VTS debuts real-time data for commercial leasing

Figures show office market rebounding faster in NYC than elsewhere

VTS co-founders Nick Romito and Ryan Masiello (iStock, VTS)
VTS co-founders Nick Romito and Ryan Masiello (iStock, VTS)

As companies wrestle with the return-to-work question, VTS is arming landlords with a new tool: data that captures fluctuating supply and demand in real time.

The New York startup said VTS Data, which launched today, is a first-of-its-kind product for investors and owners, who have historically relied on anecdotal information and dated market reports.

“The commercial real estate market is a living, breathing thing, like the stock market,” said VTS co-founder and chief strategy officer Ryan Masiello. Without up-to-date data, he said, owners are making “billion-dollar bets based on lagging indicators.”

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VTS Data builds on the company’s core leasing management platform by utilizing information shared by landlord and broker clients. VTS aggregates and anonymizes that data, then allows customers to slice and dice the information as they see fit.

A “new demand index” captures how many tenants in the market are searching for space, as well as their industries, space and rent requirements. VTS Data also captures leasing velocity as a barometer for the overall state of the market.

The data only reflects activity on the VTS platform, not the entire market. But VTS says its platform is used to manage 12 billion square feet of space, or 60 percent of Class A office buildings in North America. CEO Nick Romito said accuracy of VTS Data is a reflection of the company’s growing market share.

The company, last valued at $1 billion after raising $90 million in May 2019, recently launched VTS Market, an online marketplace for listings and virtual tours.

VTS said the new data product is already being used by Eastdil Secured, Brookfield Properties and RXR Realty. Scott Rechler, RXR’s chief executive, said it represents a “new era for market data.”

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Until now, companies such as CoStar have relied on surveys to provide office leasing information. CompStak’s analytics tool uses crowdsourced leasing and property information.

Still, the office market has been upended by government stay-home orders and tenants’ remote-work policies, which threaten to leave many landlords with gaping vacancies. During the third quarter, Manhattan tenants leased 4.81 million square feet, just half of what was leased a year prior, according to a new report from Colliers International.

As of Sept. 18, three months after New York City allowed nonessential workers to return to their offices, only about 10 percent of Manhattan workers had done so, according to CBRE Group.

Although attendance remains low, VTS, which says 75 percent of New York City buildings are on its platform, says tenant demand in the city is bouncing back quicker than in other markets.

Between March 2 and 16, demand dropped 89 percent, VTS data show. But over the last three weeks, demand is up 94 percent with tenants seeking 907,000 square feet coming into the market.

Masiello also said New York rents are faring better than headlines suggest.

Base rents are down just 1 percent and net effective rents are down 7 percent. “Landlords are holding out, potentially waiting as long as they need to drop rents,” he said.

While tech companies are driving the stock market rebound, boutique financial firms are fueling New York’s office market, he said. (Indeed, Twitter and Facebook have extended remote-work policies while Goldman Sachs and JPMorgan have ordered employees back to the office.)

Initially, landlords will be charged on a sliding scale for access to VTS Data. “It’s a ‘give to get’ model,’ Masiello said, emphasizing that VTS relies on landlord leasing data to aggregate the data.

To spearhead the data offering, VTS hired Eli Gilbert, an ex-JLL and CoStar executive, as head of market research. Overall, the company has hired 70 new employees since the stay-home order in March.