Commercial Observer - Proptech in 2023: top principals and investors sound off 

Frank Spadafora, Intapp Real Estate Industry Principal, shared his thoughts on what has him most excited about PropTech in 2023 with the Commercial Observer.

In the article Frank states:

I’m excited to see the continued evolution of data and intelligence being created from digitally connected buildings, not only to drive operational efficiencies and smarter resource utilization for individual assets, but also as the foundation to measure, report and meet a growing range of market and investor requirements in areas such as ESG and tenant engagement.  

These drivers are rapidly expanding due to a combination of growing jurisdictional requirements, such as NYC’s Local Law 97, increasing investor requirements for responsible capital allocation, and quantified ROI in the form of capex and opex reduction, as well as rent premiums for healthy, connected, sustainable buildings.  

We’ll see more of this data quantified through comp and benchmark analysis to value and underwrite CRE assets, driving continued cap rate compression for smart or connected buildings, and accelerated depreciation and disposition of disconnected or “dumb” assets.  Challenges and potential dislocation will make this journey bumpy. The average U.S. commercial building age in 2021 was 53, and retrofitting older buildings is challenging and cost intensive. 

Despite these headwinds, the convergence of multiple market forces will drive this march to connected, healthier, sustainable infrastructure in our built environment. In 2018, a trusted colleague — both CRE broker and tech founder — stated that in five years every property would be valued based on whether the building has a digital operating system. That prediction may be on track, and a growing focus from the capital markets will further accelerate this movement toward more efficient, sustainable, maximally productive CRE assets. 

Commercial Observer – November 8, 2022

Proptech in 2023: top principals and investors sound off