Friday, February 1, 2019

Golden InfoNuggets - JAN 28 - FEB 1 - Business, CRE, Tech, Blockchain and AI


We use a powerful method of sharing - post #GoldenInfoNuggets on Social Media multiple times daily or in regular emails (every 5-15 days).  We’ve been sharing the essence of articles and a few powerful comments regularly.* 

Commercial Real Estate, Technology, Blockchain & AI

Andreas Senie (11 years - sales, real estate).  "#CRE #TECH'S EXPANSIONCRE adoption of technology has gone from a probability to inevitability.  It's now only a matter of how much impact these technologies will have on the real estate business.  The days of "beltway bob" are long behind us. Although the barriers to success have not changed, levels of personal success, accumulated wealth and expertise are drastically shifting.  To gain competitive edge and understand these shifts we need to look at three things.  (#AI #Blockchain #Analysis #Business #Data #Science #Research #Investment #Startup; edited - for [part I last week] and [part II continues the theme]):
  • "PLATFORMS.  With the shift in technology, we are at a point in history where information, networks and opportunities are available in such a saturated format that being online is becoming more and more laborious.  There are [see article for #links]: Internet Listing Services, 1st Generation Research, Industry Disintermediation, CRM Management, Public Data Aggregators, Crowd Sourced Data Providers, Workflow Platforms, Retail & Demographics, Marketing, Transaction Engines and other platforms for #funding,  #capital raising, investment, sophisticated business development tools, syndication sites, crowd funding, and networking.  Some sites provide laser-focused results, however even those, need to be aggregated, sorted, validated, etc."  
  • "CRETECH continues to enjoy explosive growth with over 3,000-4,000 companies in the space and more than $13.8 billion  invested. Progress: 2015 - the availability of information coupled with new technology made commercial real estate more expansive then ever, evolving a historically-fragmented industry into a network of #information #exchange. 2016 - growth continues across the CRETech space with slow adoption by #institutional real estate companies, focusing on #FINTech. 2017 - validating need for a unified information exchange such as, #OpenArchitecture, Consolidated #MLS, and RE-technology and public-data sharing initiatives, highlighting the need to #aggregate different data sets. 2018 - most platforms are virtual #silos, inaccessible to one another. Hundreds of sensible companies are ceasing to exist, as CRETech expands and contracts. 2019 - for success, CRETech / #PROPTech end users - mostly #RealEstateProfessionals - will have profitable businesses operating the way they always have."
  • "DECIDE TECHNOLOGY STRATEGIES of the 3,000+ 'deal winning' resources available: Ask the right questions based on YOUR pain points; Use directories, news, blogs and conferences; Whiteboard problems, solutions and required changes; Make sure solutions talk to one another and your website, and have a mobile-ready version; Make sure you own your own data; Plan implementation, management and adaptation; Have everything available on one user-friendly portal; Track results!"
  • "ADVICE on choosing 'deal winning' technology strategies:  do homework, keep asking #questions, look for #competitors (chances are, there are a few), avoid redundancies and track what matters.  There is no-one-size-fits-all solution - everyone runs their business differently.  #Bigger's not better - RealtyShares closed with $900M in committed capital for real estate development deals." 
  • "FUNDAMENTALS of the CRE Industry have not changed - relationships, knowledge and access to deals are still paramount to success.   The real #disruption in #technology is one that takes a wide approach by now aggregating useful #data while providing the richest experiences thru vertically-integrated data exchanges and the best functionality from individual CRE #platforms. This will be essential to any serious real estate professional, and the ability to communicate that experience and environment to your end user will be competitive advantage."

Michael Beckerman (29 years - public relations, real estate).  "2018 MID-YEAR CRETECH REPORT [latest to date - see lists and links] (#2019predictions #Analysis #Technology #Business #PropTech #Research #Expansion #SmallBusiness; continued; edited - for
  • NOTABLE #TRANSACTIONS - more than $3B #raised, first half; great interest; impact on CRE.  
  • #COWORKING AND #SPACE UTILIZATION, CONCEPTS - the largest and most active funding raising continues in coworking and space sharing, to continue and increase via #landlords and other real estate #operators.
  • SOME GATHER #DATA, OTHERS CREATE #AI - big/new trend is several #startups focused on collecting public data and providing it to users to perform due diligence or prospect for new deals. [Reonomy noted; but see new announcements here.]  Beyond them, some are attempting to use AI to predict what will happen next.
  • RESIDENTIAL AND CONSTRUCTION CONTINUE TO SEE #INVESTMENT:  With investment activity in areas like coworking, data aggregation and artificial intelligence, continuing to strengthen, investors remain very active in more establish verticals such as residential real estate and construction.

