Technology is changing the real estate industry. I categorize these new developments in the space along two axes: access vs ownership and commercial vs residential.
We saw a first wave of change in residential real estate, focusing on creating (Airbnb) or fragmenting (HotelTonight, Common) access. The commercial market followed with WeWork as its biggest player.
In a second wave we’re seeing innovation in residential ownership. Companies like Point, Knock and OpenDoor are shaking things up.
The focus in commercial real estate is less about access vs ownership, compared to residential real estate, and more about fragmenting access across verticals. Let’s unpack that:
- The new companies that are emerging in commercial real estate are fragmenting the lease as we know it. From 5 year leases, down to 30min slots.
- There are many more types of commercial real estate, than there are types of residential real estate. Each is large within its own vertical.
The second point is an important one. Residential real estate focuses on one main function: providing shelter for humans. Commercial real estate has many verticals.
- Offices: Breather, WeWork
- Restaurants: Cloudkitchens
- Retail: Bulletin
- Hotels: Airbnb
- Warehousing: WDP (European AWS of warehouses)
- Medical: ?
- Storage: Clutter, MakeSpace
- Elderly care: Irene
In each of these verticals, I believe there’s room for a big player to emerge.