Offices | Currently Browsing: USA
back Button
Podcast: The Value of CRE Tech - Structure Tone
In an age where landlords are more like hoteliers, how can commercial real estate technology enhance the tenant experience? On this episode, join Jonathan Schultz, an early-stage seed investor and thought leader in the CRE tech space, for a behind-the-scenes chat about the evolution of technology, opportunities for innovation within the AEC industry, and embracing change.
34768
post-template-default,single,single-post,postid-34768,single-format-standard,mkd-core-1.0.2,ajax_fade,page_not_loaded,,onyx child-child-ver-1.0.0,onyx-ver-1.4.1, vertical_menu_with_scroll,smooth_scroll,side_menu_slide_with_content,width_470,wpb-js-composer js-comp-ver-4.12,vc_responsive
 

Podcast: The Value of CRE Tech

In an age where landlords are more like hoteliers, how can commercial real estate technology enhance the tenant experience? On this episode, join Jonathan Schultz, an early-stage seed investor and thought leader in the CRE tech space, for a behind-the-scenes chat about the evolution of technology, opportunities for innovation within the AEC industry, and embracing change.

 

The Value of CRE Tech Transcript

STO Building Conversations

Ep. 7: The Value of CRE Tech

Narrator:

Welcome to Building Conversations, a construction podcast powered by the STO Building Group. On today’s episode, Christie Mullen, a member of STO’s business development team, will be talking all things CRE tech with Jonathan Schultz, cofounder of Onyx Equities and a thought leader in the commercial real estate technology space.

Christie Mullen:

All right, so let’s get started. So I’m Christie Mullen, I’m hosting today, and I’m here with Jonathan Schultz, the cofounder of Onyx Equities and an early-stage seed investor in various CRE technology groups. Thank you for joining us. And we’re here in Bell Works, which I think could potentially be the most appropriate place that we could be hosting today. So Jonathan, why don’t you go ahead and tell us about yourself. Tell us how you got involved, both maybe in real estate as well as technology.

Jonathan Schultz:

Well, thanks for having me. This is fun. I appreciate you coming to my office and yes, Bell Works is the unbelievable dream that came true. So, uh, it’s nice to have a place here and you know, I’ve been in real estate now, Oh my God, 30 years. Uh, and I’ve always loved it because it had a creative aspect to it. Uh, I also told myself when I got into the work world that I never was going to sit at a desk for more than an hour. So real estate allowed me to do that. It allowed me to, you know, learn about other businesses. Uh, I’ve always liked to be helpful in what I do, and have an impact and, you know, having all these different businesses and ability to learn about other things in what I do every day was always fun for me. And real estate is a tangible asset that, you know, you can see, feel and touch it. So it always was fun to be involved in. And with technology, I’ve always been, I guess sort of an addict. Uh, you know, even when the first cell phone came out, and I’m older than you guys, where you had to carry it on your shoulder cause it was this big power pack that needed to, you know, for the battery. I would do that. And, you know, I had a Palm Pilot. Like I, I always had what was coming out because I always was so intrigued about becoming more efficient or just all the new fun things that were available. And then as real estate, you know, sort of came into the intersection for me with technology was when I started out my brokerage company way back when in the early 90s, CoStar just became, and CoStar allowed me as an entrepreneur to have a brokerage company and have it exist because all the other companies had millions of dollars to other people for data and research information then was the secret sauce. Today you can just get it anywhere, right? So CoStar democratized how I could start something that I couldn’t before it existed. And I have no investment in CoStar. Uh, I’ve, you know, so it really was something that allowed me to do something that I wouldn’t have been if technology wasn’t at play. Right.

Christie Mullen:

And they had no competitors, especially back then.

Jonathan Schultz:

No, so I’ve always tried to use it in a way to get myself somewhere where I didn’t have the amount of resources that other people did. And technology allows you to do that in many ways, some useful in some completely not useful. So you learn along the way. And uh, that’s how I sort of intersected my life with both.

Christie Mullen:

And I know for you, technology’s not only just something that’s useful, as you were kind of saying, it’s a passion and you have adopted it yourself, right? In your own personal life, you have a technology blog, I know you have a lot of LinkedIn videos kind of trying to help those in the workplace do better essentially. So you’ve really taken it on as like a personal goal, right?

