Head in the clouds
With the number of cloud-based investment platforms seemingly increasing by the day, brokers are feeling the squeeze of a more efficient and transparent process, but there is room for both What do cloud investment platforms have to do in order to offer a meaningful alternative to the traditional brokerage model?
Cloud-based, and especially artificial intelligence-powered platforms such as Truss, are uniquely positioned to provide real-time responses to consumers of commercial real estate.
For example, when tenants answer our chatbot’s business requirement questions, they can then immediately compare spaces against available market inventory and receive ranked suggestions for the perfect office space.
The status quo has been that a traditional broker asks questions of a prospective tenant and then goes away to browse the broker’s private listing subscription providers, to build a manual PDF file and to email the findings to their tenant.
Cloud-based platforms such as Truss also allow the suppliers (landlords and listing brokers) to update their pricing and pictures from any mobile device (straight from a camera phone) and have that information be updated and propagated in real time.
This process takes days or weeks to complete on current proprietary platforms such as CoStar.
So, cloud-based commercial real estate services can greatly compress the response time to the information and data needs of consumers (in our case tenants), and suppliers (landlords) can greatly accelerate the transaction time from 20 weeks or more, down to fewer than 10 weeks.
CEO and founder
People buy from people, especially in financial services. Despite the exponential growth of digital finance over the last five years, the majority of customers fall within the ‘millennial’ or ‘early adopter’ category.
Other investors tend to gravitate towards traditional brokers, or at least large, online platforms with roots in traditional brokerages. Take, for example, broker platforms such as Best Invest or Hargreaves Lansdown’s online platform. Ultimately, the experience, credibility and longevity of tradition suggests a system to be ‘tried and tested’. In turn, trust becomes a natural artefact—even in the digital space.
Yet, in this regard, while tradition may hold the power of experience, cloud-based investment platforms hold the power of innovation. If investors were to extend their financial approach beyond their comfort zone, they could unlock a breadth of products that have been tailor-made to suit their personal needs. Naturally, a level of trust can be formed in the authenticity of such an offering.
Likewise, competitive positioning within the market is paramount—if a platform offers better or similar products at a substantially lower cost, investors may be more likely to take the first leap.
As such, the success of cloud-based investment platforms depends on trust, product range and price. While innovation veers away from ‘tried and tested’, continued growth and testimonial success could gradually mainstream innovation as the new tradition.
CEO and co-founder
They’ve got to be transparent, comply with regulations and democratise investing for the 96 percent of Americans who don’t have access to earn the same opportunities that accredited investors do. While this is not an easy road, committing to full transparency and accountability is key.
Cloud-based investment platforms need to comply with the US Securities and Exchange Commission and submit to full regulatory oversight and disclosures, including audited financials.
This is important in establishing investor and brand confidence. For example, Groundfloor is the only real estate investing vehicle to report monthly and disclose our track record through public filings.
Real estate crowdfunding opens up private offerings traditionally only available to the wealthy. Once investment barriers are lowered and fees are more like 1 percent instead of 4 to 7 percent, and the minimum to start investing is $10 to $100, instead of $1,000 to $5,000, only then will this cloud-based investment platform be a meaningful alternative to the traditional brokerage model. You shouldn’t have to ‘have money to make money’.
Also, give investors the control and choice to build their own portfolio directly, or with the help of an advisor. Imagine if it were only possible to invest in public equities via mutual funds, if you couldn’t buy an individual stock. That’s where we are in the world of private offerings in the US, unless you’re an accredited investor. Cloud-based platforms can change all that.
The latest features from Real Estate Investment Times
Attendees at this year’s EPRA conference were forced to reckon with the social and political challenges facing the industry on a global scale
International institutional investors want in on the private rented sector in the UK, says independent property expert Sam Collins
Join Our Newsletter
Sign up today and never
miss the latest news or an issue again
Alternatives continue to see rising demand from institutional investors in the Canadian marketplace. Tim Rourke, vice president of pensions and asset owners at CIBC Mellon, discusses how the country is well placed to meet it
Fund managers expect the private real estate industry to grow over the next three years, but Preqin’s Oliver Senchal warns against market consolidation
New regulations from the ECB have given real estate investors a lot to think about in the non-performing loans market, but appetite remains strong. Theo Andrew reports
Paul Conroy, real assets director at Aztec discusses the relationships behind co-investing and explains why it’s important to make sure it’s not just a marriage of convenience
With the number of cloud-based investment platforms seemingly increasing by the day, brokers are feeling the squeeze of a more efficient and transparent process, but there is room for both
Green investment is now recognised as generating higher returns, but more transparency is needed to attract investors, as Theo Andrew finds out
The latest country profiles from Real Estate Investment Times
Between Brexit and post-crisis recovery, Frankfurt’s office sector is booming, with particular interest coming from the world’s financial institutions, according to Andreas Krone and Lenny Lemler of NAI apollo
Africa has long been coveted as the land of real estate opportunity, but more needs to be done at a local level to break the market, heard attendees at the Second West African Real Estate Forum in London
Asset Servicing Times
Visit our sister site
for all the latest asset servicing news and analysis
Callum Young of Savills tells Mark Dugdale why South Korea’s real estate market is attracting both domestic and international attention
UBS Asset Management Global Real Estate has launched a new business initiative in Brazil, in partnership with Brazilian consultancy Real Estate Capital. Senior adviser Miose Politi explains
A member of the EU since 2007, Romania boasts a property market that has been on the up ever since. Liviu Tudor of the Romanian Association of Building Owners explains
Alternative allocations are becoming mainstream for institutional investors, and Canadian companies are leading the pack, says Claire Johnson of CIBC Mellon
Amid cross-border restrictions and tightened belts, Luxembourg’s kingdom of real estate investment won’t be crumbling any time soon
The latest interviews from Real Estate Investment Times