And it looks like this…
I recently had the pleasure of meeting Raj Bhatti, CTO of Newmark Grubb Knight Frank in their NYC headquarters. Incredible conversation. Previously at Cantor Fitzgerald, Raj has incredible experience in the financial sector where he built some really innovative trading and communications systems. All of which eventually went on to be sold for billions of dollars!
Now at Newmark, Raj heads tech for the leading brokerage and advisory company (which is also in the process of an IPO). In our meeting, we touched on a few big themes things such as which technologies have the most promise in CRE tech, the comparisons between commercial real estate and financial tech and the emphasis that Newmark's senior leadership is placing on tech overall. It was some really, really impressive and deep-thinking kinda stuff (I tried my best to let Raj know that I was following most of what he said :).
But here is the main takeaway…
Newmark Grubb Knight Frank and Raj are the future of CRE tech. They are building tools and applications for their own professionals that are as sophisticated and smart as any I have seen to date. And they will invest more in them than any 10 individual startups can collectively. It will be proprietary and it will give their professionals a huge competitive advantage in the marketplace. Some of them they will acquire and integrate and a lot will just be built from scratch.
I promised Raj that what we spoke about would remain confidential, but suffice to say nothing like what they are building exists in the market. Not even close. And when you meet with someone like Raj who has already done this successfully on Wall Street, you come to realize why brokerage firms investing in tech is THE game changer for sector!
They have more resources (talent and money) than anyone else and have the luxury of time as well.
They have a built-in audience of their own professionals so they don't need to go outside and market the products they create, they can force adoption and integration.
They understand that one product won't win, but an integration of several tools and solutions in one portal will be the clear winner. (i.e. bloomberg).
I have written previously at length about how I truly believe the future of CRE tech will lie in the hands of the big brokerage firms, as well as the large developers/owners. In my crystal ball, the global brokerage firms will at first build their own proprietary tech solutions in-house but I would bet that at some point down the road the best of these technologies will be spun out and become the industry standard for all the industry to use.. And it will be open and not proprietary. This trend will challenge the entire current tech landscape as we know it.
If I was a startup, I would be meeting with Raj, Michael Hart of JLL, Chandra Dhandapani of CBRE and others now. The era of a one-off solution isn't going to be sustainable when the brokerage giants really start to gain traction in building their own tech infrastructures. And the appetite is there now, so happy hunting!