Jonathan Schultz:

Well, I think, you know, you always wonder like how, like why did that result happen? I just like learning and doing new things. I’m not afraid to try new things. I’m actually more excited about life when I try new things. So technology allows you to do that and you know, we’re in the fourth revolution, we really are. So over the next 10 years, I think that there’ll be more change than there was over the last 50 and we say technology – it’s not even technology anymore. It’s innovation. Every industry has technology. It’s embedded now in what we do. We’re sitting here doing something that we couldn’t do 10 years ago, right? Like even though it looks like a lot, a lot of equipment, you would need lots more to be able to achieve what we’re achieving sitting here where you came to visit me in an hour and then we can put that out to the, to the world, right? So I believe, you know, the more you’re not afraid to try new things, the more you’ll fail. But then the more you’ll know eventually how to succeed. And that’s what I’ve been trying my whole life and I’m still trying.

Christie Mullen:

I’d say you’re doing a pretty good job at it. So in terms of, as I mentioned before, you’re an early stage, seed investor, right? Various CRE technology platforms, I know Newsstand being one of them. How do you identify which technologies you think are going to be successful and therefore you’re going to put your efforts behind?

Jonathan Schultz:

I would say it’s more what I feel I can be helpful in. Uh, and you know, I get involved in stuff that I can be and have an impact on. Uh, things that I’m intrigued with that are new, but I think most of it is me feeling something that allows me to be impactful to help that technology. I mean, real estate is my core business. It’s what we do. So all these other things to me are just experiments to make what we do better, right? So the things I get involved in, I get involved in a lot of front-facing tech. So it’s stuff that really, in my mind, is helping the tenants who are really our customers, to be successful in real estate. You want your buildings filled, you want them to stay filled. So what can we do knowing that the whole world’s changing to avail the people that come to work that are already so entrenched in their personal life with technology, how can they feel that same feeling within the, you know, the four walls of our building. And I say all the time, we’re more like hoteliers than we are office building owners at this point because we’re acting and you know, doing concierge services and all different products that allow us to make the experience. And again, the experience is still an experiment of what people feel will make them want to have energy to be able to come into your buildings and stay in your buildings.

Christie Mullen:

That kind of goes along with the term that you have coined resimercial, right. So we’re trying to make our commercial spaces more like those spaces that we interact with at home. And as you just said, I mean everything at home now is technology based. You can watch anything at the drop of a hat. And so you’re saying that we need to be able to basically be able to do anything at the drop of a hat in our corporate spaces as well.

Jonathan Schultz:

Yeah. Well, I mean, Starbucks in my mind really started all this. I mean, think back, you know, you went there, you were like, wow, this is cool. We can hang out, we can meet friends, we can have meetings. Uh, it really to me was the first coworking space, uh, that came on the scene in a more, I would say a 21st century way. I mean, coworking has been around forever in different forms, but this was more of a fun, cool coworking experience. It wasn’t just the cubicles where you get a desk and a computer and your work, it was more of an environment that made you feel comfortable and happy to be in. And then obviously, as you know, that’s just expanded tremendously. And to me, coworking is not leaving. It’s going nowhere. It’s just, how will it be and what will be its best form for the future of, you know, flexibility, which is really what the gig economy and everything that we’re going through is trying to accomplish. It’s, you know, it’s the sharing economy, it’s the gig economy, all these phrases, all it’s all really doing is creating flexibility and hopefully more productivity for the wide variety of people that work at different companies into different things.

Christie Mullen:

Right. And I think we’re so used to getting everything instantaneously. I know we’ve talked about how some of these technologies, too, are making the leasing process and what can be quite cumbersome in terms of real estate – we know that some deals will take years to complete – you’re seeing those sped up even, you know, just from the interaction of technology.

Jonathan Schultz:

Oh yeah. Well it’s awareness, like marketing’s awareness, anything that you do to sell a product or services is, you know, is a brand, but how do you create the proper awareness in the right way and technology and, uh, just how we can communicate is, you know, from the platforms that are out there now, it’s just, it’s tremendous. It gives, it gives people that wouldn’t have that ability to do it, a way to do it. But now it’s a dynamic and a paradigm shift that everybody has to get used and figure out like how does that really work and what does it mean? And if you just look at other industries, you know, recently all the stock brokerage firms are now zero commissions. Like things are changing based on how we deploy all this information and insight and how the cost is being compressed because of it, actually. So, uh, you know, I don’t know if I see that in our business, but it’s just interesting to see how technology and information has created a democracy for all, which then has made the product actually more affordable, more accessible, and allow more people to do it, right? More access, which is great.

Christie Mullen:

I’m sure brokers are hoping we don’t go zero commission.

