Like most industries today, real estate is poised for major changes brought on by technology. To get students thinking about the possibilities, Wharton real estate professor Gilles Duranton and lecturer Richard Mack W89 piloted a new course last fall. “Technology pervades everything, and how it happens is an opportunity but also something that could really whipsaw you if you’re not ready,” says Mack, CEO of Mack Real Estate Group.

Duranton and Mack invite industry leaders to speak on emerging trends in their class, Real Estate Disruptions. (Last year’s guests included Richard Sarkis, head of real estate analytics startup Reonomy, and Richard Baker, governor and executive chairman of Hudson’s Bay, owner of Saks Fifth Avenue.) Duranton and Mack also assign a robust set of articles and books on the nascent subject of property technology (“proptech”). Select readings from the course offer a window into the type of world—and, specifically, buildings—we may soon be living in.

PropTech 101

This book by real estate investors Zach Aarons and Aaron Block gives a broad overview of the subjects that students dig into during the semester. The authors — co-founders of MetaProp, a venture firm focused on proptech — examine how nearly every aspect of the industry is being affected by tech’s rapid advancement. Topics covered include how startups can get their footing in the space and, likewise, the disruptive effects these companies could have on the industry’s key players.

Matchmakers: The New Economics of Multisided Platforms

Some of the world’s greatest business successes have come out of a very simple concept: matchmaking. In the realm of real estate, Airbnb reigns as the epitome of a company that has cracked the matchmaking code, pairing home- sharing renters with users looking for short-term stays. But getting these kinds of platforms to scale successfully can be very challenging, and most fail. “If you’re Airbnb and you have only two properties and three people searching, that’s not going to be successful,” says Duranton. “But if you have a million beds and a million people searching, it’s more likely you will be.” This book, penned by tech-savvy economist David S. Evans and former MIT Sloan School of Management dean Richard Schmalensee, explores these businesses and offers tips for success in a challenging environment.

“WeWork Grows Up (and Out and Everywhere)”

Before its fall from grace last year, WeWork was a darling of real estate startups. This Fast Company feature recounts the company’s ambitions to expand beyond its primary business — leasing co-working spaces — into areas such as renovating other offices and providing technology upgrades for commercial spaces. A failed effort to go public last year brought to light the company’s dire financial situation and led to a bailout by its main investor, SoftBank, led by Masayoshi Son. (In an about-face, SoftBank announced it was canceling the deal in April.) “There was a change in the startup world for proptech in particular, but also the broader startup world, where people are now suddenly more interested in the bottom line: Can you actually make money?” says Duranton.

“The World’s Most Valuable Resource Is No Longer Oil, but Data”

One of the greatest challenges to a startup’s success is its ability to access data. That’s essential for brick-and-mortar retail companies, which can use data to analyze shopping behavior, and businesses like Opendoor that use aggregated information to buy and sell homes at optimal price points. But, as Mack says, “The vast majority of data as it relates to real estate isn’t really available in a place that can be utilized in a large algorithmic format.” Instead, most of it is held by tech titans such as Google, Amazon, and Facebook, a problem that’s scrutinized in this Economist article.

“The Tokenization of Real Estate”

Ever imagine owning a piece of the Empire State Building? In this blog post, blockchain expert Sina Habibian lays out the possibilities and challenges of letting real estate owners sell stakes in buildings by issuing digital security tokens—which essentially represent ownership in a tangible asset—to individuals. It’s complex stuff, and whether it will be good for both investors and sellers is unclear in these early stages. But if it becomes mainstream, selling shares of buildings this way could dramatically change the way the real estate market operates.


Published as “Real Estate Revolution” in the Spring/Summer 2020 issue of  Wharton Magazine.