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I won’t pretend to be sitting here with a crystal ball and it might be observation bias but what I believe is actually happening is that people are confusing crossing the chasm from early adopters to early mainstream.

During this transition period there’s a lot of questions. As early adopters have tried every application with a value proposition, they now have an opportunity to step back and assess what they have in front of them. They are finding there are a lot of great apps out there, some of them have overlap, but generally speaking they provide a lot of value.

To the early mainstream, the value overlap is a source of contention because their job isn’t to gamble on software but to buy best in class, as the phrase goes, “Nobody ever got fired for buying IBM.” The problem is that the IBM of the latest commercial real estate tech hasn’t necessarily emerged, leaving those institutional real estate investors utterly confused.

I still think now is a great time to be a CREtech founder, with the only difference being that buyer personas are becoming increasingly sophisticated. Buyers are rightfully concerned about application connectivity, it’s great that apps provide specific data analysis but how does that fit into the larger picture. Hightower is doing integrations better than anyone, they even have a dedicated landing page, for their integrations with MRI, JD Edwards, and Yardi. I’ve always said the next generation CREtech business development deals were going to be done with API’s and it thrills me to see it happening.

Next, there’s still a lot of green pasture in CREtech. Here’s a freebie; building owners get it now that with building automation systems there are energy savings but the real gravy is in operational benefits from remotely diagnosing issues and avoiding unnecessary truck rolls, the ROI is clear. A building owner’s choices for BAS are basically Tridium or frankenstein together your own from multiple IoT providers. Guess what, Tridium costs a lot. So they’re putting together different systems throughout the building. What’s the big deal? Nobody and I mean nobody, is stopping and thinking about cybersecurity. Hackers can take down your HVAC, that might be annoying or critical if in a lab or data center, but no one is thinking about how their buildings automation system could be interconnected with other networks. If your tenant gets hacked due to your building automation system network, good luck filling those vacancies.

So yeah, there’s opportunities out there. Not all startups have reached product market fit and many never will. But if you’re a real estate guy or gal than you have grit so you won’t feel bad when the market tells you to suck it up and pivot. If you’re here for a bubble ride, then the door is getting narrower.

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REtech is really competitive for attracting talent, at the time of this writing there are over 1,500 job openings. Before you quit your brokerage job to reinvent your career, let’s take a look at why this industry rocks.

For starters, workflow automation software and smart building technology have proven ROI, startups are flush with cash, real estate is no longer an alternative asset class and is projected by some to reach as high as 20% allocation of institutional portfolios from the 8.89% now, CRE technology spend is approximately 3.0% of revenue and has room to grow before reaching financial technology spend of 5.7%.

At the moment, there’s probably no one more familiar with the current CREtech financing and job market than Rich Sarkis, Cofounder of Reonomy. The company recently closed a $13M Series B financing with lead investors Bain Capital and Primary Venture Partners. Venture capital is clearly saying CREtech has reached the prime time; Rich explains why you should too:

Commercial Real Estate represents the last great bastion of the global capital markets ecosystem. This is a market that has seen very little disruption and innovation through technology. When you combine the sheer size of this multi-trillion dollar asset class, the ability to solve real pain points for thousands if not millions of customers, and the opportunity to get in on the ground floor you have something really special. High talent folks are starting to figure this out and take notice. – Rich Sarkis, CEO of Reonomy

The Reonomy team is wasting no time hitting its user acquisition stride and hiring the best talent. Just a year ago, Reonomy was a 12 person team but now the head count is over 40. Tech industry veterans are catching on too, Chris Fischer formerly of Shutterstock where he was VP of Technology Operations from inception to IPO is now Reonomy’s CTO and Brooks Pettus recently joined as the companies first COO.

For those coming from outside of the RE industry there can be a learning curve to domain expertise. To overcome this challenge, Reonomy has implemented an employee onboarding process whereby company values and product/domain expertise are transferred, plus the employee welcome wagon includes company lunches, sweet Flatiron office space… oh yea and I hear a company bar is on the way.

