1. Brandon Dobell bdobell@williamblair.com, 312-364-8773
October 2016
Brandon Dobell

2. Backdrop For Disruption – 6 Consumer Behavior Trends
Immediacy: Consumers expect things to happen faster, more accurately, and in a more user-friendly and automated way; the advent of mobile and apps has amplified this concept. (Instacart, Amazon Prime [one- click ordering], Grub-Hub)
No information/privacy concerns: Consumers amenable to putting their personal information online, which we believe will accelerate (and eventually cement) significant migration to self-service in real estate. (Facebook/Instagram, retail beacons, online mortgage applications, trusted traveler programs)
Customization/curation: Consumers expect information to be customized or curated for their specific needs and wants, while extraneous information, redundant processes, or unorganized touch points carry the risk of alienating the consumer (Pinterest, Twitter, Houzz)
Mobile: Computing power in phones and tablets, shared workspaces, telecommuting, accurate geo- locating software, and other factors will continue to drive mobile adoption, in our opinion. (Expedia, OpenTable, Zillow, Uber)
Ratings/feedback loops: Consumers tend to rely on reviews and ratings as a key factor when deciding to purchase a product or service, and we see no difference as it relates to selecting an agent. (Yelp, Amazon/Alibaba reviews, Facebook)
Sharing economy: Consumers have become increasingly comfortable sharing rather than owning, be it cars, apartments, office space, or even clothes. Just a few years ago, it would have been hard to believe the amount of sharing (information, products, etc.) that is now commonplace in today’s economy. (Uber, Airbnb, Zipcar, Rent The Runway)

3. Big Picture Trends Shaping Real Estate
“Moneyball”—predictive analytics for real estate
Regulation – consumer protections in particular but also for banks/lenders
Who owns the data/content?
Breaking old models—separating transaction management from the advisor/broker
Urbanization, & the intersection with the sharing economy
The industry remains one of the last large, consumer-facing industries to undergo radical transformation since the proliferation of handheld smart devices that have enabled a new set of expectations for the typical consumer

4. Residential Real Estate Pain Points
Consumers
Agents
Brokerages / Franchisees
Efficient search process (not seeing what you don't want to see…but missing something that might be the right fit)
Marketing/ advertising
Lead routing
Commissions paid versus value provided by agents
Which potential buyers/sellers are real (or not)?
Listings management
Tours and walk-throughs
Transaction management
Consistent service across agents, offices, franchises
What is the right price?
Listing syndication/ marketing
Agent recruitment/retention
Choosing the right agent
Mobile
Listing Process
Source: William Blair

5. Rental Market Pain Points
Consumers
Property Owners and Managers
Complete and accurate availability, pricing information for local markets
Differentiation from competing properties
In-person visits
Efficient, measurable use of marketing and advertising spending
Application process
Diligence on prospective tenants
Deposit, rental payment process
Onboarding new tenants
Package receipt
Revenue maximization (price and occupancy)
Service requests and confirmations
Expense controls Property upkeep Vendor management
Source: William Blair

6. Commercial Real Estate Pain Points
Owner
Occupier
Broker
Financier / Investor
How do I find the right tenants?
How do I find the right space?
How do I find new customers/win deals?
Collateral value/risk management
Should I sell the building?
What should I pay and what terms can I expect?
Getting clients the best price (listings)
Cash flow expectations
What are the going rent rates and terms?
Workplace efficiency/ design
Client retention/value-added services
Tenant credit quality
Accounting systems
Negotiating deals for and with clients
Supply dynamics
What is my building worth/should I sell?
Transaction management/CRM
Rent rates
Should I manage the property or facility?
Relative cap rates/ portfolio management
How can I lower my expenses/bills?
Deal sourcing
Source: William Blair

7. Huge Industries, Not Much Market Cap
$34B in Technology Market Cap
$39B in “Services” Market Cap

8. Disclosures