From Where I Sit: Episode 5 With Brendan Wallace Transcript

Tom McGee:

Welcome to From Where I Sit, I’m your host, Tom McGee, President and CEO of ICSC, the preeminent membership organization serving the commercial real estate and retail industries. Each episode, I’ll be joined by top experts to explore the trends impacting communities and commerce and the spaces where people shop, dine, work, play and gather.

I'm excited to welcome Brendan Wallace, CEO and Chief Investment Officer at Fifth Wall, to the latest episode of From Where I Sit.

Fifth Wall is a $3 billion asset manager investing at the intersection of real estate and technology. Brendan co-founded Fifth Wall and now guides the firm's strategic vision. Previously, Brendan co-founded Cabify, the largest ride-sharing service in Latin America. He's a veteran of Blackstone and Goldman Sachs, MBA from Stanford, and a BA from Princeton University. So, you have a great resume, Brendan, and it's a pleasure to talk to you.

You’re obviously a specialist in the topic we want to cover today, which is Proptech. So welcome to the show.

Brendan Wallace:

Yeah, thank you for having me.

Tom:

Brendan, a lot of our listeners are at varying levels of understanding of what Proptech is, the opportunities there. So maybe let's just start there. How do you define Proptech? What is Proptech?

Brendan:

Proptech is technology for the real estate industry, very broadly defined. Proptech has become the nomenclature that people use, but it's just saying that the real estate industry, which is the largest industry in the U.S., about 13% of U.S. GDP, is a massive asset class. It's a massive lending category. It's a highly operationally intense industry. But bizarrely, it's one of the few, maybe even only, US. Industries where most of the companies in it have no R&D departments. There's no R&D in real estate. And so, for that very reason, the real estate industry has been a very slow and late adopter of technology. And in many ways, Fifth Wall stepped in to fill that void. We said, look, the real estate industry needs to begin to invest in and adopt new technology solutions that can make their businesses better and they haven't done so. And so, we raised a venture capital fund to pursue that on their behalf. And now we do that with a consortium of all these large institutional real estate owners.

Tom:

You're right. I mean, as I observe, real estate is not necessarily a fast mover as it relates to technology. And it's a very long-term asset intensive kind of business.

Let's talk a little bit more before we get into more depth around Proptech itself. Just talk about Fifth Wall because the platform that you've built is fascinating. It's very innovative. The number of LPs that you have involved. And you've also recently launched a new business as well around Fifth Wall Securities. So just give the listeners a little sense of just the scale of what it is that you're focused upon, which is quite large and impressive.

Brendan:

Yeah, Fifth Wall is the largest, the most active venture investor in Proptech. So what we do is we raise venture capital funds and those funds are composed, they're co-mingled long-term, 10-year venture capital funds, just like any other venture capital fund. The thing that makes us unique is that we raise probably about 50% of our capital from the largest owners and operators and developers of real estate. So, this is everyone from public REITs, many of whom are a part of ICSC, to family offices, to pensions from the real estate industry. And so what that does is it gives us a really unique edge insofar as, we know because we're engaging with these large real estate corporates strategically, we know what they're going to adopt, what they're going to use, what they're going to partner with well before they do it. And that's really what has been responsible for our track record. So, we have now $3 billion across all of our funds. We have 110 of the world's largest owners and operators and developers of real estate from, I think over 15 countries, every major asset class from malls to home building to data centers to marinas to infrastructure, everything basically. We probably have—if you were to like think of a real estate firm, like a name recognized real estate firm, it's probably like a one in two chance they're now invested in Fifth Wall’s funds.

And what we do is we connect them to new technology companies. And you can think about it as we are a better solution than doing corporate venture in-house because we're just a lot cheaper. We have been able to replicate what other industries have done on an external basis for real estate owners that really care about getting access to the best tech solutions.

Tom:

Well you have such a large platform and it allows the real estate developers to diversify their investment over a larger segment of investments.

