Threat of Tech to Real Estate valuations

5 Replies

I've had some really interesting conversations lately about the impact of technology on RE. 

Aside from some benefits, I see a lot of room for disruption. 

For example: how are 3D printed houses going to impact the value of existing houses and MF buildings? 

For a while, Amazon and e-commerce were seen as an existential threat to Retail. 

What other developments do you see negatively impacting the value of RE?

We're a very long time from the commercialization of 3D printed buildings. 3D printing is only going to do the structure, so there will be a ton of finishing work needing to be done. That'll still be nice and pricey. Municipalities across the country will take their sweet time to approve 3D printing technology as well. Even then, I doubt it'll make a huge difference. The 3D printing machines will be enormous. Engineering, site planning and development, & building design will still be required.

The main thing we have to worry about now is recession leading to decreased ability of our tenants to pay rents, including C & B class assets. Additionally, if interest rates get forced upward quickly for one reason or another (trade war?), that'll seriously hammer commercial real estate, which is financed on much shorter terms than residential.

While being more efficient, I think always disruption of the humanization aspect of it. Weighing the pure output's vs other factors that may be considered.

Think of a Lender, appraiser etc. 

...Job obsolescence?

3D printed houses is very far away from being anything substantial. At this time I just can't see the build quality being the same as a traditional built house. Just look at manufacture homes vs regular built homes. Quality is not the same. 

Def some disruption coming but thats technology in general it goes and looks for things that are inefficient and makes them efficient. 

@Bjorik Mutize Thanks for the insight. I definitely agree that tech is making jobs obsolete. I work at a bank that is underwriting over $1B in loans a month with an underwriting team of 5 people. Most of the process is automated and every loan is individually qualified. The human factor is huge. 

@Frank Wong I agree the tech is still young, but is it further away from disrupting the market than Amazon was from reshaping Retail in 1999 (a few years in)? Tech tends to move in two gears: fast and faster. 

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