Jonathan Schultz:

Yeah. Listen, I mean, I believe that, you know, everybody plays a role and even these companies are still playing a role. And just because the trading commissions are zero doesn’t mean the services they provide aren’t going to be a value to people and they’ll pay for value. Everybody’s going to pay for value that’s necessary to do what you do, right?

Christie Mullen:

So maybe now if I can switch gears maybe a little bit, given that Structure Tone is specifically a construction company, I know that you feel like construction tech is a major opportunities zone, right? So construction can lend itself to being a bit behind in technology. So what is it about construction and the technology, like where do you see those cost savings? What is it that you think needs to be filled within the construction space by technology, where there can be success, and what a company like Structure Tone should be looking at.

Jonathan Schultz:

Every company has how they operated in the past and now we’re all looking to see how we can become more efficient in the future. And construction is hard. I mean there’s so many moving pieces, right? There’s so many changes. It’s on a site that from weather, I mean there’s so many things that can go wrong and you need a lot of people deployed to make sure that it doesn’t, right? So most people, when this all started, everybody wanted one thing that could organize all of us. One platform which other industries have, you know, if you look at the stock exchange, right? If you look at, uh, the human resources field like Workday and iCIMS who’s in this building, like these platforms are being formed to actually change industries. And a lot of the industries that were regulated, were forced to do it more. And it took a lot of time and now they’re up and running and they’re doing it.

Our industry is just behind, but now completely committed to where we’re all going for the future, which is a great thing because our industry obviously has been the last, I think to really go hyper adoption in anything. Uh, so the way I look at any of this is slowly and strategically: what do you want to fix? There’s so many people out there with different products that can fix a part of what you do, but if you don’t have everyone from on the site to the corporate office, to the people in between buying in and believing in it, it just, it’s just not going to happen fast if at all. So you know, I’m a firm believer in they call them point solutions. That’s how you get started. You go say like, what’s our biggest pain point and what can we solve over the next year? You find the right early adopters in your organization that really want to take it on and have the passion and energy and you’ve got to realize that most people are not going to want to change what they do and they’re going to fight against it because it’s scary. I mean, people don’t love to change. They get set in how they do things. And two things: one is it creates more work and everybody’s so overwhelmed on doing a good job, they don’t want anything else to take away from that, and then they’re worried like, what’s this going to do to my job? What’s this going to do to me and where I sit in a position that helps me feed my family, right? So you’ve got to realize that it’s a psychological thing as much as it’s a change thing because you want to just change something because you think it’s more efficient, right? So if you take that all into consideration, you find the right people that know how to communicate it or that will at least try it to get a nice proof of concept going and then slowly filter it. But it’s not top-down. It has to be an every one-up for me to believe that the organization actually will succeed.

Christie Mullen:

So as somebody that, you know, as a landlord and, we’re all service providers, are you looking at service providers and saying what technologies do you have? Is that an important aspect of somebody that is going to be servicing Onyx?

Jonathan Schultz:

Honestly, no. I mean like sometimes yes, sometimes no, that’s not like a, you know, an easy answer. Companies have reputations. So we’re hoping that within how they do things, they’re deploying what they need to do to do the job right. But we have enough to think about for our own stuff to worry, you know, as much about what other people are deploying now. And another thing I want to state, like the human interaction and the people is what makes business work. All these things are tools and some people use the tools better than others will use them, but I think that’s how people have to go about thinking why and what they do with like how will it make the people at your company do better, you know, and enjoy what they do in a bigger way. And sometimes that gets lost, unfortunately. So, I know it’s a long-winded answer, but I do believe that everyone that you’re doing business with is trying, it’s so early. It’s not like there’s like a checklist. If you’re not doing this or not doing this, you know, we’re not going to do business with you. So I don’t see that, at least for us, I don’t see that.

Christie Mullen:

Yeah, and in terms of cost too, I think that’s, you know, sometimes a prohibitive factor. You were saying, we’re used to doing the way that we’re doing it. Therefore we have our strategies in place. Do you think clients that are being serviced would be willing to entertain some of that cost if it is going to either speed up their job or they can learn?

Jonathan Schultz:

If you can prove that. I mean, you know, everything’s about uh, making people understand that it will work. Uh, when you look back to the supercomputer that IBM filled the room with, what was it like? It was like millions of dollars for this, this one computer. Now you buy iPhones for anywhere from $200 to $1,000 and it’s the same computing power. If you’re going to be early in anything, you’re going to have to realize you are going to be spending money that you may not be able to recapture to be better in the future. Or be the one that waits until everything’s proved out and then you’ll buy it at the market price that’s already there and you won’t have that, you know, first position move and why someone may use you more than the other and you just got to decide what is your company willing to spend in order to, to do that. And some people will take more risks than others in that. And that’s okay. It’s all the evolution.

