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In this episode of Deconstructed, we speak with James Scott, the lead researcher at MIT Real Estate Innovation Lab. James is an expert in real estate technology, also known as prop tech, which helps individuals and companies research, buy, sell, and manage real estate.
James sits down with us to share his expertise on various topics, including how Covid-19 has opened people’s eyes up to real estate technology and what its adoption over the past year looks like in practice. He also tells us his story of how he joined MIT Real Estate Innovation Lab and talks us through the ins and outs of the company.
Finally, James discusses the future of real estate technology, especially relating to the way we work.
What Is MIT Real Estate Innovation Lab?
MIT REIL is a research and development laboratory that measures and assesses the financial and economic performance of innovation in real estate, design, and planning.
James ended up working at the MIT Lab some years ago, when he completed a Master’s in real estate development on finance. By meeting the right people, he became the first employee of the MIT Lab. And since then, the company has gone from strength to strength.
The business works with different industry partners to delve into either large-scale projects, or ones that the team would like to work on themselves. Being MIT, the company uses a lot of computational science and data.
MIT Real Estate Innovation Lab works with partners who see real value in the company and its research, and want to be part of new, innovative, and cutting-edge ideas. Often, partners give the brand a specific project and task to research. Through these ideas, the company has a glimpse of the developments and future of real estate tech, and how this can impact the built environment.
James champions the team at the lab as many people working within the company have first-hand experience with various areas of real estate tech. This is primarily because the brand is part of the center of real estate at MIT. Team members have expertise in construction, design, investment, and so much more. This means they have a strong understanding of real estate from a practical, authentic level that can be challenging to find elsewhere.
While those from solely academic backgrounds often come up with fantastic ideas and research, James claims there’s typically a lack of understanding of the marketplace without first-hand experience on the ground. James praises the success of MIT REIL to the team behind the company, who have a genuine and practical application and understanding of the research and data they curate.
The Innovation of Real Estate Technology
Throughout the interview, James speaks a lot about the innovation and development of real estate technology. He notes how much of the growth of real estate tech is due to the effects of Covid-19, with many people having to work at home rather than in the office.
James mentions his surprise at the rapid growth and transformation of real estate tech over the past year or so, noting that the word ‘adoption’ comes to mind immediately.
It’s argued that, previously, real estate in the technology sector has been slightly behind most other asset classes. James notes that there hasn’t been much adoption of high-quality prop tech over the last few years in a way he’s hoped, but the pandemic has changed this. He claims that this is because many people have the outlook of ‘If it ain’t broke, why fix it?’, leaving efficient and helpful real estate technologies going unused for many years.
Due to changes in the way people live and work resulting from Covid-19, things have transformed. Since the middle of summer last year, the actual unity investment has risen to a whole new level.
One example of adoption James gives is the digital twin, a project that the MIT REIL is currently working on. A digital twin refers to the digital representation of a physical asset, process, or system. This digital twin allows predictive modeling to provide proactive modifications for assets. This process can deliver greater strategic value for the real estate industry.
The digital twin allows people to run scenarios and forecast different situations within a particular building, be that the ad space optimization, energy usage, or even simple aspects like where a fire drill would fit in. The digital twin provides an understanding of the highest and best uses of all the space within a building.
The Future of Real Estate
James wraps up the conversation by discussing the future of real estate.
Without implementing certain technologies, it wouldn’t have been possible to quickly transfer people out of cities to work from home. Today, more and more people are beginning to realize how promising real estate tech can be.
The big question James poses now is: Will people return to what we once knew, working every day in the office? Or will more organizations opt for the work-at-home initiative?
James believes that there will be some type of hybrid or flexible office space that will use real estate technologies. He thinks we’ll notice the main developments of this type of office space within the next 12 to 36 months. He predicts that he, himself, will likely set foot back into the office around September. By then, most organizations will have made the call as to whether they’re sticking to the work-from-home initiative, or whether they’ll be primarily based in the office.
While removing the office space is an easy cost to cut, the reality is that there will likely be a blend of working at home and the office. As James states, how it all pans out will be more of the exciting plays in real estate, which we’ll observe in the years to come.
To hear more about James’ expertise and views on real estate technology and more, tune into this episode.