Blackstone Group’s real estate division is making its first investment in a real estate tech startup, paying $3.3 million for a stake in New York City-based leasing and portfolio management company VTS. The deal values the three-year-old startup, formerly known as View the Space, at about $35 million, and co-founder Ryan Masiello told The Real Deal today that Blackstone had been looking to establish a new standard in the leasing business.
“Before they even realized who VTS was, they had come to the conclusion that there needed to be a new standard for owners and brokers to communicate better,” Masiello said. VTS co-founder and CEO Nick Romito added that although the startup wasn’t looking for more cash, having already raised about $9 million, the deal with the private equity giant gives them a lot of horsepower.
“It gives us access to their entire technical, financial and real estate teams,” Romito said. The news of the investment was first reported by the Wall Street Journal.
VTS now hosts about a billion square feet of office space on behalf of landlords and brokerages, including well over 100 million square feet in New York City, as TRD first reported. Clients like SL Green Realty, Vornado Realty Trust, JLL and CBRE use it to oversee all aspects of the leasing process, including tracking rent rolls, analyzing performance and reporting.
“They’re entrepreneurial, so when we have suggestions, they immediately implement them,” said Blackstone managing director Jacob Werner, who is joining the board of VTS. “And they have a great vision of where the industry is going.” Blackstone has nearly 100 million square feet of office globally, with about half of that in the United States.
Masiello said VTS would hit about 1.3 billion square feet by the first quarter, excluding the additional business from Blackstone. The market “has directly or indirectly decided that VTS is the platform,” he said. “It’s going to be pretty hard for anyone to put a dent in that number.”