Tell me a little bit about just the trends in the industry. Commercial real estate has gone through a lot over the course of the last 10 years or so with everything from the pandemic to the so-called retail armageddon, etc. What are the trends in Proptech that might support the commercial real estate industry in a period of a lot of change?

Brendan:

I would say the trends in Proptech, as much as I'd like to say they've changed, they've been the same for quite some time, which is, because the real estate industry has been so slow and so late to adopt technology, most systems and processes are, I'd say either pen and paper or borderline pen and paper, or they're very-

Tom:

A lot of Excel spreadsheets, right?

Brendan:

Yeah, a lot of Excel spreadsheets, a lot of software that was either home-built or built in like the late 90s, but it's just, it’s not modernized at all. So, a huge part of where we invest and where we've been very successful is just investing in software solutions that help you do real estate better, faster, cheaper, easier. And that's leasing and asset management software. That's property management software. That's facilities management. That's marketplaces around repairs and CapEx. It's stuff like in Fintech, around Insuretech, financial products to accelerate how you can secure a mortgage, do underwriting of assets. And that largely hasn't changed since we've been in existence. We've been investing in kind of the same categories over and over again, and we've had success doing it over and over again because there just is so much low-hanging fruit in the real estate industry.

But in terms of like new emerging trends, I would say we, like everyone, are paying a lot of attention to AI and we think the application layer for the real estate industry is going to be very impactful. It's very early still, but some of our more innovative real estate partners are adopting solutions in-house that are really exciting around that.

Tom:

It's interesting when you talked about low-hanging fruit and investing in a lot of the same things. A lot of it—and you mentioned the size of the commercial real estate industry, but it's still a fairly fragmented industry too. Even the largest players as a fraction of the entire commercial real estate industry are still just a fraction of it, where you compare it to the technology and financial services, where there's some really large behemoths that have a large share of the industry. So there's a lot of opportunity there isn't there?

Brendan:

And that fragmentation is candidly, I think why it's, one, so hard for real estate owners to get access to the best technology solutions. The amount of capital that any organization would have to allocate to a corporate venture capital strategy to be relevant, sufficiently relevant to get access to the best technologies and the best solutions and have the team to underwrite them and connect them to their operating teams, you'd have to be deploying literally hundreds of billions of dollars. And if you show up with a hundred million dollars in the venture capital ecosystem today, you showed up with a stick to a gunfight.

Like you're just not going to get access to the best solutions, no matter who you are. And so our thesis has always been, let's solve that problem with aggregation. Let's aggregate smaller capital commitments, $10 to $25 million from many different strategic LPs where in aggregate, we actually have a lot of money. We have $3 billion dollars to deploy. We get access to the best solutions. And by virtue of getting access to all those solutions, we can connect them to now 110 of the world's largest real estate owners.

So that fragmentation you mentioned is somewhat of an explanation of why Fifth Wall’s consortium has grown so much, which is it's irresponsible almost for real estate owners not to have a strategy around tech and innovation. And at the same time, it's very hard to do it yourself. And those two things, I think, explain why Fifth Wall has had the success it has.

Tom:

Yeah, you bring scale to the investment. It's very hard in a fragmented industry for any one player to make the kind of investments that you can make and have the visibility with all the different technology that's out there.

There was one of your portfolio companies that recently was acquired by one of your limited partners, which was Industrious was acquired by CBRE. I wanted to talk a little bit about Industrious, what led to that acquisition by CBRE, and then maybe delve a little bit into office as well. Because I think when you think about commercial real estate today, five or six years ago, there was a negative sentiment around retail. That's changed. We'll talk a little bit more about retail, but office is what's creating a little bit of a negative halo around commercial real estate in some ways. So, first, just Industrious. What is Industrious, the synergies with CBRE and what led to that acquisition? Then we'll delve a little bit more into the office market.

