An old-fashioned science fair to showcase a wave of new innovation at MIT’s Real Estate Innovation Lab
It should come as no surprise the truly brilliant things that are happening at MIT, and in particular, the school’s Real Estate Innovation Lab. So what better format to display those innovations in than a good old-fashioned science fair? On the second day of MIT’s World Real Estate Forum, a packed room of industry professionals learned from some of the lab’s best and brightest researchers about just what they are working on and the impact of their findings.
At the crux of the lab’s research is the NYC Wide Data Project, which is just what is sounds like. By using a combination of public data, private data and data gathered directly by the lab, the project aims to link design and innovation to financial performance in the built environment, particularly through geometric, geospatial and relational databases. But what does that really mean? It means that they can combine and evaluate more than 4,000 variables to create a database that is unlike any other in the real estate industry, the likes of which would cost $1.3 billion to compile. In particular, the project combines data from public sources like the Department of City Planning, the Department of Transport and the Department of Finance with private data from Crunchbase, CBInsights, Compstak, Wired Score, Gensler, and even JLL. They can then look at any combination of data layers to make observations including: where are all the smart buildings? where are all the parking lots? or where are the office activity hotspots? Truly, there is very little the database can’t show with respect to real estate in NYC.
The interesting thing is that what’s happening with the NYC Wide Data Project, described as the “backbone of our operation” by one of the lab’s researchers, is feeding so many of the other projects that are also coming out of the lab. One such related project looks at innovation ecosystems and shared space in NYC. By providing an expansive view of shared spaces including co-working, accelerators, biolabs, and even food incubators, it seeks to determine where “sharehoods” are developing in neighborhoods across the city. The project aims to ask questions like: what is the relationship between start-ups and the spaces they work in? is space meeting demand or is there oversaturation? And what is the effect of agglomeration and how is that impacting where new economies are forming?
Another related project at the lab looks to examine how accelerator programs impact the financial performance of start-up companies. Using data from CBInsights and the REIL itself from 2005-2015, the project found that more than 3,500 firms with more than 7,600 funding events went through accelerator programs. Among the findings, the lab discovered that accelerated firms gain experienced investors at a much higher rate than unaccelerated firms. They also learned that accelerated programs receive 7.6-16% more in cumulative funding. Lastly, one of the projects other key findings, not surprisingly, was that “space really matters” when evaluating the financial performance of accelerated firms. Co-working space, shared office space and lab space all have positive gains in funding relative to no space being offered, while discounted office space has a negative relationship and actually ends up being hurtful for the young firms.
While many of those projects focus on the buildings and space themselves, no day at MIT is complete without talking about the latest and greatest technologies impacting those spaces, particularly, the Life Cycle of Real Estate Products derived from Gartner’s 2017 Emerging Technology Hype Cycle. This project looks to examine where in the cycle real estate innovations currently live, starting with an innovation trigger and going to peak of inflated expectations, trough of disillusionment, slope of enlightenment, plateau of productivity and ending at path to obsolescence. It should come as no surprise that the peak of the peak right now is co-working/shared working space. For this technology, hype is currently at a peak with the expectation that this will be a pure market disruptor. On the other hand, tiny homes are an example of a technology currently in the refinement stage, so hype has yet to reach a peak and the innovation itself is still in the early stages. It’s interesting to note that among all of the technologies that have been examined, the lab has concluded that, “technologies rarely die, but companies often do.” In fact, when studying 186 technologies introduced from 2005 to 2016, a surprising 90% of the technologies survived to market.
These are just some of the innovations and amazing work coming out of the MIT Real Estate Innovation Lab. We could really go on for days about all that is happening behind the scenes, and we are excited that as a founding partner of the lab, we get to contribute to and see these innovations first hand.
In case you are wondering who “won” the science fair, the NYC Wide Data Project took home the prize, with our own Head of Americas Research Ben Breslau serving as a judge. As Ben put it, data is truly solving the problems of today and the future, and it’s hard to argue with the impact that project can have in helping the real estate industry continue to do just that.