From the Metaverse to Gen Z, What 2022 Will Mean for the Real Estate Sector
February 1, 2022
Last year broke real estate tech records with nearly $21 billion in global proptech venture capital investments as technology innovations continued to disrupt conventional real estate asset classes. This is only the start: Proptech represents a fraction of the United States’ multitrillion-dollar real estate industry and the built world is poised for tremendous transformation throughout the decade.
This year will see a confluence between desires for normalcy, real estate stakeholders embracing technology, and Web 3.0’s opportunities for technology entrepreneurs. Here are the key areas I expect will see increased activity this year.
Built world meets metaverse
Beyond initial hype over digital land sales, true opportunity lies in bridging the built world with the metaverse’s enhanced digital world.
The possibilities for real estate here are limitless: Think luxury retail brands creating new sales channels and rethinking rewards programs, hotel owners and operators building digital experiences for guests that complement the real one, residential brokers making property tours more conversational. That’s just the tip of the iceberg.
Sustainability goes mainstream
The real estate industry’s stats are dirty: It accounts for 50 percent of global energy consumption, 40 percent of global raw material consumption, and emits 40 percent of greenhouse emissions globally.
Climate change’s alarming acceleration means the industry must embrace sustainable solutions.
Two distinct tech solutions can offset buildings’ carbon imprint. The first is tech that reduces operating emissions, like heating and cooling. The second is tech that reduces embedded emissions, like construction materials.
As capital sources link costs of capital to how green assets are, measuring a building’s emissions in a standardized way across the industry and reporting those emissions in financial statements and disclosures will be critical.
Accountability and further innovation are contingent on implementing this strong foundation.
Building for Gen Z
Gen Z will comprise 30 percent of the workforce by 2023; their preferences will be a dominant economic force through the decade. This generation feels most like “themselves” online versus offline, is comfortable shopping through mobile, prefers short-form videos over images, and favors brands aligned with their values.
How will this impact real estate? For one, Gen Z will search and find apartments or homes through new mediums, like short-form mobile videos. Their affinity for community and brand consciousness will impact how multifamily operators and retail owners manage and curate spaces. As one of the most geographically mobile demographics in history, Gen Z will continue to revisit the definition of work and the future of physical offices.
Envisioning the future of neighborhoods
Advancements in tech are sure to impact mixed-use communities and reduce land-use inefficiencies in neighborhoods. Shifts in mobility patterns will impact the conceptualization, design and execution of large-scale real estate developments.
New neighborhoods will likely account for shifts in how we live, eat, shop and commute, with ghost kitchens, dedicated space for dark stores, self-storage in apartment complexes, or quasi-office spaces.
There’s also traction for the emergence of new micro cities, powered by advancements in robotic construction technology and predicated by the belief that it is easier to build anew than make retrospective fixes to existing infrastructure. Against 2021’s backdrop of record home price appreciation, this area assumes increased importance for our industry this year.
As an industry, real estate has been particularly impacted by the pandemic. In turn, we’ve seen tremendous urgency to adopt technology across the board. Despite 2021’s acceleration of real estate technology, we expect 2022 to eclipse this, with advancements in the metaverse, sustainable mindsets, the dominance of Gen Z, and new neighborhoods dominating the real estate technology landscape.
Source: From The Metaverse To Gen Z, What 2022 Will Mean For The Real Estate Sector Crunchbase (January 26, 2022) Kunal Lunawat