.
The Colliers CEO says Colliers and Techstars will continue to work with the first 10 companies. “We’ll partner with all of them to advance their products.”
While there are other proptech accelerators – MetaProp and the 5th Wall are examples – the joint initiative between Colliers and Techstars is the first with a global reach. “I expect we’ll see more in the future as our initiative continues to flourish,” says Bowden, suggesting the accelerator movement will help trigger a significant evolution in the commercial real estate sector in the next five years.