The Real Deal New York

Commercial leasing data crowdsourcer CompStak to launch revamped service

NYC startup secures over $1M in angel financing, set to expand into other U.S. markets

January 21, 2013 06:00PM
By Hiten Samtani

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From left: Michael Mandel and Vadim Belobrovka

Everyone from biotech startups to Budweiser to Harvard professors and artists has employed crowdsourcing—relying on the knowledge of a vast number of people—to solve problems. CompStak, however, brings the wisdom of crowds to gather data on the commercial leasing market. Tomorrow, the service is launching an upgraded version that its creators say will allow for more granular searches and data that is more carefully vetted.

CompStak was founded in January 2012 by former broker Michael Mandel and programmer Vadim Belobrovka. The company gives banks, private equity firms, brokers and landlords detailed records, or “comps,” of rent prices, square-footage, building income, tenants and other information which was traditionally scattered across several sources. Brokers (and anyone else who could influence comps) aren’t allowed to buy data; instead, in a virtual barter system, they can acquire it in exchange for information.

“We want to encourage our community of users to participate as much as possible,” said Danny Shachar, CompStak’s director of operations and marketing. “Sometimes it’s easier for people to pay for information, but that would mean we’d have less comps to work with.”

Mandel estimates that the startup has detailed information on close to 50 percent of Manhattan’s commercial leases over the past decade and 99 percent of comps on Manhattan commercial transactions from the past year, based on estimates of the total square footage on leases signed in the year.

The version released tomorrow will allow brokers to see the history of comps for a given space, Shachar said. They can search by tenant or submarket, and compare older data to newer data to make a more informed decision. The new system is also better at validating comps, he said. Though the user base is still “only in the 100s, rather than the 1000s,” Mandel predicts that this will increase as more people realize the service’s value.

In the coming year, CompStak plans to buttress its data on retail properties; the service provides hard-to-get metrics such as street frontage and corner location. Though there are plans to expand into the five boroughs, the current priority is to launch in other cities, Mandel said, with a San Francisco launch tomorrow and several other cities to follow. “We want to roll out with this, and bring transparency to commercial real estate.”

The company’s four-person core team operates out of a small space at 36 Cooper Square in Noho, a building whose current and former tenants include the Village Voice and Foursquare. CompStak was able to overcome the chicken-and-egg problem that many startups struggle with by ensuring the site carried valuable data from the get-go.

“There were a lot of people that I knew from my time as a broker that I got using the system,” Mandel said, referring to his five-plus years at Grubb & Ellis. “We just needed to have one piece of data that people couldn’t get somewhere else.”

The money—Mandel estimates CompStak will rake in roughly $1 million in 2013—comes from selling enterprise licenses to real estate investment trusts, banks, private equity firms and other companies.

Since launching, CompStak has brought on most of the city’s landlords as clients, including Tishman Speyer, which uses the service to help price office space and gauge the value of potential investments. Representatives from Tishman did not immediately respond to a request for comment. Mandel added that a proportion of brokers, researchers and appraisers from every major Manhattan firm use the service.

Compstak has also secured more than $1.1 million in funding from 26 investors, Mandel said, including Expansion VC, the venture-capital arm of the Melohn family; Ryan Slack, co-founder of PropertyShark; and Berman Venture Capital, a wholly owned subsidiary of Rockville, Md.-based real estate investment company Berman Enterprises.

Lee Zapis, a principal at private equity firm Zapis Capital, said that he regrets the decision not to invest, which was motivated by concerns that larger brokerages would forbid their brokers from contributing. “I kicked myself for not pulling the trigger with them,” he said. “I liked the premise of it, of data wanting to be free, and there seems to be a strong pull for that kind of service.”

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