Fifth Wall’s Post

Around 2016, I had a lot of discussions about the ‘PropTech definition’. For me, PropTech is still the fusion of two industries: property (whole chain - built world) and technology. In other words, the digital transformation of the real estate sector. Digitisation is from analogue to digital (from 0 to 1), digitalisation is processes (1+1=3). Digital transformation is about the ecosystem (1+1=11). This goes beyond sub-optimising an old industry with digital tools. For me, PropTech is also not a legal entity of a software company offering a product/service for the real estate industry. PropTech for Good goes beyond PropTech...

Everything is and always have been climate tech. It’s our failure to understand this that has led to the world we see today. Proptech and contech should also be together to make sure we see the real estate industry as a holistic chain of events instead of separated disciplines. Disruption is around the corner where we build smart from start and not just require more information prior to starting any initiative. But also require all information needed, build virtually first, and re use information across lifecycles. NVIDIA and simulation efforts are now used to build ships, fusion reactors, factories and we have the tools to simulate all aspects of any project before anything is built. Digital twins will be the norm and everything, in all industries will be tried and tested virtually first to make sure all stakeholders are okay with what will be done, and for information flow freely across all areas of the built environment. 3 seconds to any information, made understandable through 3D models, and made accessible via asset databases and LLMs for other systems within and outside the industry. Interesting times and ALL carbon perspectives embodied carbon + scope 3x SBTI, and more efforts like local law 97, will come into play.

The term "proptech" was ambiguous from the start. Construction technologies, fintech, insurance, etc. . . (eight sectors in total) comprise PropTech because they are all involved and/or connected to property improvements and operation. To understand proptech, where and what has value to whom one must possess a deep understanding of real estate as an industry, a business and investment - this includes design and construction (build) as integral pieces of the pie. The how-to's of digitizing real estate depends on how far out you're looking into how it will work efficiently w/minimum impact on any previous acquisition of property technology. Todays solutions operate in isolation around specific user tasks without consideration to how one task involves several independent and widely disconnected stakeholders - or the asset its commissioned for. And, without regard to how technology may anchor property owners to a specific technology in a world of emerging technologies. A major challenge considering property is bought and sold as routinely as stocks on the Chicago and New York exchanges.

Agreed, many companies can be classified into multiple areas and even more niche categories like ConTech, CRETech, Climatetech… I prefer to bottle the “built world” into the PropTech segment and then break out the sectors and spaces they solve for and touch. Similar to cos building for fintech, govtech and martech, can also sometimes be labeled PropTech.

Its fun to watch you learn

Proptech is connected to everything we do from Housing, commuting (Public Transit, EVs), Utilities (Solar, HVAC), understanding climate risk to Insuance. That is why we TLCengine - True Lifestyle Cost took a holistic view of Real Estate from overall Monthly basis using AI to predict those costs. Now we can use AI to optimize those from larger community perspective.

Great insight! I agree that the term "proptech" will go beyond software. I've been advocating for the adoption of a digital twin and a building operating system. This would allow better measure and verify to understand effectiveness of deploying new technologies and hopefully encourage active engagement. Unfortunately, I’ve seen the last mile stage of delivery fail with complete integration or onboarding. This leads to operators simply abandoning the process because it becomes too complex or perceived as ineffective. Then rolls in the silencing or the bypassing of system components.  A great example would be boiler temperature controls. I’m sure Jeffrey Carleton has some stories there.

Thanks Brendan Wallace for sharing this unique insights, I totally understand your point, a real estate property with residents is going to be highly dependable on electricity power connection, each household utilizes various appliances, whether that is your refridgerator, washing machine, lighting, television, cooking range or microwave or even playstation, a house-hold cannot function without access to a proper electricity connection. Honestly it is not that the seperation lines between the two have became thinner but the western society are realizing this fact now, more than 1 billion people on the planet lacks access to proper power connection globally. Yet the real realization is yet to come when global oil resources will deplete or become scarce, and nobody is seeing or talking about the nearby energy crisis that is going to affect and hit all global nations. However I do not claim to be an expert on the topic but I have written a book on the ultimate solution, the project can be viewed at https://www.freesourceofenergy.com. However when it comes to real estate and proptech, I just want to introduce a proptech at https://www.sellpropertyfree.com. I liked the insights so I commented to connect the dots. Have a great day 👍

Brendan Wallace this is happening faster than expected - great that you are at the forefront - at AM.51 we are crossing lines between real estate climate construction-tech and energy-tech as well as blurring the lines between planning, development and finance…

Your insights on the interconnection between proptech and climate tech are truly eye-opening, Brendan Wallace. The convergence of these two spheres indeed reflects the evolving landscape of real estate and technology.