Global PropTech Data with Robert Courteau

In this episode we talk to Robert Courteau from Altus Group about Global PropTech Data.

Today’s guest is Bob Courteau, chief executive of Altus Group and we will be talking about the power of global data.

Louisa 

Altus Group has clearly grown and gone from strength to strength, and presuming along with the recognition of the importance of data, why do you think this there’s been such an increase in interest in it from the real estate industry?

Robert 

Yeah, it’s a great starting question. Like for me, it’s pretty obvious why the industry is really becoming really much more focused on data, it really comes down to three things, one of one of them, and the obvious one is there’s a return on controlling your data. When you don’t control it, it costs you money, the actual opportunity cost of redoing work, not having efficient workflows is high and we do an annual commercial real estate executive survey, and we asked a question about how much time are people spending, managing and organizing data and frankly almost half said that they’re spending 15-25% of their time managing and organizing data. So it’s just that cost imperative is critical to get under control. And then clean data, really getting control of how you look at your business is fundamental to good governance, insight and decision making. So at the baseline, there’s a there’s a high need in our industry. What’s accelerated it even more is that we’ve had a bunch of people come into our industry from other industries where they’re really good at monetizing data, turning data into information, people like the CTOs, data scientists, and frankly, even some of the PropTech companies have seen how you can take data and turn it into information. And so the new normal for real estate is to really go after this huge demand for information in a way that it can really change your competitive dynamic 4.05 And then you throw the pandemic in it and you start thinking about things like customer demographics, the implications of community, retail, the future, mix use work and live paradigms, up and coming trends around global supply chains, new neighbourhoods, new cities, the high need to control tenant experience, and client and corporate expectations, competitive contract – this takes you into a whole new world of understanding and a whole new set of data for industry that is going to be important.

Louisa 

Yeah, back to your point about  CTOs coming to our industry, I’ve found a lot of my clients, we are now trying to attract CTOs from all sorts of other industries, whether it’s finance or other technology sectors, and they’re now seeing the huge opportunity they have to really change the real estate world.  That’s the big pitch that I do and all these real estate investment funds are finally hiring these CTOs as well, or heads of innovation, digital transformation managers, so it’s an exciting time for  the change of data movement of people. So how has your customer and clients list grown Over the years? Are they larger client’s market? Are they smaller clients? What’s the change you’ve seen?

Robert 

Well, I think the biggest change we’ve seen is the globalization of our client base. We were always strong in Canada, where we originated and in the US that that has been historically, the focus of our business, but about four or five years ago, we made a conscious decision to invest in a global capacity, really, it was in the primary orientation, really supporting the globalization of real estate. When we start thinking About the biggest companies in the world who are our clients, it’s just following those clients around the world in a way where we can support them in their needs and for that reason now we have offices in Sydney, Singapore, Hong Kong, London, Paris and truly it is a global business and that’s really helped us grow our client base in those markets as well. So really, if you look at our client base in Canada, the US and the UK now we’re really a valuation standard. We built functionality in Germany and France to really make sure that we achieve the same level of standardisation. All of this sets up the opportunity to springboard into a global data platform. And we’ve done that, and we are fortunate to work with some of the biggest companies in the world and work with them to get control of their assets on a global basis using our software, our data and our services platform

Louisa 

Looking at those three platforms you just mentioned, how have you managed to service all your  global clients and still give them access to data, and how do you give them the ability to generate the most value from it?

Robert 

So we in the US have always done really well with our guests as a platform for valuation. But what we’ve done the last four or five years is turn that into a technology that allows people to get control of their portfolio. So really started thinking about normalising decision making on assets in multiple markets, both for the origination or the acquisition, but also in terms of planning your portfolio budgeting, looking at the sensitivity analysis associated with your portfolio, so we have a technology now that allows the biggest companies in the world to actually look At their assets on the basis of value against their plans, their goals in terms of achieving their investment performance. And so that really has been a big driver in the growth of Altus as a global product. But we started by supporting these companies in the US where we have 100 funds on our cloud based data platform and we’ve married that up with a mid-market strategy, where we can support in the first on demand environment, now in a cloud environment both small and mid-sized companies so they could actually have access to the modern infrastructure. And now we have over 6000 software customers, if you take the top 200 investors in the world we have over 180 on our platform in some fashion, whether it’s software, data ,in our fund management platform or evaluation management platform. So we have multiple entry points and we’re now connecting these solutions in a way where people can take control of their portfolios on a global basis. So lots of entry points and by making investments in offices and people in each of these markets, we also have visibility to what’s going on and on a global basis

Louisa 

Yes, and for you is there a particular part of the product that you’re excited about since joining as CEO or has there been to particular success story?

