Real Estate Technology Bubble?

As many of us have read in the headlines recently, there have been multiple multi-billion real estate technology companies funded by SoftBank's Vision Fund. Recent funding rounds include WeWork, OYO Rooms, Katerra, Opendoor, Compass, and several others. I personally have a difficult time grappling with WeWork's astronomical valuation, let alone it's long-term viability, especially during a recession. What is everyone's thoughts here? I do think real estate tech or proptech is here to stay, which will have positive long-term affects on real estate. Additionally, several major firms are either forming their own in-house venture capital arm (Blackstone, Brookfield, Starwood, RXR Realty, Simon Property Group, JLL, etc) while Fifth Wall Ventures and MetaProp are garnering capital to act as an external corporate venture arm.

 

I've heard multiple landlords say they will either not least to WeWork or minimize their exposure to co-working in-general (multiple players within this space). On the flip side, when WeWork comes knocking it's hard to turn down an offer to lease 20 - 50% of your building. I've also heard positive things from Boston Properties regarding WeWork whereas other players like SL Green, Vornado and Brookfield are keeping their distance.

Robert Clayton Dean: What is happening? Brill: I blew up the building. Robert Clayton Dean: Why? Brill: Because you made a phone call.
 
thhddd:
WeWork is not a bubble

Go to some industry event like CREFC and hear what the senior executives from Boston properties and other big leasing companies say about WeWork

Lol how much income/value is WW adding based on their leases with Boston???? Big leasing company don't bite the hand that feeds either.

Everyone in that room is in on that farce.

 

Depends what kind of returns the investors are looking for. Some of this “technology” is only applicable to a small niche and will never be the next Facebook some of the accelerators think they’re creating. Piecing together what I know from the news, my industry contacts, and my friends at these startups, the bubble is more of an arms race to reinvent the wheel just so everyone can say they reinvented it first…and by the way you should license the reinvented wheel from me.

There isn’t any ground-breaking tech or innovation happening, it’s a lot of marketing and repositioning. To throw billions at that is a bit much. The institutions you named also seem a little out of touch with what they can gain from it, and are acting more like dumb money afraid of being left on the sidelines.

AFAIK none are profitable, and at these valuations they’re too big to be acquired. Will the public markets punish them?

“Doesn't really mean shit plebby boi. LMK when you're pulling thiccboi cheques.“ — @m_1
 
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