Brendan:

Yeah. And it's a good segue because it's, it's truly like a crossover business because it's partnerships with large retail landlords and office companies. But let's start with the transaction itself. So Industrious, which is the, I would say today, the dominant player in flex office, which is a fancy way of saying coworking. They have emerged as the dominant player. And I say they've emerged in some ways in like a David and Goliath type story because six, seven years ago, the only company anyone wanted to talk about was WeWork. And all of the top VCs in Silicon Valley and a lot of the large real estate companies were pouring money into this business. I think between SoftBank and Fidelity and all these venture investors, they raised about $13 billion. And at one point the valuation was $47 billion. And effectively, WeWork just tanked. It went bankrupt twice. And it went bankrupt in spite of absolutely nailing what is a very obvious secular trend, which is the transition in the office industry and the demand for more flexible leases and more kind of shorter term, more flexible subscription-like structures in commercial office leasing. So, it's odd that a company would fail despite perfectly nailing that trend.

And the reason they failed is, I would say somewhat predictable, which is there was a mismatch in the duration of its assets and liabilities. They were signing these really long-term leases, creating obligations for themselves with landlords, oftentimes at very high rents. And they were chopping that up and granularizing that and selling that off to WeWork tenants. And that model worked really well until it didn't. And once it didn't, there was effectively a run on the bank and they couldn't cover their liabilities and they went bankrupt.

Industrious was, in some ways, a response to that which is, Industrious said, let's not sign long-term leases. Let's actually sign management agreements so that we don't have a fixed obligation to pay. We're effectively, it's almost like the hotel model, but applied to office real estate. So, we're going to manage the space for you. We're going to create the experience for tenants. We're going to market it. We're going to operate it. We're going to keep the coffee hot. All of that is done by Industrious, but the landlord makes the rent. They just collect a management fee.

And in so doing, they were able to grow more scalably and more durably. Fifth Wall was actually the only VC that invested in Industrious. We helped structure a bunch of big distribution deals. Actually, the very first retail distribution deal was with Macerich, one of our strategic LPs where they opened in a number of their locations. We did a bunch of deals with Hines and related and other groups. And then CBRE made a strategic investment in Industrious about two years ago, about $300 million investment. And they announced early this year, about a week and a half ago, they're acquiring the business entirely. And it's a great exit for Fifth Wall and for the investors. And I think a good validation also of the ecosystem that we've built, because Fifth Wall Securities, our captive merchant bank, they actually advised Industrious on that sale to CBRE, which is one of our strategic LPs. So it was an awesome deal for us.

Tom:

Fifth Wall Securities is—just because you made reference to that—you've recently launched that as a new line of business to provide capital markets, M&A advisory services. Just touch a little bit about that, Brendan, because I think that's a novel concept as well.

Brendan:

It's actually pretty similar to what firms like Raine or Allen & Company have, which is, we have our funds business. We have about $3 billion dollars that we manage in our venture funds business. We have a new Flagship Fund. And then right alongside that, we have our merchant bank, which can do basically anything and everything to help our portfolio companies, help our strategic partners, but basically acts as a banker to all of those entities. And in so doing, we get better deal flow. We get better insight. We get better intelligence that allows us to make better investments. And in some ways, we can be like the connective tissue within our ecosystem. And I think the Industrious deal is a perfect example. It's like Fifth Wall invested in Industrious. And we then helped broker CBRE's strategic investment in Industrious. And then we helped sell Industrious to CBRE and it was the center of the bullseye in terms of what we envision for Fifth Wall’s business.

And the reality is more venture funds are going to have to start doing things like this. It's no longer enough just to show up with capital and expect to win deals. You have to really be able to create value for your portfolio companies and we do that at Fifth Wall through our strategic relationships but also in rolling up our sleeves as an advisor and as a banker as well.

Tom:

Well, you develop deep relationships with the management team of your portfolio companies too. So, there's a level of trust, I presume when you're, when they're looking to take that next step towards an exit.

