Proptech Companies Are Circling a Tech-Resistant Architecture Field – Commercial Observer

When computer-aided design (CAD) programs such as AutoCAD were introduced, most architects and designers immediately began implementing the new technologies in their workplaces.

But that was in the 90’s.

SEE ALSO: Architect Thomas Juul-Hansen’s simple designs keep him very busy

Since then, technology hasn’t advanced much in their fields. Now, however, proptech companies are trying to speed up construction schedules with a new generation of digital tools aimed at helping builders, architects and designers be more efficient. But adoption of technological innovations has been mixed, experts say.

“In many ways, PassiveLogic was born out of the needs of architects,” said Troy Harvey, founder and CEO of PassiveLogic, a Salt Lake City-based digital twin platform that uses technology to make commercial, industrial and multifamily buildings more energy efficient. “How does the architect’s design of a building actually play out in terms of installation and construction and operations? Many of the projects we’ve done so far that really started our journey were done by architects.

“A lot of the deals we do now are with engineering and MEP (mechanical, electrical and plumbing) companies, as well as the operations and asset owners, as kind of a total package.”

The PassiveLogic technology suite includes Building Studio, a tool that enables users to design, model terrain, and simulate – all in one program.

“We cover that building lifecycle in one set of different tools,” Harvey said. “Different clients can come to us — whether it’s on the owner-operator side, saying, ‘I have a lot of buildings and I work with architects,’ and that goes back to the architects they work with — or as architects who need solutions for how their projects actually come to life, and not just being designed for value.

“In the middle is the MEP, or energy engineer, who works to get the project to LEED Platinum certification or similar, working first with architects and then with asset owners.”

Harvey noted that real estate technology innovations are being adopted by a broad spectrum of architects, contractors and owner-operators, but said such digital solutions need to be tailored to specific needs.

“So the gap that we saw is that at one end of the market, you have tools like Trimble, which has a tool called SketchUp,” he said. “It came out 20 years ago. It’s quick at sketching out your general ideas as an architect, but at the end of the day, it doesn’t know anything about buildings. You just have this raw geometry model. What you do today as an architect is you sketch out your general ideas in SketchUp, throw everything out, and then you go to another tool like Autodesk Revit (Revit building information modeling software) and do it all over again.”

None of these products work seamlessly from architect to structural engineer to installer, he concluded. “It’s a huge, labor-intensive process.”

Higharc, which describes itself as a “remote growth stage startup,” is focused on building a more efficient, automated, cloud-based home building platform. Michael Bergin is co-founder and VP of product at Higharc.

“We manage the data that’s required to build homes based on the buyer’s interactions, so they can specify all the options in their home and see the home customized like a video game,” said Bergin, an architect himself who previously worked at Autodesk, where he led the design automation research group. “We produce assets that show the buyer the home they’ve configured and the price if the builder has chosen to offer it.”

By digitally managing and generating data throughout the process, Higharc is able to reduce a two- to five-week process to a matter of seconds, Bergin said.

Unlike other real estate technology companies that treat architecture and design as separate disciplines, Higharc takes a different approach to the residential construction industry.

“We focus specifically on homebuilders,” Bergin said. “About a million single-family homes are built in the United States every year. About half of those are built in what’s called a manufactured community style, where you buy a piece of land and then turn it into a lot of different homes. All of those homes have options associated with them, and to the extent that we work with architects and designers, they’re usually either embedded with those homebuilders or they’re third parties who design homes with a lot of options and variations within them.”

While at Autodesk, Bergin worked on applying artificial intelligence (AI) to architectural design. In doing so, he realized the conflict between using AI and the underlying business model of an architecture firm: “It’s often a fee-based system that’s tied to the amount of time it takes and the number of iterations that go through the design.”

Bergin said that’s why architects have been relatively slow to adopt new technologies. “So,” he said, “if you could compress everything an architect does that’s really meaningful even in the context of a simple house into a very short period of time using AI, it almost negates a lot of the incentives that exist in the realm of architecture and engineering for the way the business model works today.”

Despite such resistance, Higharc is working with architects and designers, Bergin added.

