What execs at property tech startups have learned about NYC
New York market has provided plenty of surprises for managers at these fledgling companies
The Big Apple has put out the welcome mat for commercial real estate startups, as companies from across the tech sector flood into parts of Midtown South and Brooklyn’s so-called Tech Triangle.
Founders and CEOs from some of the hottest commercial tech startups spoke of their challenges and successes during a panel discussion Wednesday at the Urban Land Institute’s fall meeting. The Jared Kushner-moderated panel provided some insight on how these startups are changing the city’s real estate landscape, and what it’s like to work with, among others, landlords, property firm executives and brokers.
Here’s what these execs at young tech companies have figured out so far.
Behind the curve
Despite the excitement surrounding some of these technologies, panelists said some landlords and commercial brokerages have been slow to adopt tools and platforms to streamline their daily operations.
“Generally speaking, I think there is a massive amount of scar tissue in the industry in trying to deploy technology,” said Brandon Weber, founder and CEO of Hightower, a cloud-based leasing portfolio management company.
Unlike other industries, real estate companies are still grappling with how technology exactly fits into their business.
“In every other major vertical of a comparable size, software has to a large extent penetrated the day-to-day operations, and this is really just beginning in real estate,” said David Eisenberg, founder and CEO of 3D visualization firm Floored. “It’s a challenge today, to sit with an owner who’s thinking of their 2015 budget who doesn’t know what’s coming in terms of the technology and doesn’t know what costs it’s going to replace.”
No better place than New York
Silicon Valley and San Francisco may be the two poster cities for tech incubation and innovation, but New York City isn’t too far behind.
That’s especially true for real estate startups building their business in one of the most competitive markets around.
“New York really feels like the center of the universe when it comes to commercial real estate,” said Weber, who relocated Hightower from Seattle. “The startup ecosystem in New York is probably as vibrant as any other ecosystem in the country, and in terms of growth trajectory, it’s probably the most exciting.”
Arie Barendrecht, who’s firm WiredScore measures a building’s Internet capabilities, said there’s a demand specifically within the New York City real estate industry for these startups to set up shop in the Big Apple.
“Because of the vibrancy of tech in New York, and the fact that it’s the second largest driver of our economy and the fastest-growing, landlords want to know what they can do to attract those tech and creative companies,” Barendrecht said.
Success in sign-ups and square footage
While much of the buzz around tech startups has been fueled by large capital injections from investors, commercial real estate startups are reaching milestones in sign-ups and square footage.
According to Jared Kushner, whose spearheading the Wired initiative, there are more Wired-certified buildings than LEED-certified properties in New York City. Riggs Kubiak’s Honest Buildings crossed the $100-million mark in projects originated through the site early this year, and Hightower is on track to have 250 million square feet of office space on its platform by the end of 2014.
“It’s this constant evolution,” Kubiak said. “It’s going to be interesting to see how people evolve as they put their entirety of their budgets into this system in 2015.”