PropTech 2023 Glossary
The 2020s have been – loudly – calling for innovation in real estate.
While finance, leisure and transportation sectors have experienced milestone-like, heavily-publicized technological advancements; the real estate segment has mostly been undergoing its own transformative journey slowly and silently.
In the meantime, the PropTech sector was born, encompassing a multitude of startups and novel technologies that have emerged in response to decades-long inefficiencies and outdated practices within the real estate domain.
The PropTech ecosystem now is booming and you might be missing out on the recent industry terminology that it bears, as there are a lot of new, up-and-coming PropTech terms flying out there. Read on for a handy guide to the vocabulary that is relevant to PropTech in 2023.
PROPTECH IN 2023
PropTech is the convergence of real estate and technology, using innovative solutions to enhance various aspects of the property industry, including buying, selling, renting, managing, and investing in properties.
With the increasing demand for more efficient and customer-centric real estate solutions, PropTech in 2020s has evolved to include terms such as artificial intelligence, blockchain, big data, 5G, green technologies, Internet of Things (IoT), and more.
These terms find their roadmap into property management and tenant experience platforms, smart home systems, marketplaces, and investment platforms, creating a more connected and data-driven real estate ecosystem.
Definition: The fifth-generation wireless technology offers faster internet speeds and lower latency, facilitating the seamless connection of devices and applications in real estate.
A workplace design that focuses on offering multiple different spatial layouts for various tasksand activity levels. For instance, some private rooms, some open-plan space, and some lounge-style seating.
Definition: Utilizing advanced algorithms and machine learning techniques to analyze and interpret real estate data. Indeed, you run to something like this when you google AI usage in real estate. As a result, real estate teams benefit from predictive insights, personalized recommendations, and streamlined processes for better decision-making and enhanced user experiences. One concrete example is the independent analysis of historical sales data and current market trends for property valuation – yes, that basically means the whole thing will inevitably be transformed.
But AI offers vast usage beyond. Take property management as an example – AI can help track rent payments, monitor property maintenance requests, and facilitate communication between property managers and tenants, where a property operator can introduce an AI-driven live assistant to their tenant app to help tenants find answers to their common questions.
The process of monetizing each individual part of a property. For instance, using Airbnb to rent out apartments that have not been leased yet.
Augmented reality (AR)
Definition: Technology that overlays digital information, such as property details or virtual furnishings, onto the real-world environment through mobile devices or specialized glasses.
Definition: The vast volume of real estate-related information collected from various sources, which is then analyzed and leveraged to make data-driven decisions, optimize property performance, and improve overall efficiency in the industry. Naturally, this is where AI is naturally stepping in.
Example: Property operators can use big data to analyze how a certain feature of their building is performing – for example, how tenants use building amenities and services – to identify areas where demand is low or high and adjust their strategies accordingly.
Definition: A decentralized ledger technology that provides a platform for recording and verifying real estate transactions and property ownership, reducing intermediaries in the industry.
Building Automation System (BAS)
Definition: An intelligent system that connects hardware and software to control heating, ventilation, and air conditioning (HVAC), lighting, security, and other systems on a single platform.
Building Information Modeling (BIM)
Definition: Processes that allow for the representation of the physical and digital systems of a property.
Definition: Construction Tech. Similar to PropTech but with a focus on the execution and support of physical build projects.
Definition: A virtual representation of the physical property, combining data from various sources to create a real-time simulation.
Example: Property managers use a digital twin of a commercial building to monitor energy consumption, occupancy levels, and maintenance requirements, optimizing operational efficiency.
Green Building Technologies
Definition: Sustainable practices, materials, and systems aimed at reducing a building's environmental impact, optimizing energy efficiency, and promoting eco-friendly practices within the real estate industry.
Internet of Things (IoT)
Definition: The network of interconnected devices embedded with sensors and software, allowing them to collect and exchange data. In PropTech, IoT devices are often used for smart home automation and security.
Definition: Smart and integrated structures equipped with various technologies like automation systems and sensors, enabling real-time data collection, analysis, and user engagement to enhance the overall building efficiency, experience, and functionality.
Definition: A product designed with components that can be easily added, removed, or replaced without affecting the system's overall functionality. This modularity allows for flexibility, scalability, and easy customization of the product to suit different needs and requirements over time.
Definition: Using historical data and machine learning algorithms to make predictions about future trends, events, or behavior.
Example: Real estate investors utilize predictive analytics to assess the potential ROI of a property based on factors such as location, market trends, and economic indicators.
Definition: Self-executing contracts with the terms of the agreement directly written into code. They automatically execute when certain predefined conditions are met.
Example: The rental agreement is coded as a smart contract, ensuring that the tenant's security deposit is automatically refunded within three business days after the property is vacated and inspected.
Private, networked, locked boxes that package deliveries or share items can be stowed inside for later retrieval by a tenant with a unique code, card or an app.
The set of technologies used for a project, most typically in regards to web or software development. Read about how to choose your own property tech stack here.
The day to day experience of working or living in a given property. Through planning, tech and design, property owners can offer a better experience to their occupants.
The process of converting real-world assets, such as properties, into digital tokens on a blockchain. These tokens represent ownership and can be easily traded or invested in.
Example: Through tokenization, investors can now buy fractional ownership of prime real estate properties, which were previously out of their financial reach.
User experience (UX)
The overall satisfaction and engagement of individuals interacting with digital tools, applications, or services within the real estate industry, focusing on ease of use, accessibility, efficiency, and the quality of interactions between users and technology.
Definition: VR is entirely digital imagery displayed through a headset or network of projectors. It can also include sound and tactile feedback, as well.
Once you've identified what your building needs, you're ready to go on to the next phase – which is connecting all the relevant terms together.
The ideal solution is to pick a system that can integrate with the greatest components available. This means you'll never have to sacrifice functionality, and you'll be able to access all of your chosen solutions through a single end-to-end system.