The real estate industry is well-suited to benefit from the efficiencies of technology. That was the message Gambhir Kaushek of Morgan Stanley Realty s Real Estate Private Equity Group had for the Counselors of Real Estate their annual meeting Nov. 5 - 8 in San Francisco. The real estate industry is highly fragmented, Kaushek said. And there is considerable randomness in transactions because there is no concentration of buyers and sellers. With the inefficiencies in the supply chain, there is great opportunity for one company to dominate, he said.
Real estate is big business in the United States.
Internet penetration of the real estate business and just about every other has been rapid, he said. While the emphasis is still primarily on business to business known in shorthand as B2B the volume of new technological ideas has peaked, and now we need to use what we have to prove out business plans. It reduces procurement costs, it enhances communication interaction with customers, and it creates both new revenue streams and new business opportunities. While real estate could benefit greatly from technology, financing development of that technology from now on will be different from the recent past, he said. Real estate technology companies are still in their early stages, and require significant capital.