real estate

Top 15 Most Influential People in Real Estate Technology 2015

In honor of our upcoming 2015/2016 Demo Days, MetaProp NYC presents:   

The first annual list of the most influential in NY real estate tech:

  1. Jared Kushner of Kushner Companies and Josh Kushner of Thrive Capital

    • These two power brokers control millions of square feet in NY, and are among the earliest adopters and champions of all things real estate tech including startups like: WeWork, Compass, Cadre, Honest Buildings, and WiredScore.

  2. Zach Aarons, Clelia Peters and Aaron Block of MetaProp NYC

    • The most prolific angel in real estate tech, one of NYC’s top residential brokerage minds and an ex-Cushman executive teamed up with REBNY, ICSC, the NYCEDC, Warburg Realty and Zillow to launch this real estate tech startup accelerator and the #1 global RETech seed fund.  This team also produces NYC Real Estate Tech Week.

  3. Nick Romito of VTS and Brandon Weber of Hightower

    • Founding entrepreneurs and competitors who are lighting the commercial real estate tech world on fire. Future of CRE could be here.  Both companies have activated old-line institutional partners (Blackstone, Newmark Grubb Knight Frank Corp, etc.) and have raised significant Series B capital from blue chip venture funds.

  4. Robert Refkin and Ori Allon of Compass

    • Ex-Goldman Sachs and ex-Google founders who built a tech enabled residential real estate brokerage powerhouse.

  5. Susan Daimler of StreetEasy/Zillow

    • One of the previous generation of real estate tech entrepreneurs who remains as relevant and influential as ever.  Currently GM of top residential listings site.

  6. Steve Schlafman of RRE

  7. Rich Sarkis of Reonomy and Michael Mandel of CompStak

    • Big shots taking on the goliath, publicly traded deathstar CoStar.  Michael’s CompStack democratized leasing “comps” and Rich’s Reonomy just completed a massive Series B with investors like Bain Capital.

  8. Michael Rudin of Rudin Management

    • 4th gen Exec who helps spearhead the 20m sqft portfolio's tech investments.  Incubating their own DiBoss building operations platform.

  9. Dave Eisenberg of Floored and Red Swan Ventures.

    • Widely recognized as one of the smartest entrepreneurs in the space.  The authority on interactive 3D graphics and space test fit technology.  Also investor in Hightower and other technologies through VC Red Swan Ventures.

  10. Bill Field of LeFrak Investments, Ryan Melohn of Expansion VC, Michael Milstein of Millstein Properties, Grand Central Tech incubator, and Circle Ventures, and Ryan Freedman of Corigin Ventures

    • Not as well known as the Kushners and Rudins but still very influential strategic investors.  These gentlemen invest real estate family money and help new technologies access pilots within their vast portfolios.  Local portfolio companies include Honest Buildings, Radiator Labs and LogCheck.

  11. Ryan Baxter of REBNY and Sarah Malcolm of ICSC 

    • You can't ignore the influence of real estate associations in the future of our industry.  Ryan Baxter is a lobbyist and liaison to the real estate tech community for industry association powerhouse REBNY.  He's recognized as a Crain’s NY 40 under 40Sarah Malcolm runs digital strategy for the global retail real estate association ICSC and maintains tight relationships with the local venture, start-up, media and real estate communities.

  12. Erik Levy of DMGI, Brad Svrluga of Primary Ventures,  and Jordan Nof of Tusk Ventures

    • Erik leads investments for the deepest investor in the real estate tech data space.  Holdings include Trepp, SiteCompli, and Real Capital Analytics.   Brad has been an early champion of real estate tech and investor in local startups Reonomy, Fieldlens, and TheSquareFoot. Jordan served as a director at Blackstone and now leads investments at Tusk Ventures.

  13. Riggs Kubiak of Honest Buildings

    • Ex-Tishman Speyer executive who invented the real estate market’s leading procurement and workflow platform

  14. Caren Maio of Nestio

    • Top female founder in today’s crop of real estate technologists.  Created NY’s leading residential listings system for residential real estate professionals.

  15. Ashkán Zandieh of CRE:Tech and Falkon

    • Founder of CRE:Tech research and consulting and property research app Falkon.  One of the original advocates for real estate tech in New York City. 

