The Top 3 Corporate Innovation Models in Real Estate
How can real estate organizations remain competitive amongst peers, increase financial performance, while future-proofing their business?
Corporate innovation in real estate is becoming more popular in the age of technology. In the wake of the global pandemic, institutional and large family offices from owner-operators to brokerage firms have implemented or begun exploring the implementation of technology-driven solutions to improve sales, leasing, and management across the greater real estate ecosystem.
In its most fundamental form, venture capital has been a catalyst for innovation within the real estate industry. As a result, CIOs, CTOs, and heads of technology and innovation are being tasked to manage corporate tech R&D, innovation, and perhaps even invest in new technologies to position their company for current and future success.
However, unlike venture capital, real estate has a shorter runway, with a near-immediate financial impact. As a result, the shorter runway puts heads of technology and innovation in a position of investing in technology that many argue has short term benefits, but may not serve companies in the long term of future-proofing their business. While the most important aspect of adoption for real estate organizations is the focus on return on investment and/or net operating income, the duality between the two may cause distribution from within organizations, resulting in a verbose-process, failed implementation, or even worse, financial disruption.
Here are the top 3 ways real estate companies can successfully future proof their business in the age of innovation.
Some of the world’s leading real estate organizations have adopted long term strategies to future proof their business. Below are 3 key strategies with examples of how you can future proof your business while improving financial performance.
#1 — Leadership Lead Innovation Teams
In order to set your business up for success, leadership must be involved. Some companies build internal innovation teams and these teams are dedicated to pursuing, deploying, and optimizing value-driven corporate innovation strategies. Some of their strategies include digital leasing, flexible space solutions, tenant engagement, sustainability, energy, health & wellness, and others.
The corporate innovation model allows real estate organizations to maintain a steady pulse on innovation and their business. Additionally, it keeps teams more aligned with corporate innovation goals and objectives.
#2 — Startup-Corporate Partnerships
Startup-corporate partnerships may offer the greatest opportunity for corporate innovation for businesses. This type of collaboration allows corporate leaders in real estate to work hand-in-hand with industry-leading startups to address business challenges and objectives within an organization.
The benefit to real estate organizations is that startups are leaner, faster, and can dramatically enhance or shift business models. This allows businesses to speed up their innovation cycle and access key intelligence around income-producing or expense reducing technologies.
#3 — Corporate Accelerators & Investments
Some real estate organizations own and operate corporate accelerators designed to solve their own business challenges and objectives. An accelerator is a cohort-based program that includes mentorship and educational components and culminates in a public pitch event or demo day. Similar to a startup-corporate partnership, the benefits for these corporations is that they can find and work with startups that tie directly to what they need.
Investments in real estate technology is sometimes the easiest ways to fuel corporate innovation. In this model, businesses simply investments in the startup for an equity stake in the company. The added benefit to a corporate partnership is the equity investment and future gains.
Achieving Corporate Innovation Success
These three results-driven corporate innovation models have helped many organizations around the world increase their revenue while future-proofing their business. Like any major business decision, it’s important to properly vet the corporate innovation model and determine the best model that aligns with your business. These are not one-size-fits-all business models and finding the right solution will take time, energy, effort, and patience.