Talk a little bit, your perspective, because the Industrious model is, to your point—WeWork had the concept with flexible work arrangements, Industrious had a slightly different business model, didn't take on the long-term balance sheet type of risks that, that WeWork did. But there's obviously a perception out there that office is a very challenged sector. And I think there's some truth to that. I work in Midtown Manhattan and the level of traffic in Midtown Manhattan is not what it once was, although changing and seems to be improving. Just your outlook around the future of office. Are we going back to 2019 at some point or is it something new that's going to evolve as we move into this five years now from the height of the pandemic?

Brendan:

It's a great question. And I would say maybe first starting with the premise of the question and like a bit of backdrop. I feel like every few years, one particular asset class is provoked with some existential question. When we started Fifth Wall, it was actually retail. It was like everyone was predicting the death of retail. And I remember talking to a lot of retail CEOs who told me the death of retail has been predicted many times over, whether it was catalogs or the internet. And it doesn't seem to die. Meaning, yeah, sure. Maybe there was too much inventory of lower quality retail space, but at a truly existential level, I think authoritatively we now know retail is a necessary component of our economy, brick and mortar retail, and it's here to stay and brands get that. And Amazon and e-commerce is not a panacea and it's not what everyone thought it would be 20 years ago. And yes, the future is more complicated, meaning everything I just said is not as crystal clear as anyone would like it to be. And these things all blend together and omnichannel and all of that matters. But the reality is brick and mortar is here to stay. And that same conclusion almost certainly is going to be what we realize around office.

Today, everyone is talking about the death of office and do we have too many office buildings and can we convert them? And yes, meaning there's elements of that are true, but we just lived through a very unique social experiment where we figured out we could functionally run our businesses remotely. But we also have learned, or at least I have, I feel like every CEO that I talk to has also learned, that running remotely has huge drawbacks to it. And being in office is really important.

And we're now in this seesaw moment where the contours of where you can be in office and how much you should be in office and what hybrid means. All of that is being explored right now by companies in real time, but office is always going to be here. And there's also a tendency to paint asset classes with a broad brush in the same way that people were predicting the, the death of retail, saying, oh, the U.S. has—I forget what the stat was—like 1,200 malls and it should have 600. Yeah, because those are the lower quality malls that maybe shouldn't have been malls in the first place. Yeah, they might go away, but the higher quality malls, you can't get space in.

The same thing is true with office buildings today. The highest quality office buildings that have great experience for their tenants, you can't get space in them. Where we are in Hudson Yards, this place is leased. There's huge demand for the space. So, I think what it does, it accelerates flight to quality. It pulls the future forward.

But I am actually optimistic about the office industry, even though it is today dealing with all of these big, challenging, doomsday questions about what's going to happen to it.

Tom:

In some ways, it forces everybody to invest more in—appropriately invest in their properties to keep them, to make them competitive. It's also a little bit of an omnichannel moment in a different way, right? I mean, the omnichannel moment in retail was the interaction of e-commerce and physical retail, which has clearly taken place significantly. Here it’s the integration of hybrid work. Hybrid work by definition is somewhat of an omnichannel type of thing, working from home, using technology and then working in the office. It'll be fascinating to see how this all plays out. Obviously, the valuation of some of the property that is underperforming could be the concern that I think people have.

Brendan:

And both trends are tailwinds for technology. Because when you think about what retail landlords did around omnichannel was they invested in their spaces. And that meant reducing friction around everything from tenant build out to payment systems to Wi-Fi. And that was—created huge demand for technology that Fifth Wall and lots of VCs were big beneficiaries of. And right now, you're seeing that play out in office as well. All the biggest landlords are thinking about how can I invest in the experience of my space in a way that's truly differentiated?

And it sounds like you heard Jamie yesterday on CNBC from Industrious. What he was talking about is why CBRE did that deal. And CBRE did that deal because they believe that, as the largest operator of real estate space on earth, experience is what matters. And experience is very hard to create. And experience touches on many things, operations, technology, branding, people. And I think more and more landlords are going to see themselves in the experience business. And the retail industry got a taste of that first and now the office industry is going to get a taste of that. I think we'll start to see that in other asset classes over time.

