In a post-Covid world, VTS is betting on remote leasing.
The New York startup launched its much-hyped VTS Market on Tuesday as an online marketing platform where owners and brokers can see office listings, take digital tours and, eventually, complete the entire leasing transaction.
“The way people were marketing space pre-Covid has to be different from how you market now,” CEO Nick Romito said, describing broker lunches with passed-around collateral. “Now, you can’t compete unless you have a digital option.”
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VTS Market is built into the company’s core offering of cloud-based leasing management software, meaning the data will come directly from building owners to ensure accurate and timely information.
The company said landlords Brookfield Property Group, RXR Realty, Hines, Oxford Properties Group, and Empire State Realty Trust have already signed on as clients. “This will be the new place people go,” Romito said.
The launch’s timing is fortuitous: VTS Market has been in the works for more than a year. Last May, VTS closed a $90 million round, led by Brookfield Asset Management and GLP, to fund development of the marketplace.
The round valued VTS at more than $1 billion, seven years after it debuted as a marketing service called View The Space. VTS evolved into cloud-based leasing portfolio management software that now claims to have 12 billion square feet of space on its platform.
Romito said that in a sense, VTS Market brings the startup back to its roots. In general, commercial real estate has lagged behind the residential market when it comes to aggregating listings because there are no multiple listing services for CRE.
New York is the only major U.S. city without an MLS, but in most cases MLS systems feed listings directly to third-party sites such as Zillow or Realtor.com. In commercial real estate, data giant CoStar has long been the only option for searching listings.
VTS does not disclose revenue, but Romito projected the new marketplace would be “as big or bigger” than its existing products. “You’re talking about truly giving the entire market a platform they should have had for a long time that’s at the level of other industries,” Romito said.
VTS has been dabbling with online leasing for two years. As early as 2018, it was preparing to launch a business to allow landlords and tenants to negotiate relatively small and simple leases without a broker.
In a departure, Romito said VTS Market will only be available to brokers at first because they are the ones working to get would-be tenants off the sidelines and back into the market. “For now, tenants are not searching on their own,” he said. “Brokers control 90 percent of the demand in the market.”
On VTS Market, each listing contains building information, notable tenants, available space, amenities and location data. In addition to availability and lease terms, listings display headcount options for every room. Digital tours start with lobbies and elevators, which are increasingly important to potential tenants. Later this year, VTS will add remote leasing options.
“The move to a modern, online marketing and leasing platform has been a long time coming,” Ben Brown, a managing partner at Brookfield Property Group, said in a statement.