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Millionacres Spotlight: An Interview with Michael Beckerman

In this episode, Millionacres writer Jeff Piltch talks with Michael Beckerman, CEO of CREtech, about his firm’s new climate and sustainability platform along with why and how the real estate industry is such an important part of making a difference.

Transcript:

Jeff Piltch: Hey, everyone. I'm Jeff Piltch, one of the writers here at Millionacres. Thanks so much for tuning in to a special spotlight feature today. As a real estate tech nerd, I'm pretty pumped about this one. Today we're checking in with Michael Beckerman, CEO of CREtech, the largest global consulting, media and conference company devoted to technological innovation in the real estate sector. CREtech's mission is to help the industry embrace, adopt, and future-proof their businesses to inspire the next generation of ideas, processes, and people to champion the world's largest asset class. Beckerman also leads CREtech's newest initiative, CREtech climate, which is the voice of the real estate industry's commitment to Climate Tech. CREtech climate aims to galvanize the real estate industry to reduce its carbon footprint throughout the entire built world. Michael, thanks for joining in today.

Michael Beckerman: Hey Jeff. Thanks so much for having me. What a wonderful intro. I appreciate such complementary thoughts and words about us. Did you get that from somebody? [laughs]

Jeff Piltch: Somebody might have filled me in why you were up to. But it would be nice to hear it from the man himself. I would love to hear about the aha moment of what inspired CREtech? How did we get here today?

Michael Beckerman: Great. Thanks so much. I appreciate all your support. I know you've been following us and the industry for a long time now, and we appreciate your voice and we appreciate your support. Just a quick back story. I've been in commercial real estate my entire career of 35 years. The first 25 was on the media, the marketing, the public relations side. I've always been steeped in this industry on the commercial side. When we say commercial, we're talking office buildings, apartments, logistics, warehouses, retail, hospitality.

Jeff Piltch: Anything, not single family.

Michael Beckerman: It's not consumer facing. This is B2B. Although some of the technologies that we'll talk about are consumer facing. About 10 years ago, looking for the next blank Canvas for me, reading a lot and studying technology, going, "Why is the real estate industry embracing tech?" Financial services is, healthcare is, every other industry on Earth except for ours. I just wanted to go there and I was attracted to the fact that it was literally like day one of the industry. We had some big companies, big legacy companies, Yardi, CoStar those types, but we didn't have this emerging young tech sector. I was like, listen, what do I enjoy doing? I enjoy connecting people, I enjoy broadcasting, and creating awareness so CREtech was born as really as a media company, focused mostly on conferences, physical, and then COVID obviously pivoting to virtual, and we'll be back in physical this year at some point.

Jeff Piltch: Awesome. I can dig in for hours on that stuff, but I would love to focus on CREtech climate, and the new platform that you guys have launched here, it seems to have a lot of traction. I would love to hear more about how that's specifically started, and what we have planned, and maybe just getting the listeners up to speed on what's happening there, might be helpful.

Michael Beckerman: Just to put it in context. The real estate tech or prop-tech sector, I don't know, 20 to $30 billion a year invested in that sector. That is everything, that's data, that's building access, that's marketplaces, you name it, the sectors hot right now, that we're seeing IPOs, we're seeing SPACs, we're seeing big money being raised and companies really starting to scale 2020, '21. Then I come to discover the fact that this industry that I love, it's 40 percent of all global emissions, globally are coming from the built world.

Jeff Piltch: Wow. That's a big number.

Michael Beckerman: How the hell do I not know that, and I'm in this business of media and information and content. I got to do something about that because I believe in science, I believe in climate change as real. If this industry is culpable in climate change, I got to use this big voice, this big platform to do something. Hence, we launched CREtech climate literally just like a month or so ago to try and galvanized the real estate industry to invest in Climate Tech, sustainability, and ESG. Same thing I did on CREtech, how do you connect the technology companies, how do you connect the corporates, the real estate industry, and how do you connect venture? You pull them all together to build a global platform? We did it in CREtech. We got up to about 100 thousand or so as an audience, the biggest in the world on the real estate technology side, and it could have taken me a long time, Jeff. It took 10 years. We don't have that much time. I feel a great sense of urgency on climate.

Jeff Piltch: That's a really good brief there. Obviously, you have this big voice and it's awesome that you're focusing on some of these climate initiatives. It's only about a month, what can we expect in the next couple of months, next years? What else are we going to do to dig in here? I'm interested to learn.