Tom:

As part of the competition for talent and so forth. You mentioned, Brendan, just retail in all of this. ICSC is heavily engaged in the retail industry. So just your perspective around Proptech within retail. We talk about the macro trend of the integration of e-commerce and physical retail and all the things that have—ship from store and click and collect and curbside pickup, etc.

But beyond that, the influence of Proptech in retail, your thoughts on that?

Brendan:

Well, I'm going to say we can talk about this for probably 20 podcasts of all the different opportunities, but I'll just focus on one that people oftentimes miss, which is just incremental revenue that retail landlords constantly miss. Just take EV charging, and we oftentimes get the feedback from landlords that we tried EV charging and it didn't work. And we would look at the actual numbers and say they really tried the wrong solution or the wrong provider, and they're just losing lots of money of potential EV charging revenue that they could have brought in. So, like EV charging, massive opportunity for the retail industry. Wi-Fi, massive opportunity to generate incremental revenue from tenants. Even things like small cell networks and edge data centers where there's actually demand inside malls, all those things are typically being neglected by the largest landlords for no other reason than they don't even know where to start or their teams just don't have the access to the companies that want distribution into them.

So, I would just say, yes, there's tons of solutions around property management, facilities management, and cleaning and robotics and security. All of that, I think, we invest in and continue to be big trends. But for an industry that I think is now stabilizing, they should be looking for ways to generate incremental revenue from non-obvious sources. And that could be from virtual power plants to EV charging to better parking. And technology represents a solution for all of those things.

Tom:

Retail is multifaceted. There's obviously sub-sectors within retail, malls, open-air, urban retail, etc. Open-air retail in particular right now is on fire, like grocery-anchored open-air retail, suburban open-air retail. And one of the biggest challenges is just a lack of supply for the demand that's out there right now. You mentioned, Brendan, AI and just the opportunities around AI. There's been stuff in the news this week around AI and some of the announcements from China and so forth around competitors around AI. Just your thoughts around AI and the implications for AI within commercial real estate broadly? Not necessarily—you can pick any subsector you'd like—but how do you perceive that impacting an industry that is very physical and very long-lived? It's a long-lived asset kind of industry, right? You're making a big bet for a long-term investment.

Brendan:

Yeah, maybe I'll actually focus less on the physical side of it and more just on the process side of it. Just, if you're in the real estate business, you're in the business of selling space. They sell that space through leases. But signing a lease and executing a lease and marketing to a prospective tenant is super complicated and involves lots of low grade, high frequency processes that are extremely redundant and inefficient inside organizations. And we see across the entire Proptech landscape, a huge number of companies that have applications to basically make it better, faster, easier, cheaper, more transparent to lease space. And that I think is going to be where you first see the impact of AI. We're already doing this with a few of our LPs. We invested in a company called Taylorbird that does very fast renderings for CapEx projects that you could do in multifamily. And it has just sped up the process of design and engagement with contractors and proving out the return on equity of certain CapEx projects. And it's eliminated just huge cost centers for multifamily owners.

And you're going to see that in every aspect of commercial real estate operations. I'm just focusing on leasing because it's so obviously inefficient. It'll be everything from accounting to legal to facilities management is going to be touched on by an application layer of AI.

Tom:

Actually, listening to you made me recall, I recently saw an AI presentation where it was a blank retail space and using AI, you could visualize what it might look like in different applications, whether it was a use for a restaurant or use for some type of boutique, etc. And that helps make capital allocation decisions in regards to the build out and what it's going to look like and all those types of things.

You mentioned transaction processing. Do you see blockchain playing a role in that? Obviously, blockchain and crypto always get mixed up together. But blockchain is unique and has an opportunity to potentially provide more security and transactions and so forth. Do you see that playing a role in kind of the transaction level within real estate or it's too soon and even now yet?