Now that you’re sold on joining a REtech startup for the opportunity or the perks, where should you work? Well, I have some data for you… I collected ratings from Glassdoor, salaries and equity from Angel List, and openings from company sites. For a copy of the original analysis, hit me up: @tonydominguez or check out the raw data.

REtech jobs by the numbers

Business Development, Finance, DevOps, or Data Science

Airbnb is hard to beat. At a massive scale they have kept a 4.5 employee rating on Glassdoor and above average industry salaries.

Favorite Glassdoor Review:

“The food program is unrivaled and very well balanced. Every meal is made in-house with a variety of options (ie vegetarian, gluten-free, etc). “

Customer Support

Appfolio has a 4.5 Glassdoor rating and slightly above average salary of $42,000. They might have the best Glassdoor review too…

Favorite Glassdoor Review:

“I’m really not sure where they have found THIS MANY upbeat, intelligent, hardworking, and all around awesome people, but it feels like stepping in to the twilight zone of happiness. “

Design, Product

Managed By Q isn’t messing around when it comes to hiring savvy designers at a $140,000 salary and 0.10% equity component but if vested interest is more your thing than FLUX offers $125,000 with 0.30% equity. Can’t go wrong either way when industry average is $100,000 and 0.15% equity.

Product jobs are where things get interesting, $175,000 salary and 0.10% equity vs $137,000 industry average salary and 0.14% equity.

Favorite Glassdoor Review:

“Q is a great place to work if you want to have an impact.”

Software Engineer

RealtyShares and LendingHome are offering $150,000 average salary vs industry $104,000. SWE’s know their worth, so OppSites is offering 1.50% while Snapdocs and WorkOrder.es are offering 1.00% equity for early engineers.

Favorite RealtyShares Glassdoor Review:

“The revenue growth leaves no doubt about the product-market fit.”

Marketing

HomeLight has a perfect 5.0 Glassdoor rating and provides $100,000 salary vs $63K industry average. However, HomeLight is “light” on the equity portion with 0.2% while WorkOrder.es is 1.00%.

Favorite HomeLight Glassdoor Review:

This is a startup, so something new and challenging every day. Probably not for those looking for a “normal” 9 to 5 job.

Operations

TheSquareFoot has a $112,000 average salary vs. $61,000 and yet another perfect 5.0 Glassdoor rating – notice a trend? To make things sweeter, the equity is 0.20%, which is slightly above the average of 0.13%.

Favorite Glassdoor Review:

“Very agile and driven company with talent at all levels.”

Sales

Established CMBS data provider Trepp is offering the best salary in sales at $120,000. If it’s startup equity you’re looking for Snapdocs salary is $100,000 with 1 point of equity, not a bad deal.

Favorite Trepp Glassdoor Review:

“I love that there are a number of women who work in upper management/executive positions, including the CEO.”

Lastly, here are a couple more companies I would still consider given these Glassdoor reviews…

Apto:

The company has a strong leadership team and a unique company culture that goes beyond “we do happy hours.”

RealtyMogul:

The stock has gone up 50x since I started and is going to make me pretty wealthy. I even got an unsolicited second stock grant from the CEO for my performance.

Matterport:

(Revenue + Funding + Talent) x (Lots of Unsolved Problems) = Huge Opportunity

Now get your resume out there and tell them I referred you

Airbnb
AppFolio
Apto
Aquicore
Architizer
Argus Software
AssetAvenue
Auction.com
Brevitas
CommonFloor
Compass
CompStak
CoreLogic
CoStar
coUrbanize
CrowdStreet
Curbed
DebtX
eBrevia
FieldLens
Floored
FLUX
Fundrise
Genea
Hightower
HomeLight
HonestBuildings
IndoorAtlas
IrisVR
Lenda
LendingHome
LendInvest
LiquidSpace
Lovely
Managed By Q
Matterport
MetaProp
Mission Capital
MRI Software
MyVR
officespace.com
Opendoor
OppSites
onefinestay
Patch of Land
PeerStreet
PiinPoint
Pillow
PlanGrid
propertybase
PropertyShark
ProspectNow
Real Capital Analytics
RealDirect
realogic
realpage
RealtyMogul
RealtyShares
Redfin
Reesio
REIS
RentHop
Rentlytics
Reonomy
REscour
ResiModel
REthink
Roomi
ShareDesk
SiteCompli
Snapdocs
Storefront
TheRealDeal
TheSquareFoot
TransitScreen
Trepp
triplemint
VTS
VivaReal
Voyanta
WeWork
WiredScore
WorkOrder.es
Xcelligent
Yardi
Zoopla
Zumper
Zillow

The post Who’s Hiring? – REtech Jobs Edition appeared first on Anthony Dominguez | CREtech.

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“Most people probably know a majority of CRE tech startups are coming out of New York or San Francisco. What they don’t realize is there are a cluster of CRE tech companies here in Atlanta. There have been multiple CRE tech startups started in the last 2 years. To me, this makes sense since so many CRE companies have offices or even regional and national headquarters in Atlanta.

I think the reason Atlanta gets overlooked is people don’t realize that Atlanta has a phenomenal tech startup community with more than 700 tech companies, over $300 million per year of venture capital flowing into town, and 11 top ranked engineering programs at Georgia Tech. Needless to say we aren’t lacking talent around here and the tech startup community is so strong in Atlanta due to the help of great incubators and coworking spaces like Tech Square Labs and ATDC, which is one of the top 12 incubators in the world and headquarters for REscour. Atlanta is also home to 16 Fortune 500 companies for close access to large customers, 270,000 college students, a low cost of living, and low labor costs. It seems to me Atlanta is actually one of the best places to start a CRE tech startup. “

Jake makes a compelling argument and REscour is doing big things, so I don’t take his words lightly but another smart friend of mine put it like this, “The population of San Francisco is 800,000 and New York City is 8,000,000; you do the math.”

Being the geek I am and having recently created a map of the CREtech ecosystem, I crunched the numbers.

This is not designed to be 100% comprehensive. If I missed something, tweet me at @tonydominguez.

As always, my research is open source.

Observations:

• Airbnb is responsible for 90% of California’s REtech funding.
• Auction.com is one third of the funding in Greater L.A. but even still, who knew that was a great place to start a RE startup?
• While Cali may have funding on lock at over $4.5B, New York has the largest amount of companies AND most funding when you back out Airbnb.
• There aren’t enough companies abroad attacking the REtech space, but Bangalore is still number five.
• Perhaps it’s unsurprising that the Midwest has the most bootstrapped startups.
• NYC has the most sophisticated real estate investors per Real Capital Analytics

“If I got to choose a coast, I got to choose the east. I live out there, so don’t go there.”

I’m going with what Biggie said. So, if you’re bold and working in REtech, come visit me in NYC.

The post Where Should You Start a RETech Startup? appeared first on Anthony Dominguez | CREtech.

Newsflash: Owners pay brokers. Create value for owners, and brokers will have no choice but to adopt your platform.

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Using the Wayback Machine, here are the earliest screenshots at the given dates.

Loopnet – Nov 9, 1996

Yardi – Dec 23, 1996

Argus – Dec 26, 1996

CityFeet – May 10, 2000

CoStar – May 31, 2002

Xceligent – Dec 1, 2002

PropertyShark – Aug 19, 2004

REIS – Sep 20, 2004

Auction – Nov 3, 2009

HonestBuildings – Nov 12, 2009

MRI Software – Feb 9, 2010

Money360 – Jun 28, 2010

LiquidSpace – May 15, 2011

MatterPort – Sep 30, 2011

Fundrise (Originally Popularise) – Jan 4, 2011

Apto – Jan 16, 2012

LendInvest – Feb 25, 2013

RealtyMogul – Apr 3, 2013

CompStak – Aug 15, 2013

VTS – Dec 16, 2013

Hightower – Dec 30, 2013

The post A Brief History of CRETech appeared first on Anthony Dominguez | CREtech.