Michael Beckerman: The first thing we started to do was to understand who the real early adopters were and get them involved. Because if it's just me shooting off my big mouth, [laughs] it might get me better. They make my wife and kids think their dad actually does something meaningful for his career, but it's not going to move a needle. I had to go get the big stakeholders. I got some big landlords that were early adopters, RXR, Oxford, Lennar, others to help me. I got big consulting companies like EY to get involved. Then the industry associations, the people that are already there are doing the hard work. We put it all together and now we're like, let's go out and tell the story. Let's go educate. It's going to be webinars, is going be virtual conferences, is going to be a daily newsletter. It's all free. But there's so much work to be done, Jeff, because, we also don't have all the technology solutions on the scene yet. We really got to encourage the industry to start to invest. We went, and we've got a wonderful relationship with Fifth Wall, with the biggest venture capital firm in our sector. I said to them listen, we're going to go do this thing, and they just said, "We're in. We will walk side-by-side with you. Fifth Wall is also a major, major partner in our [inaudible 00:06:58]

Jeff Piltch: Didn't they just launched a fund focused, specifically on Climate Tech, related to the built world? Yeah, that's super cool.

Michael Beckerman: It's about $300 million fund that they're launching. Really man, we just got to get the word out. We got to drive investment. One of the things that we started doing early was to do a survey to try and gauge how much money the industry's investing in climate technologies. It's about 100 million over 10 years, which is nothing to do address climate change. We got a lot of work to do. I got to attract more venture. I got to attract more corporates. I got to attract more technology providers. As you could tell, I'm pretty energized about this, but a lot of work ahead.

Jeff Piltch: Love it. Earlier you had mentioned that the built world contributes to, I think you said, 40-ish percent of all the emissions. You've listed some big names there like RXR and Oxford. What is it going to take in order for the rest of the industry, some of these smaller players that might not have a corporate venture capital arm or something like that, to participate? That might not have as big of a footprint because I think that's when we really get to an inflection point as when the mom-and-pop get to be involved. How do you see that happening?

Michael Beckerman: What a great question. Well, listen. First, what we got to do, we've got to get more of the big real estate companies to embrace it. They're starting to do it. Honestly, Jeff, it's happening more in Europe than it's happening in the States. You look over in Europe and citizens are involved, governments are involved, real estate companies are involved, tenants are involved. They're legislating it. They're creating incentives for it so we're seeing it over there. Here domestically, we've got to attract more of the big corporates to be able to do that. They've got to hire, they've got to develop strategies, they got to understand where the ROI is, where they can adopt as well, and then, I think, once we get the biggest stakeholders in the industry to adopt, I think the others will follow. But again, we don't have the time that they had with the real estate tech side. We just don't have the time, so we got to get them all.

Jeff Piltch: Totally. Another question I have on that note is, how do we make it so it's more than just like a financial ROI mindset? What do we have to do to get to that point? Because that seems what it's been in the past is like how do we rationalize the spending to save money on XYZ, but how can we get people excited about something bigger than just the bottom line? I guess maybe it's in parallel, but I would love your thoughts on that.

Michael Beckerman: Listen, I love the real estate industry, so this is not bashing the sector that I love that's been so good to me and so many friends. But the real estate industry is not going to embrace these tools unless there's some mandate, right? What does that mean? The first thing is their customers need to demand it. If I'm living in an apartment building, I've got to be able to say, I'm only living in apartment buildings that have good air quality, good ventilation, are sustainable, blah, blah. Then, corporate office tenant, I've got to insist, I'm not going to lease space in a building that does not fit and meet all of these criteria. If I'm a bank, if I'm a lender, if I'm an insurance company, I'm not going to lend, I'm not going to underwrite unless I see these minimum requirements met. Governments are coming man, so New York, LA, a lot of other places in the world are starting to say, unless you meet certain net-zero commitments, certain carbon commitments, we're going to penalize you. Then the real estate industry also wants to see the ROI. There's been some great studies at MIT and Harvard. Your neck at the woods said, "Listen, if you make these investments, you'll command higher rents, you'll be able to trade your properties for higher returns. There is an ROI there, but it's going to take all of these external influences to really incentivize the industry to move with this great sense of urgency that we're talking about.

Jeff Piltch: Yeah. What you talked about at the beginning, that was an interesting take. It's almost like, with millennials pushing a lot of these climate initiatives that if you're in an apartment building, you can almost deliver top-line returns by having a more sustainable building and be able to in theory charge more. I don't know if there's any legs there, but that just comes to mind. Have you seen anything out there like that?