Todd Tretsky (25 years - real estate finance) noted "TRENDS SHAPING #CRE CONSTRUCTION, 2019 - the same glacial movements as in previous years?  Skilled #labor shortage continues despite increased educational and outreach programs.  #Automation, #drones and comprehensive #technology solutions infiltrate projects one at a time.  #OffsiteBuilding is gaining, and mitigating #risk is still possibly the most important.  So we pay more attention to the nuances of these #BigTrends."  (#2019predictions #AI #Business #Data #PropTech #Research #Expansion #Investment #Startup; edited - for
  • "#TECHNOLOGY SUPPLEMENTING WORKERS. Rather than fearing #automation, think about where automation can take the industry, creating more meaningful work, and as long as 100% of the task cannot be automated, there will still be a need for #HumanLabor. #AI and #MachineLearning will be broadly applied in construction to reduce risk and improve project #performance across the project lifecycle.
  • #DESIGNBUILD'S #MasterBuilder approach accounts for nearly half of all US nonresidential spending, based based on results: less #costs, reduced #timelines and clearest contractual #remedies."
  • "CUTTING #WASTE.  The construction industry can improve efficiency and productivity, which are second to last among all US #sectors:  use prefabricated materials, just-in-time deliveries, reduce overlapping #workflow tasks, early #planning, frequent conversations with stakeholders, and lean tools / #strategies.
  • "#DRONES - use in construction surged 239% YOY (fastest growth of any sector):  access swaths of #data with relatively-affordable, off-the-shelf #models or third-party #services, using software and equipment for with #mapping, #volumetrics analysis, #thermal imaging, as well as seeing the overlooked.  The #FAA is slowly breaking down #barriers.  [More #apps to come.]
  • "HIGH-SPEED #RAIL PROJECTS - slow growth in the US, but a few privately-financed projects may lead the way in 2019, in which developers are able to use the best technology for the project, even if that means sourcing it and the accompanying equipment from a foreign country like Japan, a no-no when taking federal funds, such as in the $12-$15B Dallas-Houston bullet train beginning 2020, Tampa-Orlando just starting right-of-way negotiations, and several Hyperloops (
  • #GENZ IMPACT.  Attracting #Millennials (24-39 in 2019) into contruction ending.  Now it's millions of Gen Zs (<24) graduating high school to become new skilled workers:  avoiding college loans, preferring other alternatives, such as earn-as-you-learn programs and a clear path to career advancement - at a young age, with the opportunity to own a small business.  Gen Z may be able to help construction firms innovate technologically more than their Millennial predecessors could:  Skanska USA plans to provide high schoolers free CAD kits."

Commercial Real Estate and Business

Frank Kusmer (34 years - finance, M&A).  #STARTUP #DEBT #FINANCING.  One of the biggest challenges facing a new business is securing adequate financing.  (#CRE #Technology #Business #Data #Research #Expansion #Investment #SmallBusiness #Startup; edited - 
  • "THE #BUSINESSPLAN is an especially critical communication tool to convince #lenders and #investors that the venture is in good hands and will be #successful, with clarity of thought, sufficient detail anticipating questions, and show appropriate #market knowledge and experience [with superior #ManagementTeam and #Advisors].  
  • "#Entrepreneurs often FOCUS TOO MUCH ON THE EXCITING BUSINESS OPPORTUNITY, but provide inadequate detail on a realistic financial story:  #capital requirements, sources and #UseOfFunds, pro-forma financial #projections, start-up #budget, sunk #costs, equipment costs, available collateral and supporting #DOCUMENTATION such as #appraisals and independent market #analysis."
  • "SOURCING #EQUITY. Many debt #lenders are not interested in borrowers without equity in their project: available #cash or #SunkCosts, 10-20% of the total #capital requirement. Equity #Sources: Cash/Assets (#RealEstate, equipment; Industry experts (with cash to invest); Friends & family (investors); #Angels and #VentureCapital; Government (grants/subsidies, not easy)."
  • "DEBT LENDER WANTS.  Even when well-prepared, it IS work to find a source comfortable lending to new #ventures and have reasonables #terms and #rates.  Options ARE available for affordable debt financing of many types of projects, and are looking for:  Business #viability (stellar #BusinessPlan); Personal #NetWorth (strength and #guarantee); #Background (EACH owner, re successful business #management); Ownership #transparency (killers - lack of openness, vague responses or misleading information); #Collateral available (assets)."
  • "SOURCING - early, flexible, agents:  APPROACH EARLY – start looking as soon as the business plan is nearing completion and #equity has been secured.  [A 1-2 page #overview is a great entrĂ© - use the CONTENT in the suggested format at].   STAY FLEXIBLE – be realistic and flexible re total lending costs.  Let the lenders propose their terms and then evaluate them [then negotiate]. Learn then adjust your business plan and financing cost assumptions.  GOOD #AGENTS that already have strong relationships with high-quality and hard-to-find finance sources. Knowing lender intake criteria up front help them match projects to sources that may be interested even if the local bank rejects your project."

Don Catalano (30 years - real estate). #CRE RENT ESCALATIONS - Many commercial #leases include some type of rent escalation clause, which allows the #landlord to increase the rate of your rent either on a specific timeline or in response to a specific #trigger. Some rent escalation clauses are more favorable to tenants than others.  After signing, keep an eye on rent escalation.  Have a commercial real estate #attorney audit your lease. There are a number of types of rent escalation clauses used in commercial real estate lease agreements." (#Analysis #Business #Data #Research #Expansion #Investment #Startup; edited - for
  • #STEPPED - pre-determined amount periodically, such as $1 per square footage per year - beneficial for tenants to know #costs in advance.
  • #INDEXED - usually tied to Consumer Price Index released by the US Bureau of Labor Statistics. - very unpredictable and can lead to dramatic increases.
  • #TAX #PASSTHROUGH - based on #landlord's property taxes during the term of your lease, prorated by your occupancy.  
  • Direct #OPERATINGCOST PASSTHROUGH - such as heating, electricity, maintenance and security - make sue it clearly spells out what is / isn't an operating cost."

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