Robert 

Yeah, I think the first shift we made is to turn Argus valuation DCF into an enterprise product. And we continue to add a lot of functionality around that, it was a three prong strategy – extend the functionality, and go global, and find ourselves in a place where We could actually integrate it with a cloud based platform so it’s like a modernization of the applications. And we continue to make significant strides in all three. So the extension of the product in terms of functionality and making sure that our biggest clients can operate their portfolios on a global basis. And now with Argus Cloud, they’d be able to do that in a modern way that, frankly, coming back to your first question now allows people to control their data, not only through Argus, but through things like API’s and the ability to include Argus data as part of other workflows that they might have in the business.

Louisa 

And since your products are changing, your client and customer base is growing, is the vision still the same? I think a lot of a lot of my clients and businesses out their struggle when you go global to maintain the right culture and vision, how does your business go about doing that? 11.00

Robert 

Well, I think we’ve hired amazing people. And it’s a huge differentiation for our business, a big part of that is we absolutely want to make sure that the entry point on these new markets is a customer service entry point. it’s great to have the technology, it’s important to be able to give people the functionality they’re looking for, cloud based technology opens up the opportunity to really, really innovate on how you operate your business on a global basis. But at the end of the day, you have to have people that are like minded about making the customer the priority as you move forward. And we’ve been able to do that. Our teams in London, Paris, Luxembourg, Singapore, Hong Kong, we’ve added a number of really, really talented individuals, because at the end of the day, people are more interested in the outcomes, the results of all of this new technology and what it means for the business than the actual platforms themselves, and the embodiment of that is the quality of people we have in our organization. And the focus on culture and service-oriented culture and business.

Louisa 

Is there is a shortage of talent in your sector or specific area of your business where there’s a skill shortage where maybe we need to draw in people from other sectors?

Robert 

Yeah, we absolutely have done that, Louisa you know this, in this industry finding people that understand the basic workings and mechanisms of modern real estate and a good understanding of technology and data is really, really tough. And we’ve been able to find some of those people and get them working in our company. But beyond that, we definitely brought in data scientists, folks that understand things like machine learning, really brought in people from the information services business now that are playing big roles in our company. And we’ve even brought in traditional real estate people where they’ve had a chance to really get involved in our technology. So adding all of that together was a big part of the chemistry we’re trying to achieve. Where you can really, really achieve for customers a good understanding of where we’ve been as an industry and where we have to go.

Louisa

Yeah, and if we talk about where you have to go, let’s look at the future. How do you see the demand for data and software changing? What are clients reaching out for? And I’m sure it’s going to change if we’re looking into the post COVID times.

Robert 

Yeah, I think I talked about it earlier in my opening comments. You have to take cost out with data, you have to find yourselves not continually recreating the same data that you had last quarter last month last week. And the automation of your workflows, the improvement in the way you manage your businesses is fundamental. That’s not real estate. That’s every industry. If you have things like straight through processing of data and information, you’re going to be at a competitive advantage. I would tell you that the most innovative largest companies in the world are building huge data lakes that give them information not only from the real estate industry, but from other industries to spot new trends, new opportunities, what are the cities of the future? What are the neighbourhoods of the future? that are going to really drive the way you can create value. value as part of your portfolio. 15.01 And because those companies are driving these kind of new ways of looking at commercial real estate, it becomes a little bit of an arms race, because they’re creating tech envy, with these new models around data, you can be sure that industry as a whole is going to move there and if you don’t keep up with that same kind of original thinking, or innovative thinking, then you’re going to be left behind on those opportunities, and it’ll show up in the performance of your fund.

Louisa 

Yes. Are there any parts of the world, which are slower in this uptake? Are there any future markets you’re looking at targeting as a business?

Robert 

I mean, I think prop tech is a really good purveyor of where there is pace and change. And obviously the US has been unbelievable in producing new and innovative companies and always more to come, more investment in the US. What I’ve observed is in the UK is all of a sudden not far behind, and frankly catching up in many cases, a lot of very exciting companies. But now what you’re seeing is that the world is turning to PropTech where traditional venture capital companies are now around the world looking at supporting this industry because of the opportunity to accelerate the way businesses is done, maybe more than any other industry in the world because historically we’ve been a little bit behind and so the catch up that’s going on right now is amazing. So the hot areas, and the largest companies are in New York, Toronto, London, Paris and so that’s where you’re seeing a lot of the innovation, led by the biggest companies in the world that are finding different ways to do business.

