Singularity and Real Estate

I am definitely not the Sci-Fi type, but after reading a Time Magazine article on Singularity, the fact that it is less than 30 years out makes it real and the implications very real. I am a father of four daughters, so I feel somewhat compelled to give singularity serious consideration. Basically, as I understand it, singularity is when computers become so powerful that they match the abilities of the human brain.

Singularity is “the moment when technological changes become so rapid and profound, it represents a rupture in the fabric of human history.” This really means that in 30 years, “We will have the means to create superhuman intelligence. Shortly after, the human era will be ended.”

So what’s the correlation between what goes on in 30 years and real estate today? What are the implications? Real Estate today and especially the Multi-Family industry is bogged down by conventional wisdom. Conventional wisdom is controlled predominantly by a generation focused on the “physical investment” – a tried and true way of investment. “Futurist wisdom” will prevail at some point where it is the people inside the physical investment that dominate the underwriting. Multiple income streams will include the value of the “asset inside the box” including social media/new media/banking/insurance/job search/advertising/technology.

My bull pen opinion is that the current generation of apartment operators is losing 20% - 100% of income now because of the lack of innovation in the whole investment process. Looking into the crystal ball, investment will be where rental income is dominated by other income streams.

If endowments/Family office/Freddie, Fannie & HUD/REITs are truly investing for the long term, principles are obligated to understand and adopt a new thinking about singularity. HUD loans are for up to 40 years, Freddie, Fannie & conventional loans are amortized over 25-30 years. The time is drawing nigh.


By Tony Brettkelly

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