Christie Mullen:

So, going off of spending money. I know that we have talked about 5G and how you think that is at the forefront of our future because everything is going to be, you know, streaming, everything like that. Now, how are you seeing that impacting you, in terms of are tenants asking for it yet or asking about it?

Jonathan Schultz:

I don’t think people completely understand even what it means or what is necessary to do yet. Uh, 5G, you know, it’s millimeter technology and they chose this technology that actually, in buildings, it won’t penetrate the wall and it won’t penetrate the glass. So we’re going to have to retool all of our facilities, uh, worldwide to actually utilize 5G in the way that is necessary. So I think we’re really early. Uh, I think everybody’s trying to figure it out. It will be game changing because the amount of ability you’ll have to stream at the speed you’ll be able to have will actually take away a lot of those middle processes that you do. Like, even how you use the cloud, right? Like if you don’t need to store things to then send it right, it could go that fast right away. So it’s going to be interesting to see and that’s the minutia. But the first thing that’s necessary is as owners, we need to understand how to get infrastructure ready for this.

Christie Mullen:

So are you looking into that right now in terms of taking your buildings that exist already and retrofitting them or are you thinking about specifically…

Jonathan Schultz:

Well, I personally am trying to learn as much as I can about what it all even means. And you know how it will be useful.

Christie Mullen:

Okay so a basic understanding.

Jonathan Schultz:

You know, we could all go crazy to do all this, but like what’s useful and when and how and why. And I think you need to always be asking your questions and everything that you do in any career that you’re in. It’s good to have a future of how you do things, but what is useful today and the only way you learn about what’s useful is to learn about how the technology is going to work, how it’s going to impact. And I think for me at least, I’m in the beginning of that, that process.

Christie Mullen:

And so, I think what I’m hearing overall is that technology, CRE tech, the 5G it just at the core has to make businesses run smoother, right?

Jonathan Schultz:

Well it’s always going to run less smooth before it gets smoother, but you just got, but you, it’s just you’ve got to be willing to try what you think will be better for what you have the largest pain point or what you feel you want to fix and just go slow and steady, get the right people involved and just reflect on how it’s working. Uh, and it’s really just that easy. If you want to take that approach, you can make it very overwhelming. Or you can know that life’s a marathon, not a sprint. And if you look at it that way, I think you could go and try lots of very cool things that could end up having this gigantic impact. And you may even find things that you thought didn’t need to change that can now, because you dove into the process of change, which not everybody wants to do. We’re so busy, it’s hard to pivot. It’s just hard. I mean, when you’re a busy company and you’ve been doing things a certain way for a long time, it’s, it’s hard to stop that bus or train to then insert a new car in between and then, you know, teach the rest of the people on to make that productive.

Christie Mullen:

So since you are invested in so many of these companies, is there a success story that you could share with us that you identified the problem, implemented this technology and is now kind of a success?

Jonathan Schultz:

I think they’re all successful in where they are in the evolution of what they are. A consumer technology can scale much faster throughout the world, really, right? Real estate technology has specific uses and I think a lot of the companies are really getting traction and they’re still in business and they’re still alive. So that’s a good thing. Uh, there’s companies like VTS and earlier ones that are tremendously successful and they’re a staple of how we now look at our leasing process and our collaboration with all the brokers. It’s like amazing. They have great products and services that keep all the different people within the ecosystem of generating revenue for your building apprised and they’re still progressing. Right. So I think there’s lots of those out there, uh, that were earlier, that are still in their pursuit to get to where they want to go. But the nice thing is that we have real traction with CRE tech. You know, resi-tech was a little bit ahead of us in my mind on the commercial side. And you’ve got, you know, some good traction there and I just see lots of companies that are going to have a great success story as time goes on.

Christie Mullen:

Good.

Jonathan Schultz:

Yeah, I’m so happy that our industry, CREtech.com is having their gigantic conference, it gets bigger and bigger every year. It’s two days. Uh, Michael Beckerman, who is the CEO and founder, is amazing. He created an ecosystem that allows everybody to congregate and talk about the pains and the successes that we’re having trying to achieve all this. He’s bringing owners and technology companies and VCs all together to have a real conversation so that we all can figure it out. See, this has to be done together because apart it’s going to take forever. So at the beginning, nobody knew how to really live in that world. Cause you know, everybody feels in business it’s all about competition. But if you really want to drive forward and make it work for an industry, not just what you’re doing in your own company, he created that vehicle. So things like that that’s happening is exciting and it just keeps getting bigger every year.

