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Data analytics shines as the rising star of property technology (proptech) in the real estate industry, according to a report released by ULI and international law firm Goodwin Procter.

The report shows that only a small number of the 200 ULI members surveyed had embraced data analytics as a component of proptech. However, nearly 70 percent of those surveyed indicated that they plan to delve into data analytics over the next three years. While the business area of data analytics was among the least common areas cited by survey respondents, it ranks second only to project management as a proptech focus over the three-year span.

“This dramatic growth sets it apart from every other business area,” the report says.

In all, the survey queried real estate professionals about the use of proptech in 11 business areas.

Aside from the growing interest in data analytics, the report says that the impact of recently adopted data analytics technology on business functions sets itself apart from other business areas. Three-fourths of the companies surveyed described data analytics’ role in business operations and services as “highly impactful.” This rating outweighed that of other business areas when it comes to their effect on business operations and services.

The growth of data analytics dovetails with the broader expansion of proptech. Mordor Intelligence predicts that the size of the proptech market will double from $6.75 billion in 2020 to $13.46 billion by 2026.

“Historically, real estate has not been regarded as the most progressive of industries, but that is changing—and changing fast. Proptech has undeniably become essential to companies to maintain a competitive market position,” Ed Walter, ULI global CEO, said in a news release accompanying the proptech report.

During a July 21 webinar held in conjunction with the report’s release, experts signaled that proptech is now a need-to-have rather than a nice-to-have component in the real estate industry.

“From the Hines perspective and my perspective, there is no turning back,” said Paige Pitcher, director of innovation at Houston-based real estate developer Hines. “The digitization of real estate is well underway. You can be either be a participant in it or surprised by it.”

As it pertains to data analytics, John Gilbert, executive vice president, chief operating officer and chief technology officer at New York City–based property owner and manager Rudin Management Co., said that property-level data is useful only if it can be stored, organized, and scrutinized.

“People say that for proptech, data is the new oil. It’s crude oil—it’s sticky and gooey and probably not very useful,” Gilbert said. “What you need is software that ultimately refines that into a user experience, that gives you insights on how to better run your buildings.”

Gilbert said that Rudin crunches data to manage energy and water consumption and costs at its buildings. For instance, Rudin’s technology relies on artificial intelligence to “memorize” water consumption at the company’s properties. In 2013, Rudin piloted the Nantum OS system for management of property portfolios. Two years later, it established Prescriptive Data, a wholly owned subsidiary for the development and sale of real estate software.

Hines relies on a global data platform created internally to manage its portfolio, enabling the company to raise capital more quickly than ever before “because we have all the answers in one place,” Pitcher said.

To date, most players in real estate have not reached the point where they can “tie all the data together” the way Hines has, said Michael Spies, a venture partner at Los Angeles–based, proptech-focused venture capital firm Navitas Capital.

“But we can all see how it’s going to get there, and you don’t want to be on the outside of that,” Spies said. “That’s going to really revolutionize the way in which organizations think about creating the assets but also operating the assets, and that’s what you have to have as an end vision. At the same time—and this is what’s really complex—you have to prioritize which … problems you want to solve.”

When it comes to setting those properties, Gilbert offered a simple suggestion: Follow the money. Under this scenario, you would want to concentrate on financially rooted issues like energy consumption and tenant experience, according to Gilbert.

During the webinar, speakers said that the evolution of blockchain—a digital ledger for transactions—promises to figure into proptech priorities. Uses for blockchain in the real estate sector include asset management, project financing, and property development.

“I don’t know that we’ve reached the end of our imagination when it comes to applications for blockchain in real estate,” Pitcher said. “There’s an incredible at-hand opportunity to jump in and be able to execute on it.”

Potential functions for blockchain in real estate do not stop at fractionalization of real estate ownership, she said.

“Any type of verification which is repetitive lends itself to blockchain,” said Spies, citing title insurance as an example.

Regardless of the type of technology, collaboration—as opposed to competition—is vital in proptech, according to webinar speakers.

“Real estate is generally noncollaborative,” Gilbert said. “Software is very collaborative. It’s all about, ‘Who do I partner with? How do I share?’ And you’ve got to find your niche in terms of your own support group, if you will, that can help you.”

“The digitization of real estate is both an opportunity and threat to all of us,” Pitcher said. “So, I think sharing stories and ensuring the success of certain companies that are not us … is in everyone’s interest.”