These Star­tups Are Bring­ing Com­mer­cial Real Es­tate Into 2017


Com­mer­cial real es­tate is be­hind the times.

That might come as a sur­prise, es­pe­cially since the in­dus­try is val­ued at $12.6 tril­lion. Thank­fully, a grow­ing com­mu­nity of tech star­tups is be­gin­ning to ad­dress com­mon is­sues that plague the in­dus­try.

Just weeks ago, Hightower and VTS, soft­ware so­lu­tions that help real es­tate pro­fes­sion­als and own­ers man­age the sales and leas­ing of prop­er­ties, an­nounced a $300 mil­lion merger to com­bine both ser­vices un­der the name VTS. The com­pany fo­cuses on help­ing real es­tate pro­fes­sion­als track deals and man­age space in real-time, and col­lab­o­ra­tively. Re­cently CBRE, the world’s largest com­mer­cial real es­tate ser­vices and in­vest­ment firm an­nounced the ac­qui­si­tion of Floored, an NYC-based com­pany that cre­ates in­ter­ac­tive 3D graph­ics and tech­nol­ogy for the hos­pi­tal­ity and real es­tate in­dus­tries

Be­sides VTS and Floored, a num­ber of ven­ture-backed star­tups have re­moved some of the old pain points that were in­her­ent in the ag­ing world of com­mer­cial real es­tate. Here are a few of the other com­pa­nies whose in­no­va­tions are mak­ing a dif­fer­ence at var­i­ous points along the chain of real es­tate ser­vices.

For Ten­ants

Pre­vi­ously, search­ing for com­mer­cial space was a daunt­ing process that in­volved you, your bro­ker and a set of listings

that your bro­ker had ac­cess to. Op­tions were lim­ited and the mar­ket wasn’t trans­par­ent be­cause of a lack of data. 42Floors helps ad­dress these is­sues by ag­gre­gat­ing many dif­fer­ent sets of listings and dis­play­ing them on its on­line plat­form. Users can then search for ap­pro­pri­ate rentals through the com­mer­cial space in­dex.

NYC-based startup Square­Foot sim­i­larly pro­vides users with a plat­form that ag­gre­gates on­line listings but takes it a step fur­ther. The com­pany of­fers leas­ing ad­vice, and bro­kers serve as concierges who fo­cus their ef­forts on guid­ing busi­nesses through the en­tirety of the leas­ing process. As a bonus, fea­tures built into Square­Foot’s plat­form al­low bro­kers and ten­ants to eas­ily com­mu­ni­cate, share notes, sched­ule tours and man­age ev­ery­thing on­line.

Ac­cord­ing to Jonathan Wasser­strum, Square­Foot’s CEO, “Tech­nol­ogy has up­ended many parts of the CRE value chain al­ready, and the re­la­tion­ships be­tween ten­ants and bro­kers are no ex­cep­tion. So when it comes to the level of ac­count­abil­ity and trans­parency that ten­ants ex­pect from their bro­kers, that bar is ris­ing.”

But what about hav­ing to phys­i­cally walk through a space in per­son? Floored de­vel­oped a so­lu­tion to this prob­lem by build­ing soft­ware that turns 3D data into in­ter­ac­tive virtual worlds. Mat­ter­port is sim­i­lar in that it cre­ates VR ren­der­ings of the in­sides of prop­er­ties, but it also al­lows any­one to ac­tu­ally cre­ate the 3D mod­els us­ing a spe­cial depth-sens­ing cam­era and share them over the In­ter­net. Both com­pa­nies are de­vel­op­ing ex­cit­ing ways to ex­plore a place as if you were re­ally there.

For In­vestors And Cap­i­tal Seek­ers

Com­mer­cial real es­tate trans­ac­tions aren’t ex­actly known for being cheap. But there’s a sig­nif­i­cant com­mu­nity of in­vestors that is will­ing to foot the bill for new projects that they con­sider to be worth­while, prof­itable in­vest­ments. But where do you find them? For years, that’s where the con­ver­sa­tion stopped. Cadre en­tered the scene in 2014 as a plat­form that con­nects seek­ers and providers of cap­i­tal. In Cadre’s own words, the com­pany is “build­ing a more ef­fi­cient econ­omy for the world’s most im­pact­ful buy­ers and sell­ers.” For those in­ter­ested in go­ing the route of crowd­fund­ing, com­pa­nies like Real­tyShares and Fun­drise are open­ing op­por­tu­ni­ties for in­vestors to pool their re­sources and in­vest in prop­er­ties through their re­spec­tive on­line plat­forms.

For Bro­kers And Land­lords

Manag­ing mul­ti­ple deals from start to fin­ish is a time-in­ten­sive busi­ness. The con­cept be­hind Hon­est Build­ings is sim­i­lar to VTS’, but it is made for those over­see­ing cap­i­tal and con­struc­tion projects. The collaborative plat­form har­nesses the power of data an­a­lyt­ics to help pro­fes­sion­als make sure projects are pro­gress­ing on time and on bud­get. Good data about pric­ing, comps, prop­erty in­for­ma­tion and more is a non-ne­go­tiable in the world of com­mer­cial real es­tate. But for years, it’s barely been pos­si­ble to ac­cess such data, and if you did, it would cost more time and dol­lars to pull any helpful in­sights from it. That’s where com­pa­nies like Cred­ifi and

Reon­omy come in. Cred­ifi is bring­ing trans­parency to the in­dus­try by mak­ing avail­able data on 2.2 mil­lion prop­er­ties and loans, while Reon­omy of­fers pow­er­ful an­a­lyt­ics to help cus­tomers make faster, more in­formed de­ci­sions.

Com­pS­tak’s wedge into the mar­ket is a plat­form for the ex­change of com­mer­cial lease com­pa­ra­bles, more com­monly known as comps. Bro­kers, ap­prais­ers and re­searchers can trade their own comps for cred­its on the plat­form while land­lords, lenders and in­vestors can ac­cess lease data by sub­scrib­ing to the En­ter­prise plat­form.

The CEO of Com­pS­tak Michael Man­del pre­dicts “2017 will bring more M&A ac­tiv­ity than we’ve seen in re­cent his­tory, with ma­jor es­tab­lished CRE Tech play­ers try­ing to scoop up the in­no­va­tors. My guess is that some of these get folded into the par­ent com­pa­nies, but oth­ers will con­tinue to run in­de­pen­dently.”

It’s an ex­cit­ing time to be in real es­tate. Tech-fu­eled in­no­va­tions are mak­ing deals and projects hap­pen faster and more fre­quently not just on the res­i­den­tial side of real es­tate, but the com­mer­cial side too—and that’s great news for busi­nesses every­where.

Jonathan Wasser­strum, Square­Foot

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