Between Two Bricks: A Guide to the Top News in Real Estate Tech (#8)

A guided tour of the best stories in real estate with a slant towards new technology and its impact on the future of buildings, neighborhoods, and cities.

Happy Sunday! I don't know about you, but I'm not only losing track of days, but also being more flexible with myself about when I do something. I'm enjoying the ability to both prioritize the most important task at any given moment as well as offer myself the opportunity to work on something when inspiration strikes. What is time, anyway?

This week I'm thinking about which real estate verticals will benefit from the pandemic, like cold storage, and which are suffering, like short-term rentals and brick & mortar retail. I'm also thinking about how the pandemic can or will impact the hunt for affordable housing and commercial real estate more broadly. As usual, I'm also reading about optimizing building performance.

Things to read about this week:

• Red-Hot Cold Storage: Q&A With CBRE’s Kurt Strasmann - "The firm expects e-commerce grocery to become more widely adopted as consumer comfort grows with the practice, and public refrigerated warehouse companies will likely consolidate to gain more control of the cold storage footprint."
• Luxury rental brand Stay Alfred suspends operations, closes social channels - "The U.S.-based high-end property platform suspended operations at the beginning of April, as the coronavirus outbreak took a firm grip on cities across the country and travelers were urged to stay at home."
• Affordable Housing Crisis, Meet the Coronavirus - "Right now, the same question is being asked by millions of people across the world: “How am I going to be able to afford to pay rent?” Many of those posing this unfortunate query are doing so because of the pressure being put on their savings from this so-called novel coronavirus. Stores have closed, populations have been forced to stay at home and commerce seems to have reduced to a trickle. But this question, this most consuming of thoughts, has been on many renters’ minds long before this terrible disease threatened our health and livelihoods."
• A Will to Live: How Omnichannel Can Rescue the Retail Property Industry - "Omnichannel is to retail as property technology is to real estate. Omnichannel technologies bridge the gap between physical and digital spaces in the world of retail, allowing consumers to merge and customize available channels through which to shop. Similarly, property technology also bridges physical and digital spaces, changing the way people interact with the built world. An intuitive website would be the most basic channel requirement. Mobile websites, store apps, web based purchases with options to pick up in store, online product reservations, curb-side pick-up, and shopping through social media are some of the other major channels that should be considered requisites for almost any retailer now."
• Will COVID-19 Distressed Property Lead to a Real Estate Shopping Spree? - "Instead of sellers driving the “stabilization wave” of transactions that our respondents expect, perhaps it will be distressed owners that have no recourse other than to sell at a potential loss, contributing to a market driven by buyer activity. Indeed, across asset classes plenty of owners are positioning themselves to go on shopping sprees. Blackstone has $152 million of dry powder, with president Jonathan Gray saying on an earnings call, 'We have so much capital—that’s a great competitive advantage. We don’t need financing to get things done.'"
• The Coronavirus Might Change Commercial Real Estate Insurance Forever - "A flood of insurance claims is expected to keep pouring in from businesses worldwide looking to insurers to cover devastating economic losses associated with government-mandated lockdowns. Policies typically cover business-interruption costs due to physical loss or damage to a property following unforeseen events such as a fire, but they often exclude damage or losses due to a virus or bacteria. This is an exclusion many insurers installed following the SARS outbreak in 2002-2004, which resulted in millions of dollars in business-interruption claims."
• Optimizing Building Performance During a Crisis Requires Finding the Right Baseline - "Buildings are big, complicated structures. They have hundreds of pieces of equipment that work together in a symphony of heating and cooling, exhausts and intakes, switches and controllers, all firing up and shutting down in an intertwined daily rhythm. Normally, a building can count on the predictable consistency of its occupants to help it be prepared for the day’s events. This is done using software that runs algorithms capable of optimizing the symphonic concert by perfectly predicting what the building will need based on inputs like seasonality, weather forecasts, and usage history."
• Successful Security Plans Are the Foundation of High-Quality Apartment Communities - "Brivo recommends approaching multifamily security through three focus areas: cloud-based access, ongoing monitoring, and optimized physical security. Each of these three areas works in concert to provide a comprehensive security package. Cloud-based access optimizes efficiency by doing away with physical keys or plastic keycards and allowing residents to get into the property via a smartphone app. It also allows residents to let guests in via the app, saving them from having to come down to the lobby. This kind of approach is useful in the best of times but amidst a background of COVID-19, it’s even more applicable: managers can see exactly who is coming and going and limit access to avoid large gatherings and the associated virus risk."

Things to come back to from the past:

• Technology’s Role in Making Our Cities More Affordable - "Cities all over the world are looking for ways to solve the same problem: how to develop economically and still remain affordable for every citizen. The entire use case of a city hinges on the idea that they are a generator of upward mobility, not a preventer of it. In theory, putting people closer together should be more efficient than each of us building our own infrastructure. But market forces dictate property value, not the cost of the resources to build them, so high demand locations quickly become unattainable for most."
• Why Artificial Intelligence is Becoming An Essential Tool For Commercial Real Estate Professionals - "It’s no wonder then that many commercial real estate firms are turning to artificial intelligence solutions to help manage their networks. After all, AI is being used to drive our cars, control our thermostats, even cook our cheeseburgers; so why not use it to improve our relationships as well?"
• Tech-Enabled Rental Companies Are Breaking Down Rent vs. Own Mental Barriers - "The fact remains that rental demand from millennials in the nation’s largest cities is on the rise. These renters are having a hard time securing immediate and convenient leases in competitive markets. The national homeownership rate continues to trend downward while rental demand has skyrocketed to a 50-year high."

Updates from Hello Alfred:

• Coronavirus training by text message: How some companies are keeping workers informed
• Hello Alfred makes grocery deliveries personal, provides full-time jobs
• New Grocery Delivery Service Will Pick Up Anything for $25 a Week
• How NYC Tech Companies Are Supporting Their Communities
• How to Get Grocery Delivery in NYC (and other cities) Right Now
• Adapting to the new norm: how Hello Alfred pivoted its business model in the face of a pandemic (webinar)
• Across the world, organizations are coming together to confront COVID-19 in their own way. Here’s a quick glimpse at what our team has learned in the process
• Doing our part to show support for those affected by COVID-19 by offering our new resident experience app FREE to building teams and creating an Employee Assistance Fund to support local small businesses and front line workers nationwide
• For the third consecutive year, Hello Alfred has been named one of FastCompany’s Most Innovative Companies
• Forbes has honored us as one of America’s Best Startup Employers 2020
• A Slice of Modern Life: How Our Lives Have Changed Over The Past Five Years