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. Yesterday CBRE, the world’s largest commercial real estate services and investment firm announced the acquisition of Floored, a 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.
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 here 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 are 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 up 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’s, 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.
Michael Mandel, CompStak
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 our lease data by subscribing to our 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.