The Top 7 ReTech Publishers and the Entrepreneurs Behind the Curtains

The real estate tech industry is establishing some authoritative publishers, bloggers and thought leaders.  People always ask Zach, Clelia and me how to find more information about cutting edge real estate technologies.  So, here is a short list of sources who obsess about real estate tech and like to share their expertise.

The Top 7 ReTech Publishers and the Entrepreneurs Behind the Curtains

1) Inman News - Brad Inman created the gold standard residential and broker tech-centric publication.  Professional journalists going deep on both coasts.

2) Duke Long  - Duke Long lives up to his nickname as “The Godfather” of commercial real estate tech.  He’s a pioneer and opinionated thought leader who is a dear friend to most in the industry.  Duke also uses his massive network to periodically publish a number of useful “top lists,” including:

   a) Top 75 CRETech Companies

   b) Top 150 CRE People

   c) Top 10 Most Influential Online CRE People

3) CRE.tech - Travis Barrington’s latest publication is a late entrant into the dedicated real estate tech news space but Travis’ serious publishing chops position him as the institutional source for useful CRE tech news.

TheNewsFunnel - Media and tech entrepreneur Michael Beckerman aggregates great tech news from around the country and also creates tons of content in-house.  Best of all, he and his killer team regularly share the love to a huge list of followers.

RE:Tech - Entrepreneur Ash Zandieh was one of the first champions of real estate tech in NY and his research is widely cited in the media.

CRE // Tech - Corporate real estate bigwig Pierce Neinken’s labor of love not only hosts some of the biggest industry gatherings but it also regularly publishes amazing research reports for the CRETech community.

Metaprop NYC - Real estate technology’s most prolific angel investor Zach Aarons co-founded NYC’s real estate tech accelerator and the industry’s #1 seed fund in 2015.  His frequent musings on the MetaProp NYC blog are both provocative and insightful.

Technology to Play Big Role In Potential Tenant ID

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As mixed-use developers in America’s key gateway cities, retail is a huge part of our business.  At Millennium Partners, we typically sell residential condominiums on top of retail stores in the same building.  When we develop in transitional neighborhoods, retail and residential have a symbiotic relationship: the retail helps to enliven the neighborhood for the residents while the residents serve as patrons and shoppers at the retail stores.

Retail leases for our developments are usually signed before the residential condominiums have been completely sold.  Therefore, we often don’t know what type of retail the future residents will want below them because we don’t yet know who those residents will be.  When we look to lease retail space we have two primary goals: maximizing NOI for the asset and working with a tenant who will benefit the residents and the neighborhood as a whole.  Over the years our company has become pretty experienced at finding this balance and we have been fortunate enough to work with some of the best retail brokers in the business like Gene Spiegelman, Kazuko Morgan, and their teams at Cushman & Wakefield.

However, no matter how good your team is, there is always room for improvement in potential tenant identification.  Currently, retail trade shows like ICSC help developers and landlords keep their pulse on which tenants are in the market for new space.  It is helpful for us to understand questions like: Which retailers are expanding store count?  Which foreign retailers are looking to expand into the United States?  Which suburban retailers are looking to expand to urban environments?  Which tenants are doing well financially and can afford to pay the rents we want to charge?

I believe that over the next five years technology will play a more significant role in potential tenant identification than ever before.  Through big data platforms, landlords and brokers will be able to identify which tenants are looking to expand to new markets and what kind of rental rates they are looking to pay within each market.  Through online crowdsourcing techniques, landlords and brokers will be able to obtain feedback from local residents and community members about exactly what kind of retail they want in their neighborhood without having to implement costly and time-consuming surveys.  Offline trade shows like ICSC will expand their online presence to such a degree where landlords and brokers can “network” with potential tenants in an online setting as well as a physical convention center in Las Vegas or New York.

We are looking forward to seeing these new technologies materialize, as they will assist us greatly in continuing to enliven neighborhoods across the country.    

Basement Tech

If you are a landlord, there is something going on in your sub cellar.  Don’t worry.  It’s here to help.  I call it basement tech.  This is one of the areas of real estate tech that interests me most right now.  As a landlord, you want to have as much information as you can about what is going on in the building and the basement is where all the vital organs of the building typically reside; so you want to make sure that everything is copacetic with both your equipment and your team.  Until very recently, no one really used much software or hardware to track what was actually happening in a building...this has begun to change.

