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How Proptech 3.0’s Innovations in Real Estate Technology Can Transform the Industry

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Real estate technology and PropTech 3.0 offer yet one more avenue for impact investors to play a role in combating global warming.

PropTech is short for property technology, and it refers to the various digital transformations that change how the real estate sector uses sophisticated technology and software. The impressive evolution of PropTech has led the World Economic Forum to distinguish between three distinct eras: PropTech 1.0, 2.0, and 3.0.

Taking Note of the PropTech Revolution—and Evolution

PropTech 1.0 began in the 1980s with the invention of personal computers and developed further as online property listings grew in popularity. PropTech 2.0 took off in the early 2000s alongside advances in data analytics. This phase enabled smart real estate models to operate with technology-based platforms, allowing real estate assets to be managed through the Internet of Things (IoT).

PropTech 2.0 also saw the rise of shared economy platforms able to facilitate information and transactions between real estate users and market participants. Within the same wave, real estate financial technology emerged to allow the trading of property ownership.

In this current wave, PropTech 3.0 brings even further innovation to the sector through technologies such as big data, augmented and virtual reality, and artificial intelligence. These innovations create opportunities to streamline new areas of the real estate sector and add value.

The third wave of PropTech comes as the world grapples with the growing environmental threats. As buildings account for 39% of global carbon emissions, PropTech 3.0 has the potential to make the built environment greener and help tackle global climate change.

The third wave of PropTech comes as the world grapples with the growing environmental threats.

Seeking Innovative Solutions

PropTech 3.0 and its advances could be key to making buildings smarter and more efficient. For instance, global PropTech firm Willow’s real estate technology solution WillowTwin allows companies to manage real-time energy usage across entire buildings and individual office floors. The software solution deploys digital twins to collect, organize, and analyze data.

Commercial office landlord Brookfield Properties has adopted the solution in combination with Microsoft Azure’s IoT product in order to reduce costs and lower energy usage at its One Manhattan West building in New York. Brookfield is looking to expand its use of WillowTwin as it takes action to improve efficiency across its properties.

In addition to making existing building infrastructure more environmentally friendly, PropTech 3.0 can also play a role in the design of new intelligent buildings going forward to maximize the potential of green energy infrastructures, such as solar panels and ultra-energy-efficient ceiling fans.

A green real estate revolution could see new carbon-neutral buildings spring up alongside existing buildings that have adapted to become more energy-efficient—a compelling prospect in the face of many buildings’ large carbon footprint.

PropTech 3.0 could also help establish sustainability reporting standards for properties through reliable, comparable, and real-time data, directly helping to raise environmental standards for buildings.

For ESG investors looking to support climate-friendly efforts, PropTech 3.0 offers the ability to both maximize impact now and shape smart real estate trends for the next iteration of PropTech.

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