For the multifamily housing industry, investing in PropTech seems like a viable hedge against disruption.
Real Estate Technology Ventures (RETV), the first industry-backed, early-stage venture fund bridging the gap between real estate tech companies and multifamily operators has gained a lot of traction—$108 million in support for its Fund I from limited partner investors to be exact.
Many multifamily operators are buying into PropTech with hopes to use early access to this technology as leverage amongst competition, as well as to manage the risk of implementing uncertain solutions throughout their communities.
"It's a safety in numbers sort of thing," says John Helm, the former Marcus & Millichap Chief Financial Officer turned entrepreneur who successfully piloted both AllApartments/Springstreet and MyNewPlace.
"The pace of technology is speeding up, innovation is speeding up, and the mainstream VCs in Silicon Valley see real estate as the last big, wide-open opportunity for investments. A lot of capital is flowing into real estate technology whether the industry participates or not, and we think it is much better for them to have a horse in the race."
Fund I gives limited partners (LPs) the opportunity to be passive investors and learn about emerging tech. They can also test new technologies not yet available to the general market—and minus major pricing discounts—to gain an advantage to solutions that spread throughout the apartment industry.