There are now software platforms and connected devices that can give property managers, engineers, and landlords a much better idea about how things are going below grade.  For example, software platforms like Ravti can help you manage HVAC procurement and maintenance.  LogCheck can help your property managers and engineers keep track of daily maintenance on equipment.  Senseware and other connected building sensor platforms can help you learn where the bulk of your energy output occurs and software like Aquicore can help you track and manage that energy output.  SiteCompli can tell you when you have an elevator inspection coming up, or something in the cellar that you need to fix and have re-inspected for compliance. Managed by Q can ensure that basements are spic and span and well managed.  These components serve to enhance what is the heart and mind of any building: the basement.

We are now entering an era where all of these platforms will begin to collaborate and talk to each other through a series of APIs (hopefully).  Within a few years a landlord will be able to open one dashboard and understand virtually everything that’s going on in the sub cellar of buildings.  Software will provide up to date readings on how equipment is doing and what needs to be fixed.  Predictive analytics will let you know when it’s time to upgrade equipment before the machines break down.    

Within ten years buildings themselves will be connected to technology in completely new ways. Sensors and connected devices will ultimately become woven into the curtain wall of newly constructed buildings.  This will enable tenants and landlords to save immense amounts of money on energy output.  A completely connected building would be able to sense motion and heat, sending signals about which parts of a building were more occupied than others, informing the HVAC solution whether to blow hot or cold air to different parts of the building.  Energy savings would be immense because you would only cool or heat a specific area of a building that needed it, no “zones” as they exist today would be necessary.  New connected HVAC solutions like Keen Home are now working to make this type of technology a reality.  

When people ask me what my strategy is for investing in real estate technology, I jokingly tell people that I want to own the basement of every building.  Since I can’t go around buying physical basements, I might as well invest in the future of what every basement will be using in five years.   If you control the heart and mind of something, you can control everything.  Although I am happy investing in software that helps the top of the building, I believe that the real money is to be found below grade...kind of like gold and oil.   

Why is Airbnb Worth $24 Billion and What Does it Mean?

The recent announcement that Airbnb was raising a new round of financing at a $24 billion valuation left many people outside the start-up and technology communities scratching their heads.  In fact, some of my friends in the real estate and hospitality communities emailed me when the news broke thinking that the press must have made a mistake and missed a decimal place somewhere.  They just couldn’t wrap their heads around the idea that a real estate company with no tangible real estate assets could command that kind of valuation from investors.  How does a platform for sharing real estate demand a much higher revenue multiple than a company that owns real estate?

I am not going to bother opining on the exact revenue multiple that Airbnb should have.  I am certainly happy that they are worth $24 billion (two of my investments, Localmind and Fondu, were both acquired early on by Airbnb).  However, I will let the far more sophisticated growth equity investors doing the deal set the valuation for me.  I am happy to be along for the ride. 

Nonetheless, I can say this with certainty: the fact that experienced, late-stage investors are willing to place such a growth premium on Airbnb shows that we are in the midst of a tectonic paradigm shift in the real estate industry.  Moreover, I believe that we are only in the third inning of a nine inning ball game.  The crux of this paradigm shift exists in how people conceive and inhabit physical space, and how people are able to maximize the efficiency and financial opportunity of that space, driving prices down for “tenants” while simultaneously creating more profit for “landlords.” 

This may seem like a contradiction but it’s not: when space is used more frequently and more efficiently, landlords can earn more money while charging less money to tenants.  This is the “holy grail” solution that exists when you merge collaborative consumption, on-demand services, and the shared economy with real estate.  This is the genius of Airbnb and it has galvanized an entire industry in its wake.  People can take unused real estate and turn it into occupied real estate.

In the olden days, the perception of space was rather rigid.  People lived in houses, tenements, or apartments, and they worked in office buildings, factories, or stores.  When they traveled, they would stay in hotels or hostels.  Airbnb was the first company to flip the script on this model, and more change is coming.  Because of technology, social networking, on-demand services, and collaborative consumption, all of these spaces can be used by people when they need them

Imagine a world where you can use a specific type of space only when you need it and you can pay for it by the hour or by the day?  This was the major innovation of Airbnb.  People thought to themselves: “I am going away for the weekend and no one is going to be in my apartment.  Why don’t I earn some money and rent it out?”