Michael Beckerman: It's a fact. MIT has done a study that says, you could charge between, I think it's up like 4.4-7.7 more in rent per square foot with a healthy building. Smart connected green buildings are getting premiums on trading. I think the study said something like 25 percent more value healthy buildings versus nonhealthy building. The more we can get that message out there, I'm confident we'll galvanize the industry to take this seriously. But it's all going to be about the dollars they invest Jeff. So $100 million over 10 years, give or take, it's paltry, it's embarrassing. What does that number need to be? In the tens of hundreds of billions of dollars, honestly. It's concrete, it's steel, it's air, it's glass, it's everything, the way we construct and the way we operate. It's heat pumps. I could just go on and on and on about where, but we need to get there fast.

Jeff Piltch: It's great. It's really super interesting to think about. Just like stepping back a little bit, at the beginning of the pandemic, you wrote I think a couple of blog series posts about, now is the time for re-imagining real estate and I can't believe it's already been a year since that, but I would love to hear what you were thinking then and how things have happened over the last year and what you're thinking now versus then?

Michael Beckerman: You know real estate as well as anybody. The real estate industry is one of the most successful investment opportunities in the world. It's always been as terms of a category. There are formulas that work, you approach office this way, you approach industrial this way, multi-family this way. There's tried and true methods to real estate development and investing and they haven't changed literally for generations. There's been modifications and there's some that are better than others in terms of adopting innovation within the built world. But it really hasn't changed that much. COVID, really for the wrong reason but it's fact, was an extraordinary accelerant of change and innovation in the real estate sector. Because now companies, residents, we're rethinking and we re-imagining every aspect of the built world. How do we work? What is flex space? How do we shop? What's the e-commerce impact on retail, logistics, retail? Everything's being rethought and reevaluated post-COVID, which creates just an extraordinary opportunity. Retail being converted to housing or medical. Office buildings, now, not just being a place that's a long-term lease. We'll see in seven or 10 years the office sector is thinking of itself as it fits in the hospitality industry, which is phenomenal and it's extraordinarily exciting. There's not a part of the industry that's not being reevaluated, rethought, and re-imagined. It's pretty exciting and again, Jeff, technology is the underpinning of it all because that's what's enabling the industry now to re-imagine things.

Jeff Piltch: I love that. How can the average person get involved here that's following you, that isn't Oxford, and has tons of money that they can dedicate to this? How can people help and be involved with what you're doing?

Michael Beckerman: Here's the thing. Again, I'm not an investment advisor by any stretch. There are so many extraordinary tools now available to smaller landlords and investors to help them gain a competitive edge. Whether it's property management, whether it's tenant experiences. They're not looking for, the health club as much as they are, is a great app to get food delivery, you know what I mean? It's enabling real estate owners, operators of every size to become more efficient as an operator and more effective in servicing their customers. There are 7,000-10,000 solutions out there for real estate investors to be able to adopt and purchase. There is amazing crowdfunding platforms out there like Crowd Street. There's amazing buying and selling platforms out there. There's just tons of them. There's Biproxi, there's Crexi, there's Ten-X. There's so many, so you can get in the game with as few barriers to entry as there's ever been in my career now because of technology. Just follow us at cretech.com. You'll see a wealth of information that comes out all the time. We've got all of your great content on there as well. It's a place to discover and learn and educated and get connected as well.

Jeff Piltch: Love it and how can people follow you? I know you mentioned cretech.com, but how can people follow you before we tune out here?

Michael Beckerman: Yeah, man. On LinkedIn, Michael Beckerman. On CREtech, I post a lot of stuff there, doing a lot of webinars. It's all free, it's all on CREtech, you'll find it all there. Hopefully, we make it easy and digestible and it's all free.

Jeff Piltch: No, you do. I actually every Friday, I'll scroll through the funnel you have of all the news for the last week. That's how I stay up to date.

Michael Beckerman: That's one of our systems, the news funnel, which is another [inaudible 00:18:05] .

Jeff Piltch: Exactly.

Michael Beckerman: We're just trying to make anybody who is interested in investing, adopting, getting a job, discovering tech, very accessible and easy for everybody. We appreciate all your support in helping get the word out there. I thank you for having me on and let me shoot my big mouth off about. [laughs] [inaudible 00:18:29]

Jeff Piltch: [laughs] Thanks so much, Michael. I hope you enjoy your walk after this.

Michael Beckerman: All right, Jeff. Thanks, man. See you down the road.

Jeff Piltch: Thanks, Michael and thank you, everyone, for tuning in. Hope you enjoyed the session today with Michael. If you have any questions or anything, feel free or just reach out to help@millionacres.com. Thanks, bye. Awesome. Thanks, Michael.

Michael Beckerman: Great stuff, Jeff.

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