Startup spurs commercial realty appraisal with big data, AI
[THE INVESTOR] The real estate market has been undergoing a number of disruptions, as firms like Airbnb and WeWork are changing the landscape with their tech-driven services and space arbitrage.
What is coming next in the sector, according to an article written by two Bain Capital Ventures executives earlier this year, is likely to involve real estate leveraging emerging technologies such as Internet of Things technology, spatial visualization, big data and platforms to manage services and transactions.
However, when it comes to Korea the traditional approach continues to rule the roost when it comes to realty transactions. Raymond Chetti, who has more than seven years of consulting and brokerage experience, plans to change that by leveraging big data, machine learning and artificial intelligence for commercial property transactions through his firm CRE Korea, Commercial Real Estate Korea.
CRE Korea co-founders Chris Sponagle (left), Phil Choi and Raymond Chetti pose for a photo after winning 1st prize at WeWork Labs/Oracle’s Demoday and 3rd prize at Startcon/KOTRA’s Demoday at Global Mobile Vision 2018.
An American who moved to Korea in 2011, he knows about the frustration in dealing with commercial real estate and its appraisal system in Korea. About a year ago, when he was helping a client to sell a commercial building, he realized a huge gap between how buyers and sellers evaluate properties. Chetti was frustrated with the expensive appraisal service that no one seems to trust and began to ponder on ways to provide accurate and reliable appraisal information.
Although the big-data driven appraisal segment is still in its nascent stage globally, it has been gaining a lot of attention. Chetti says it is a proven business model in the US and is sure that it would work in Korea.
He launched CRE Korea in August with 35 million won (US$31,050) from an angel investor, with which he made a prototype of the Value Report, which is an upgraded equivalent of a “desktop valuation”. In less than three months the startup has expanded to a 14-staff team including three advisors.
“CRE aims to provides accurate valuation of commercial properties and predict future trends by leveraging big data, machine learning and artificial intelligence. We are the funnel that is gathering and analyzing any and all data related to the price of commercial real estate,” Chetti said.
“It is very easy to get data on residential properties in Korea from various sources such as the Land Ministry and other resources such as multiple listing services. But it is difficult for commercial properties because you need a network, and must have access to the primary source of data.”
As there is no API, or application programming interface, for commercial building transaction data from the land ministry, CRE gathers information from dozens of sources.
“Our ultimate goal is to help buyers and sellers of commercial properties save money and time,” he noted.
In addition, CRE's platform would also help some 124,000 real estate agents and 5,5780 appraisers in the country, as it would increase the liquidity of the market by getting rid of bias and helping incumbent players work more efficiently, Chetti said.
CRE plans to raise 1.5 billion won in seed funding by the year-end to spur its soft launch in the first quarter next year.
By Park Ga-young (firstname.lastname@example.org)