Louisa 

Yes, my aim this year for LMRE obviously we cover east and west coast, but my aim was to go to Toronto to get a good feel for the prop tech community there. Unfortunately, some of the travels been slowed down which Bob, I’m sure you’re slightly enjoying not being on a flight nonstop! But I can’t wait to go to get a good feel for that market as It seems like there’s a lot of activity going on there. Going back to your point about other people come into the market as a growing space, what makes Altus the right choice opposed to other companies out there? What gives your competitive edge?

Robert 

Why I think I already said we have the best team in the industry, I really believe that. We believe in convergence, it’s not software, it’s not services, it’s not data, it’s actually a platform that allows people to really think about how they can collect the information to run their business. we try and make the company exciting and interesting for the people that are here and we believe in promoting choice and openness and as part of our API strategy more and more, we believe there’s an opportunity to share data in the industry and do that not only with our clients also with other innovators in the industry, whether it’s the large incumbent players, or some of the early innovative PropTech companies and I think we’ve invested in PropTech directly, we work closely with the PropTech companies and even with some of the venture capital companies to increase the move towards an open and innovative world. So I think for all those reasons we’ve prospered because we’ve been open and innovative, we’ve actually enjoyed a disproportionate amount of success as a company, so give to get.

Louisa 

Yes, and outside of data I’m ever talking about collaborating in businesses areas, what other innovation do you see severely affecting real estate out outside of data?

Robert 

Yeah, I mean, the whole, the whole world is going to be driven by AI machine learning, the ability to collect data at scale and to put that data into information. So the two big things as we go forward and the transition we’re on is to be able to combine the automation of processes and workflows, not only inside of Argus and our valuation management platform, but to do that in partnership with other companies in the industry. And then to really, really light that up, the ability to use AI and other modelling capabilities for decision making is going to be very, very cool.  But then if you look, if you look forward to online marketplaces, the way consumers are going to interact with real estate is going to change, so creating choice and understanding of different types of relationships around the world is also going to change. And that is going to create complexity and that’s going to require some level of new efficiency to be able to realize the opportunity.

Louisa 

That covers my question instead of where do you see the next big opportunities for PropTech post COVID, and I completely agree with you, you’re going to see an uptake in those areas you just mentioned. Specifically looking at Altus, where do you see Altus five years down the road?

Robert 

Well, we are organising ourselves and have been for the last six years to have a global integrated cloud-based monitoring platform, so people can really operate their portfolios in that fashion. We also believe that valuation, the whole appraisal process, is the best place in the industry to collect data regularly with certainty, with underlying information, that gives you the right level of insight on what’s going on in your company and for the industry and we want to really light that up. We want to light that up in ways that allow organisations to have the fundamental platform and information to run their business, improve workflows, create liquidity, understand investment decisions, really give good insights to their investors have proper governance, all the meat and potatoes you see in other industries that have been in some respects lacking. But then we want to flip over and do that with innovators like prop tech companies. again, some of the organizations like VTS and Yardi where we can lift the value not only for our solutions, but in combination with other smart, innovative companies in the industry, and that’s what we’re all about. I would say that we’ve had two lifts in the business, the first lift was the move towards functionality and globalisation. The second one was modernization. And for us today, the big thing we’re working on for the next few years, is all about information management and data in a way that is going to drive the business, and that’s where we’re going, all oriented towards supporting the largest global investment management companies in the world, but also the network that comes with that, the companies that serve those companies, and even in the small and medium marketplaces, give them an opportunity to have access to some of these solutions that are going to be critical to operating your business as a real estate company, a modern real estate company.

Louisa 

Yeah. Well, it’s, it sounds like you’re going to be a very busy man, Bob for the next few years and so on! But it sounds definitely exciting. You’re definitely innovating and adapting and I’m sure a lot of Proptechs would love some collaboration with your business or ways of working together. So I’m sure you won’t be short of people putting their hands up for that. Unfortunately, this brings us to the end of the show but  before we go, Bob, is there anything you’d like to share with the audience and our listeners for the best way for them to connect with you and learn more about your business?

Robert 

Yes, we just held our Argus Connect virtual event and we had Rick Clark on from Brookfield, and he shared a little piece of advice that I thought I would pass along. When you start thinking about what we’re trying to do the industry with others, his advice was, you can accomplish anything, as long as you don’t try and take credit for it. And I think thought that was really, really nice way of looking how we’re thinking about the industry. We don’t have to do it alone, we’re going to try and do with others. And if you want to connect with me, I’m very active on LinkedIn, I’m not that hard to find and I’ll look forward to hearing from folks. And I really appreciate you taking the time to talk to me today.