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What has been going on in the US PropTech market?


US PropTech market

In our four part PropTech blog we will uncover the effects of COVID-19 on the Proptech market, look at stand-out PropTech startups and verticals that they have emerged in, where the Real Estate Consultancies and VCs are placing investment within the Built Environment market, and lastly the trends LMRE has seen within Proptech recruitment and hiring. 


Right now is the golden era for PropTech as the bridge between real estate and technology is finally being trodden.

There’s an urgency for solutions that can tackle our most prominent issues within Real Estate which looks at how and where people work and live. If we look at commercial real estate, there’s a lot of investment that’s pouring into solutions that can help with the return to work that enables a hybrid and flexible workplace, as well as the sustainability and health and wellness taking place within buildings. 


We have seen a huge increase in the mass migrations from cities and the suburbs heading to greener pastures, resulting in an influx of single family rental properties. Another area that has seen vast mass adoption is tech that enables virtual tours or remote property management for buildings, as a result, PropTech investors are very bullish on the market, keen to take advantage of the favourable conditions. Last year in 2020, around $24 billion was deployed into PropTech businesses and that is expected to grow by at least 25% by the end of 2021. There is plenty of tech adoption happening in real estate, which as a result is seeing PropTech thriving.

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Let us begin by looking at the effects Covid-19 has had on the Real Estate and PropTech market across the United States and Canada.


Covid-19 has been a massive accelerant for technology adoption and real estate technology. The Real Estate industry leaders have had to rethink how physical assets are being built, operated and serviced given the lockdowns. The construction sector which has been often labelled as archaic has looked into vastly improving general safety trends and use of health and wellness measures off the back of the COVID-19.


It’s certainly a good time for PropTech start ups.


The pandemic has fast forwarded innovation within real estate technology by an estimated 10 years. In many ways PropTech startups are now getting their foot in the doors of real estate corporations that they wouldn’t have previously. These traditional real estate companies are waking up to the fact that there is technology out there that can drive efficiency, create transparency, help with vacancy rates, and also to become more sustainable as a sector which is key as the Real Estate has one of the highest carbon footprints – it currently contributes to 30% of global annual greenhouse gas emissions and consumes around 40% of the world’s energy.

As a result VCs are waking up to this, the amount of investment is increasing dramatically, which means that at LMRE, we’re working with PropTech and Real Estate Technology clients at a scale that we haven’t done previously with a huge demand for talent within the PropTech market with technical skills. According to recent data from Crunchbase, VC-back real estate companies have raised nearly $11 billion this year, up about 22% from a year ago.


Looking at the bigger Real Estate corporations who are adopting technology and innovating, are they outsourcing or are they building tech in house?


At LMRE, we have witnessed a combination. There’s a sense that the more traditional Real Estate corporations are thinking, “we need to do something, we either need to invest and outsource or we need to build it in house’. The likes of Brookfield has been investing in companies like Convene, Lane, VTS, Latch. There are also many companies that are building in house such as Oxford Properties, who are looking at how they can build technology, and implement their existing assets. The same can be said for JLLT, a whole side of their organisation has been created over the last few years, aimed at servicing not only their own portfolio, but their existing clients. It’s interesting to keep an eye on these big tech houses but also looking at the other leading consultancies whether it’s the Deloitte or PWC, these big investment funds in the real estate space have the sign off and budget to make tech hires because the heads of digitalisation, analysis and innovation don’t come cheap as they are in high demand!

What we do at LMRE is work hard to champion PropTech, there’s a certain stigma that moving over from sectors such as finance or FinTech to Proptech is a risk but it is not a hard sell when you look at the vast investment which is going into the PropTech market. 


What’s happening in Canada?


Oxford Properties headquarters are in Canada and their strategy, their competitive advantage will come from developing internal capabilities, especially when it comes to building up their advanced analytics department. They have been hiring talent who have machine learning experience, but also data science experience, so they will be able to build the technology in house. 

If we look at Mattamy Homes, which is the largest privately owned home builder in North America, they have created their own venture arm. They have built up a team of 15 individuals tasked with building new business lines that can help not only their core business, but also can be commercialised for use by third party home builders and as a result building up new revenue streams internally

Avison Young is also one making a large investment in data strategy. They’re building AVANT, which is their global intelligence platform that combines both public and private data sets around real estate and adjacent markets, essentially building up this data product to help their clients make more efficient and successful real estate decisions. 

We’re seeing an increase in demand and a lot more specialist technical roles, as well as innovation and investment roles within the PropTech market. There’s a massive need for companies to continue to invest in their employee skills, and to upskill to match the emerging technology that is being created. Companies are also faced with the challenge of shifting some of the existing workforce into the digital world we now live in due to the potential cultural change between the old school real estate teams and these young technologists that are joining and changing up their environment and landscape.


LMRE in the US:

With the lion’s share of the Global VC investment originating in the United States it was a natural next step to launch our US division in 2019. This was done with the sole aim to be closer to the PropTech community and help support an increasing number of rapidly expanding cohorts within Real Estate tech and innovation.

As we continue to partner with many of the early-stage adopters and entrepreneurs within the United States and Canada whose biggest challenge is finding the right resource to help them scale their teams and products.

Are you scaling your business as technology becomes ever more prominent within the Real Estate industry? We can help your business by saving you valuable time and money and search the market for you – leave it to us, specialist PropTech recruiters. Leave your details and a consultant will give you a call back today. 

LMRE are specialist PropTech recruiters, if you need help growing your business or making any key hires please get in touch via the form below!

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