Smart Cities: Technological Change in Real Estate
“Smart Cities” is becoming more than a buzz phrase—it’s a major industry that will eventually have major implications for the real estate market. In fact, Frost & Sullivan predicts Smart Cities—cities that integrate an array of technological solutions to manage a city’s information and transportation systems, utilities, schools, hospitals and other community services—could be a $1.5 trillion market by 2020. This, according to experts participating in the fifth annual University of Miami Real Estate Impact Conference, hosted by the School of Business Administration and the School of Architecture in February 2016.
During a panel session called “Smart Cities: Technological Change in Real Estate,” experts explored how big data, disruptive technologies, and the application of new technologies is opening up new frontiers in cities, real estate and place making.
Rodolphe el-Khoury, dean of the School of Architecture, moderated the panel, which featured: Shaun Abrahamson, CEO and co-founder of Urban.Us Public Benefit Corporation; Jordi Botifoll, president of Cisco LatAm and senior vice president of Cisco; Jeff Frieden, executive chairman of Ten-X (formerly Auction.com); and Patricia McCarney, president and CEO of World Council on City Data and director of the Global Cities Institute at the University of Toronto.
“With Smart Cities, we are talking about a strategy that changes people’s lives and increases the quality of living,” said Botifoll. “When we talk about digitizing cities with the Internet of Everything, we think this is a way to use business and technology architecture to do new things.”
The Internet of Everything, more commonly known as the Internet of Things, is the networking of physical objects with sensors that allow those objects to exchange data. The Internet of Things makes possible smart homes, intelligent transportation and smart cities.
The World Council on City Data started working with cities around the world in 2006 to standardize data, and issued its first standard in 2014. The organization is implementing ISO 37120 Sustainable Development of Communities: Indicators for City Services and Quality of Life and has developed the first certification system and the Global Cities Registry.
“This standard has been tested in more than 250 cities worldwide,” said McCarney, noting that it establishes definitions and methodologies for a set of indicators to steer and measure the performance of city services and quality of life. “The standard includes a set of 100 indicators in 17 themes that measure a city’s social, economic, and environmental performance.”
Beyond connecting devices and infrastructure, data can also connect the dots on deals. Ten-X wants to empower the commercial real estate ecosystem with data that helps drive efficient dealmaking. “If you give buyers more information, you de-risk the real estate transaction and they pay more,” he says. “And sellers should know everything about their buyers.”
The future looks high-tech, both in cities, in developments, and in how deals are transacted. And that depends on new companies that can help drive the Smart Cities concept forward. That’s where Urban.Us Public Benefit Corporation comes in. The company helps startups connect with a community of over 800 investors, companies, cities and experts who want to help startups solve city problems.
“We are trying to figure out who are the companies that five or 10 years out will define what cities look like,” said Abrahamson, who heads the firm’s venture fund. “We are tracking set of 400 company that are private, early stage and growing at a decent rate. What’s the state of urban tech? A lot of people think about smart cities in terms of things governments buy. That’s a tiny percent.”
Urban.US’s goal is to fund and support high potential seed state startups that have the potential to positively impact 100 cities within five years. Areas of focus include elastic housing that can be built faster and less expensively, editable roads that make room for bike lanes, extreme water solutions that ease the strain on water resources, and law enforcement robots.
“The idea that you can rethink how we move around—or how we move stuff around—is a huge focus for venture capitalists at the moment,” Abrahamson said. “There’s a massive amount of investment in this sector. The last areas of focus is the built environment, which is real estate.”