Brendan:

It's too soon to know for sure. We've explored a huge number of solutions around blockchain and every aspect of the real estate industry from title insurance to leasing to mortgages to non-traded REITs. We've looked at every aspect of it. I think the challenge is that crypto and blockchain is something that everyone is looking—it's almost like it's a solution in search of a problem when it comes to the real estate industry. Because where crypto and blockchain are most effective is in low trust environments. The reason we have Bitcoin is it's trustless. Most real estate transactions, whether that's leasing space or getting a mortgage or buying and selling a house, they're not really low trust. You're not dealing with a counterparty that you don't know. In fact, you're oftentimes dealing with counterparties that know each other really well that are intermediated by agents that know each other really well and are super institutional. So, in the spectrum of transactions, real estate represents about as high trust and ecosystem of transactions as you could possibly have. And for that reason, the need for a solution that facilitates transactions in a low trust environment, which is definitionally what crypto and blockchain are for, it just isn't there yet. I don't want to rule it out long-term, but I think that's been the consistent challenge around crypto and blockchain.

Tom:

Real estate by definition—a lot of people don't realize this, is how relationship-centric it is. It's a true relationship business and probably the most relationship-centric out of all the commercial real estate sectors is retail, which is one of the reasons ICSC exists, to bring people together to do deals.

Talk a little bit about urban planning and just the use of Proptech in that. I asked this in multiple dimensions. There's a constant conversation around the building out of smart cities and how technology may play a role in that. And of course, the city that you and I are very familiar with, Los Angeles, has just gone through a terrible crisis and has to do a significant amount of planning as they look to rebuild. Is there a technological aspect that could make, on either dimension, that process a lot more efficient and effective than what existed 25 years ago?

Brendan:

Absolutely. And to be clear, not all of that is technology. When you think about future proofing assets, whether that be a whole residential development or a mall, only some part of that is actually technology. But I would say, I think about it as there's, one, call it the socio-political, socio-economic issues, everything from housing affordability to congestion and congestion pricing, zoning, all of that. Yeah, I'd say tech can have some influence on that, but those are more probably political economy problems than we would delve into.

The next layer is around energy and sustainability. There are ways to future proof assets, whether that means just greater energy efficiency at the asset level, more sustainable building materials, more resilient building materials when it comes to natural disaster or fire events or water events, and even just energy resiliency and redundancy, right? So having stationary batteries and micro grids and virtual power plants and solar generation on premise and EV charging. So that's the second layer, which is feature proofing around energy and the energy transition.

And then the third layer, I think is future proofing around digital infrastructure, which is most of the assets we built before we had the internet and before we had cellular networks. And those are just things you would design differently. Everything from how you would have fiber access to a building, to whether you would actually have edge compute inference data centers at an asset. All of that now represents an opportunity to reimagine space.

I'm not sure LA is going to be the perfect canvas, nor the Palisades, given the tragedy of what happened there. I'm not sure that is the right place to implement all of that. But I do think it represents a moment to, I would say, ask some of these more provocative questions around like how could we design this in a way that is future proofed around some of these big social and economic and cultural questions around the energy transition and around digital infrastructure and kind of the digital future.

Tom:

You mentioned sustainability and I know you're talking very eloquently about the decarbonization of commercial real estate. Any comments you want to share on that topic? Because that's—real estate by definition is a big user of energy and often a topic of conversation around sustainability.

Brendan:

Real estate is, I feel like we've made this point a lot, that real estate is the single largest CO2 emitting industry in the world. And that reality has now dawned on people, and I think more real estate companies are focused on sustainability and on decarbonizing.

I think the flip side of that is we're under a new political administration, and that has a very different perspective on climate. I think a lot of the kind of net zero commitments that were tailwinds for climate tech, say two years ago, three years ago, I actually think a lot of those have shifted towards headwinds.