“But typically, because manufacturing manufacturers operate at scale, they have to move very quickly. There’s a really significant deficit in terms of the number of homes that can be built in the United States each year compared to the demand in the marketplace. So they’re building a lot of homes and they still have to build more and more. Because of that pressure, we’ve found a really great entry point to apply automation and AI technology to this industry because homebuilders are incentivized to shorten that window of time that they call the soft cycle time.”

Two other real estate tech startups working in the architecture and design space are Brivo, a Bethesda, Maryland-based cloud software company focused on architecture and security design; and Monograph, a San Francisco-based design-focused project management platform for architectural and engineering firms.

The proptech trend has also reached Spain, where Ana Lozano Portillo is the founder and CEO of Nidas Lab, a startup that automates architecture and design using artificial intelligence.

“We launched in April 2023 as a result of a product that was really promising in another company that I own and founded a few years ago, which is a real estate consulting company,” Portillo said. “It came about as a result of identifying what we see as a major problem in the real estate industry, especially when it comes to early-stage investment prospects. Nidas was created to help developers, architectural firms and investment funds unlock the potential of a specific piece of land by automating and optimizing the design at an early stage.”

This involves analyzing the development area, urban parameters and commercial structure of a given project, she explained.

“In short, what would take us as an architecture firm to develop a design in the traditional way, four weeks to four months with a group of architects, we could do in less than 12 hours with a higher efficiency, including multiple versions of the design,” Portillo said. “This allows an investor or developer to compare different ideas for different architectural plans and different ways of testing the design, even commercially.”

Nidas, which is already operating with beta clients, plans to fully launch its “automatic design co-pilot” in the fall, Portillo said. The product could be used in Spain and France — and possibly the U.S. soon — by real estate developers, architecture firms, investment funds, and builders and contractors.

Like other founders of architecture and design firms in the proptech industry, Portillo has struggled with a lack of acceptance from clients in his home country.

“I think the U.S. market is more mature and ready to adopt this kind of disruptive technology than the European markets, even though the big European players are starting to look for new tools that will make their lives easier, especially in the problem we’re trying to solve,” she said. “The biggest differences are — you’d be surprised — the small number of competitors around the world. Some of them are based in the U.S. One is a big competitor, Testfit. And another is in Norway, Spacemaker AI.

As startups try to enter the architecture and design space, KP Reddy, founder and managing partner of Shadow Ventures, an Atlanta-based venture capital firm focused on high-risk technology, approaches the subject with some seasoned skepticism.

“Most of the deals we see are very unimpressive,” said Reddy, an engineer who previously worked with famed architect Frank Gehry at Gehry Technologies. “They’re mostly visualizations. And I would say the real, high-level conceptual stuff is the bulk of what we see — AI for architects.

“That said, our general position is that architecture is a pretty terrible market for startups. They’re not spending money, they’re charging by the hour, and they’re not innovating with their business model, thinking, ‘Oh, instead of charging by the hour, maybe I can do something different.’ It’s kind of like, ‘Well, this is how we’ve been charging for hundreds of years. We’re just going to keep charging the same way.’ But what’s interesting is that we’re seeing a lot more movement among other people using architectural design tools to avoid using an architect.”

According to Reddy, for real estate developers, resistance to technology is not a matter of saving money, but rather a search for time-saving innovations.

“They’re generally pretty dissatisfied,” he said of developers who constantly complain about how long development is taking. “So they’re starting to use some of these AI-focused tools to do a lot of their early projects.”

Reddy points to one of his portfolio companies, Icon, an Austin-based construction technology company that uses 3D robotics and software.

“They’re building a lot of other buildings now besides houses,” he said. “They’ve created a generative AI tool that you can talk to, like, ‘Oh, design me a three-
“A cabin with a bedroom or whatever.’ So you see some of these things, but if you think about it, they’re not aimed at architects. They’re aimed at the end customer, and they’re aimed at the builder.”

Designing technological tools for an architect can be a mistake, he continued.

“What’s working is creating an AI architecture tool not to work with an architect, but to work directly with an engineering firm, a construction firm, or an owner. I think this is really the first widespread use case of a real revolution in the industry because of AI, and not everyone is using AI to do their job faster. And I think that’s fascinating.”

Philip Russo can be reached at [email protected].