Christie Mullen:

So, because we are a construction company, uh, kind of something that we’ve come up against lately is having a shortage of skilled labor – aka, the carpenters, the, you know, the mill workers, those types of jobs. Those jobs that were really specialized more back in the day. But because of a rise in college and all of those things, people are choosing other careers now. Is that a hole that you feel technology might be able to fill at some point or help with?

Jonathan Schultz:

Well, I, you know, you have Millennial and Gen Z are going to be 50+ percent of the workforce. The Millennials are now 40, like, can’t believe it? We’ve been saying that word for so long as if they’re this new species coming into the world and they’re 40 now, which is awesome, right? They’ve helped us all rethink as a society and as a workforce, like how to do things differently. So technology can actually bring a cool factor to construction that maybe it doesn’t have in their minds, but I do see in other industries the more progressive you are on making that change, that’s very hard and it’s going to take time and you have sort of the clashing of the Xers and the Boomers on who’s going to come in and how you do it. I think you have a chance to maybe get more people that will want to come in because the use of the technology will create a whole new intrigue on how construction’s being done and being transformed for the future. So, as much as you need it to become more efficient, I think if the labor shortage is going to continue, you better figure out how to automate certain things that are happening through robotics, through other, through bots or other technologies so you can fill that gap anyway. So there’s two issues and they’re both really pressing, right? So, but I do believe if you are progressive and you offer all these new ways of doing things because you know the new workforce is capable of that, you know, people being born today have their phones earlier. It’s an appendage, it’s like having a third arm. So I think that’s very important for you to address as an industry. Right? How you do it, you’ll have to live and learn and figure it out. But I think it’s important.

Christie Mullen:

Absolutely. So I guess again, I’m going to pivot a little bit here. So you kind of have been a mentor to me since I have joined Structure Tone two and a half years ago. Right? This is our kind of our second cool little thing we’re doing together, we’re a bit of a dynamic duo. Who is somebody in the business that you look up to and that has been a role model for you throughout your career?

Jonathan Schultz:

It’s interesting. You know, I can’t name one person. I’ll tell you though, what I feel has given me the energy that I’ve had throughout my career is that I’ve never been afraid to go out and seek different mentors for what I’m doing at the time I’m doing it. And whenever you want to learn something new and deploy that in your life, I’ve always felt the more people I could bring around me for whatever I’m doing that are smarter and better and more sophisticated than me at it, I always knew I was going to learn from them. And I call it “hanging around the basket,” uh, and “hanging around the hoop” and it served me well. And I also mentor lots of people now, but I always say like, who else do you got? Like it better not just be me, right? Because I’m only one perspective projecting my own stuff out on what I feel has been helpful to me. So I’m all about getting as many coaches and mentors in your life as possible because I think that you’ll learn a lot.

Christie Mullen:

So I also know, in one of our first meetings, you gave me a book. So what is a book that you would recommend right now or that you have read in the past to our listeners?

Jonathan Schultz:

You know, I just downloaded it and you’ll have to Google it if you want the name right now, Brian Grazer just wrote a book on networking and relationships and the humanness of life. And I just think with all the technology and all of us staring at our phones, I mean once I put my screen time tracker on, I actually look at it so I can keep myself from going too crazy on all this stuff. But I think that the next 15 years with the speed of how everything’s going to move, we’re not getting less attached to our technology, we’re getting more attached to it. That emotional intelligence, social intelligence, the interaction of human-to-human to me is going to be a skill set that you’re going to need to know because with automation, robotics, and all the AI, and it’s really augmented intelligence at this point, the biggest thing that’ll help you is having the ability to actually interact, right? Cause a lot of the other stuff, the minutia that we really all don’t want to do will tend to slip away outside into that world. So I believe we should be focused really on how to have real great nourishing relationships with personal and your business life.

Christie Mullen:

Well, I think that’s a great way to end a technology-based podcast here, to keep in mind that at the core of everything is still making sure you’re a good person and people want to be around you, and that you want to be around other people.

Jonathan Schultz:

Yeah. It’s what makes it all fun, right, so.

Christie Mullen:

Right. Awesome. Well thanks for being here today for chatting with us.

Jonathan Schultz:

My pleasure.

Christie Mullen:

Alright! I think we’re done.

Jonathan Schultz:

Thank you.