Now that doesn't mean that climate tech is going away as a category. I think it just means that for the foreseeable next, call it, two to four years, there's not going to be the same sentiment momentum behind it.

But the imperative long-term for the real estate industry to decarbonize, that's not really based on any kind of partisan matter. That's based on just good economics. Like over time, landlords that are able to make their assets more energy efficient are going to be able to lease space better than their peers that don't, simply because there'll be a lower occupancy cost. So even if you forget the kind of ethical imperative of climate tech and climate investing and decarbonization, there's just good business sense behind it as well.

Tom:

The economics will drive a lot of those decisions. Looking to the future and looking in 2025, 2026, you’re a big allocator of capital and will make a lot of investments. The broader transaction market and commercial real estate has been a little muted over the course of the last couple of years, but there is a lot of allocated private equity capital out there, a lot of an interest in doing deals. The cost of capital has been a challenge.

Do you have any outlook just, given the amount of capital that's out there waiting to be deployed, do you view 2025 or 2026 as potentially a year where M&A type of activity, activity in the commercial real estate industry and perhaps more broadly picks back up again?

Brendan:

I just don't think I have the expertise to speculate on real estate capital markets. I can talk about our capital markets, which I think we're already seeing activity pick back up. ‘23 and ‘24 were exceptionally challenging years for venture capital markets, for real estate capital markets. So, definitionally for real estate tech capital markets, Proptech markets, they were very hard.

But at the end of last year, we saw the first Proptech IPO that we've seen in 30 months, a company called ServiceTitan, one of Fifth Wall's biggest investments, went public. It's traded up 45%, trading at a $9 billion market cap. It's a very good beacon of what's to come.

The second fact that I think is a good indicator is you have this exit where Industrious sold to CBRE, just under a billion dollar transaction. We actually closed our—the first closing on our next Flagship Fund with some big strategic REITs coming in, groups that are like Federal and Kite that we've been wanting to work with for a while from the retail space and other large REITs like Public Storage and Camden and groups like that.

You're seeing signs of a thaw in capital markets. It's too early to say that we're out of the rough waters, but I feel optimistic about ‘25. And when I think about venture investing in particular, venture capital investing is extremely vintage driven and timing sensitive and we're entering an environment where you have very few active venture investors and lots of really good tech companies that just survived a nuclear winter in capital markets, which is exactly the recipe you look for when you're trying to generate outsized returns. I don't know how much of that translates to real estate capital markets, but I imagine there is a corollary there, but that's just what I'm seeing in Proptech markets.

Tom:

That's quite helpful. We're almost at the end of our time, Brendan. Just final thought, looking out at the future of commercial real estate, the future of Proptech. Any final thoughts you want to share with the listeners?

Brendan:

I guess the thing I would say is there are more opportunities for innovation inside real estate companies and, thinking about your audience and retail companies, there's more opportunities for technology integration and adoption that can actually help your business today than there ever have been. So, I would just encourage landlords that maybe haven't had a strategy historically to figure out a strategy as to how you can get access to the best technology solutions. Whether that's a Fifth Wall or something else. Just, it's an amazing time right now to adopt all of these solutions, all this free R&D that the venture capital industry has provided for the real estate industry.

Tom:

The one thing that’s for sure is technology will constantly be moving. We've seen that over the course of the last 25 plus years and it will be constantly evolving. ICSC is very focused upon that as well. We're going to launch a Proptech conference at our Vegas event in 2026. Hope to work with you guys on that as well-

Brendan:

Yeah, would love that.

Tom:

-and many of our members. It was such a privilege and we could have talked for a lot longer. There's a whole bunch of things that we just scratched the surface on your expertise and perspective is so valued. So appreciate you spending time with us today.

Brendan:

Yeah, thanks, Tom. Appreciate it.

Tom:

Please follow and rate this podcast five stars on Apple and Spotify and share it with others that might find it interesting. Thanks for listening.