Should we be snapping up land in the metaverse? Splashing out on virtual real estate? Should we jump onto the next big thing for fear of missing out? Or should the real estate sector be more skeptical about technology?<\/p>\n\n\n\n
These were some of the questions Yardi\u2019s Bernie Devine and JLL\u2019s Jordan Kostelac explored in the latest instalment of the Yardi Proptech Insights series.<\/p>\n\n\n\n
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As JLL\u2019s director for proptech in the Asia Pacific, Kostelac is focused on turning one of the world\u2019s biggest real estate agencies into a technology company that specialises in real estate.<\/p>\n\n\n\n
Kostelac\u2019s job is to \u201cseparate the wheat from the chaff\u201d to uncover the technological solutions that will improve efficiencies, enhance human experiences and create new value.<\/p>\n\n\n\n
Technology\u2019s main goal is disintermediation or, as Kostelac says, \u201cto get rid of the middleman.\u201d But JLL has a 250-year history as an intermediary that strikes deals and supports operations, Devine noted.<\/p>\n\n\n\n
\u201cTo survive, agencies need to move to a substantially a tech-driven platform where the human touch that agencies bring is amplified, and delivered even better, even smoother and even faster.\u201d But does that mean JLL will be building software to sell? Creating the software to support better internal processes? Or something else entirely?<\/p>\n\n\n\n
\u201cAll of the above \u2013 but none of them yet,\u201d was Kostelac\u2019s response. JLL is investing in core technologies to improve workflows and deliver efficiencies across the business. There is no replacing a good broker, the pair agreed, but technology does allow brokers to automate tedious parts of their job so they can focus on relationship building.<\/p>\n\n\n\n
JLL is \u201cfighting over the trophy fish\u201d of premium and A-grade leases. But these only represent a fraction of the market and in the hybrid world of work, \u201cA-grade real estate isn\u2019t the only real estate that will matter,\u201d Kostelac said. Flexibility will drive demand for lower grade stock so businesses can distribute their networks and create authentic experiences. \u201cIt\u2019s more than CBD concentration in the future.\u201d A bigger market requires better access to data, Devine observed.<\/p>\n\n\n\n
The conversation turned to the metaverse and the challenge of separating overstatements and obfuscation from real estate reality.<\/p>\n\n\n\n
\u201cThe idea that buying virtual real estate now is like buying real estate in Manhattan 250 years ago is just crazy,\u201d Kostelac laughed. But \u201cFOMO \u2013 the fear of missing out \u2013 eats due diligence for breakfast.\u201d<\/p>\n\n\n\n
The \u2019fake it until you make it\u2019 mindset is embedded in Silicon Valley culture and \u201cthere has to be some science fiction otherwise there\u2019s stagnation,\u201d Kostelac added. But now the metaverse is emerging as the \u2018next big thing,\u2019 Devine noted.<\/p>\n\n\n\n
\u201cBlockchain and smart contracts and virtual real estate\u2026 I’m still a bricks and mortar guy, because you can\u2019t copy and paste Times Square ..The price of real estate is driven by scarcity. But virtual real estate has unlimited supply.\u201d<\/p>\n\n\n\n
Kostelac pointed to Hong Kong and Sydney \u2013 where he and Devine were located \u2013 as two illustrations of why physical real estate has value. These cities boast two of the deepest harbours in the world. We can\u2019t \u201cprogram\u201d 39 billion years of evolution into a metaverse. But in the metaverse, \u201cassumed scarcity can simply be overwritten by a single line of code.\u201d<\/p>\n\n\n\n
\u201cWe are looking at threats where they aren\u2019t there. And opportunities where they aren’t as well,\u201d Kostelac noted. But the stakes aren\u2019t just economic \u2013 we have the looming existential threat of climate change as a reality check.<\/p>\n\n\n\n
What is the solution for a sector susceptible to chasing hype, Devine asked? \u201cIt’s very simple. Show me the evidence,\u201d Kostelac concluded.<\/p>\n\n\n\n
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