December 14, 2023
[ San Francisco, CA, December 2023 ] Many industry experts agree that capital investments were placed in a holding pattern through much of 2023. Is this trend fated to continue into 2024? The Commercial Observer’s Philip Russo recently gauged the collective opinions of industry leaders to see where demand for PropTech will come from in 2024 and exactly what that demand will look like as a result of macro market trends.
We’ve made our own observations in the past about the lopsided supply and demand dynamic in CRE, so it should come as no surprise that other experts, like Nick Gayeski, the co-CEO of Clockworks Analytics, predicted that PropTech business demand in 2024 will come from a variety of asset classes in the industry. In particular, he pointed to life sciences, manufacturing, and healthcare as major asset classes that will continue to fuel the need for innovative PropTech solutions as investor interest continues to build among these property types.
VTS Chief Strategy Officer, Ryan Masiello, on the other hand, pointed to one asset class in particular that he believes will fuel the PropTech demand: office. He states, “Technology is playing a major part in [the office sector transformation], given there is now a renewed focus industry-wide on enhancing tenant experience to accommodate the flexibility tenants demand in today’s hybrid work environment.” Where Gayeski sees opportunity among the leading asset classes, Masiello sees business opportunity coming from an asset class currently facing challenges.
In addition to observations from these two prominent industry leaders, the Commerical Observer also featured Prophia’s own, Cameron Steele, and his thoughts on PropTech demand. Like Gayeski, Steele agreed the demand would be widespread among a variety of asset classes, additionally, he zeroed in on the opportunities surrounding office product:
“Demand for PropTech will come from every sector to some degree, but the underlying question is which markets are going to generate strength and therefore capital for innovation? Each sector from office to industrial is faced with different challenges but there is no better time than right now to get ahead of market challenges. This is particularly true for struggling classes like office.”
In terms of what that demand will look like, Steele emphasized the growing need for personalized business intelligence and, in particular, advancements around AI, “In 2024, innovation will largely center around defining an AI strategy and devising a plan and process for implementing that strategy. Sidelining AI vendors will no longer work in the coming years.” William Sankey echoed Steele’s opinion stating that PropTech vendors will be in a scramble to perfect their AI solution to offer CRE leaders the best solution for their proprietary needs.
Read the entire piece in the Commercial Observer and if your team is ready to take the next step—of the first step—in your journey to an AI strategy, reach out to a member of the Prophia team.