Now, this type of thinking is getting applied to other asset classes within the real estate spectrum.  For example, if you are only in an office for a few hours a week, why not book a Breather instead of getting standard lease on an office space? (Full disclosure: Breather is a portfolio company) Schools are vacant from 5 PM-6 AM.  Why not have dinner parties and other events in schools provided people are respectful and responsible?  Why can’t a hotel turn into an office building during the day, and vice versa?  When no one is in our conference room at work why can’t I rent it to others for an hour to have a meeting (i.e. using LiquidSpace)?  I only use my vacuum twice per week.  What good is it doing sitting in my closet when it can be cleaning someone else’s home or office and potentially earning me some money?  The list goes on and on.

An old saying in the real estate business is that land is a great investment because they aren’t making any more of it.  Today, this rings more true than ever with real estate prices skyrocketing and people getting priced out of places where they have lived for years.  However, although the earth isn’t making more land, people are beginning to think about how they use physical space in different ways.  Instead of conceiving of space as an owned or leased quantity, they are beginning to think of it as a shared quantity.  This shift will ultimately prove the most financially viable solution to solving the affordable housing crisis, ensuring that people have reasonably priced places to start small businesses, and providing people with the ability to travel and expand their cultural views on a shoestring budget.

So, in summary, I don’t have any idea what Airbnb should be worth.  What I do know is that the investors who are valuing it at $24 billion, whether consciously or not, are recognizing Airbnb as the initial catalyst for the largest disruption in the history of the real estate industry since the invention of the skyscraper in Chicago at the end of the 19th Century.  At MetaProp NYC, it is part of our job to educate the entrenched real estate industry about this seismic shift and show them that they don’t have to resist it.  We can also educate the technologists and startup community about how to approach people in the real estate community and explain the new ecosystem in relevant, appropriate terms.  No one has to go into hand-to-hand combat.  In fact, if done correctly, everyone can create additional economic and social value in this new ecosystem.  It doesn’t have to be a zero-sum game.

Why Did We Start MetaProp NYC?

It’s clear that 2015 was the right time to launch a real estate technology accelerator in New York City. 

Steve Schlafman from RRE Ventures once asked if I thought 2012 would have been a better time to do it.  I pondered that question for a while and realized it probably would have been a financial windfall to work with the crop of high growth real estate tech start-ups that three years ago were just starting out (VTS, Hightower, Managed by Q, Compstak, Floored, Compass, Honest Buildings, SiteCompli, The Square Foot, Nestio, Reonomy, etc.).  All of these companies, and many more successful NYC based real estate tech companies, germinated at this time and we could have had the opportunity to accelerate a few of them.  Now, the best of those companies have gone on to raise substantial financing rounds and are building very successful businesses. 

After some reflection, I would argue that a world class real estate tech accelerator would not have been possible in 2012 and, furthermore, is only possible in 2015.  For a domain specific accelerator to work, you need a few things to coalesce.   First, you need technological talent.  Second, you need capital.  Third, you need mentors.  Fourth, your portfolio companies need customers and clients.  Finally, you need more mature start-ups in the ecosystem.

In 2012, one definitely could have put together the talent and capital but not a large base of clients and mentors.  The industry was simply too nascent.  Landlords worked with software for property management (Yardi, Timberline, and MRI, etc.) but used very little innovative software for leasing management, compliance, HVAC, marketing, or construction management. 

In 2015, not only do you have landlords learning more about software, they are clamoring for it.  Dave Eisenberg from Floored mentioned to me on a panel that a massive business breakthrough for him was initially suggested by a client.  The fact that a real estate professional is that in the weeds with a technology product is a massive shift for the industry.  This shift has been brought about by a meaningful dialogue for the first time commencing between software developers and clients in this industry. 

In 2015 you also have mentors who have been through that dialogue.  They now intimately know the dos and don’ts of selling software to landlords, marketing software, hiring, raising money, and many other critical business building concepts. 

We assembled an all star team of mentors and corporate partners (including Zillow Group, Warburg Realty, DLA Piper, EisnerAmper and The News Funnel) to launch MetaProp NYC because we thought that this was a unique opportunity in time to bring together new founders, old founders, clients, and financiers together to accelerate businesses.  While the industry has matured quite a bit in NYC from 2012-2015, we believe that the software disruption of real estate is just beginning and will continue to push forward into the next decade as technology changes the entire process of building, leasing, and operating a building from top to bottom.