Who benefits?

Office landlords, brokers, and tenants.

Problem

Office space repositioning is capital and time intensive and asset valuation is drastically impacting the longer the vacancy period. Potentially 30-60 days of rent loss is accounted for tenant build out specifications.

Solution

Fast Office reduces vacancy by automating tenant fit tests and visualizing the exact deliverable for renovated space. By showing an exact rendering of space and budget, Fast Office can accelerate lease signing by one to two months, which drives yields in a meaningful way on a portfolio basis.

What makes them unique?

At 45, Bob is the youngest founder at Fast Office. That’s a good thing because they have extensive industry experience across all spectrums of the leasing workflow. From moving, design, and brokerage; Fast Office’s founders have been part of the office game for decades.

Who benefits?

Commercial office owners, property managers, building engineers, and tenants

Problem

After normal business hours, landlords are either unnecessarily running HVAC and lighting systems or not offering tenants after hours HVAC. In addition, landlords are not properly recovering energy related expenses from tenants. Both inefficiencies hit NOI and property valuation hard.

Solution

Genea offers cloud based management for administration of HVAC and lighting systems and real time tenant usage readings every 15 minutes for accurate billing.

What makes them unique?

Genea’s After Hours Control System (ACS Cloud) is patented and the only provider for generating automated electronic invoices based on building services data.

Who benefits?

 Lenders, investors, occupiers, and brokers.

 Problem

 There is a lack of transparency in leasing data. Data is disparate and there are few standards for combining private and public data sources. Things get even more complicated in Europe, where there are 16 major markets, each with their own data standards. As such, in depth analytics are unavailable for reporting trends and surfacing gaps in the market.

 Solution

DealX uses a point-based system to crowdsource leasing data from occupiers, brokers, and investors. Then they verify the private data with public sources and make the merged data available with a two way API. Investment banks are some of their early users using it to underwrite commercial loans and verify tenant credit.

What makes them unique?

 The founder Joseph Kelly founded Real Capital Analytics’ European division and saw first hand the lack of transparency in commercial lease data. He made it his mission to lower the bar to access reliable CRE data through API’s.

Who benefits?

Property investors and investment sales brokers.

Problem

Too often brokers and buyers are just throwing sh*t at the wall and seeing if it sticks, the result is stringing everyone along and a complete waste of time. The marketability of the asset becomes fatigued and real buyers get dissuaded from making strong bids.

Solution

Brevitas vets each prospective investment sale asset for institutional quality and proven representation, likewise buyers are scrutinized for access to funds. The platform is only comprised of highly qualified and sophisticated investors.

What makes them unique?

Brevitas is not looking to be everyone and their mother’s marketplace. Brevitas is a highly curated for market participants that show proven ability to close.

Who benefits?

Tenants and building management.

Problem

Building management can’t fix a problem if they don’t know about it and tenants can’t easily collaborate even if there are natural synergies between them.

Solution

Skyrise mobile app creates a direct link between building administration and tenants. This creates a more efficient and transparent environment for all building stakeholders. Now office buildings can deliver faster services for their tenants and promote themselves as concierge. In addition tenants become part of a private building social network where they can discuss collaborative initiatives.

What makes them unique?

Tenant collaboration is something you often get only in a co-working space. Skyrise gives the WeWork experience in an app so that tenants create partnerships which in turn means higher tenant satisfaction and longer leases.

The post 5 CRE Startups So Good You Can’t Ignore Them appeared first on Anthony Dominguez | CREtech.

It seems that every CREtech article including mine has the same theme and should all start with TL;DR – The real estate industry stands to benefit massively by making static processes dynamic. Done. You never need to read another CREtech article again. You’re welcome.

We should be consistently challenging our assumptions and reassessing the state of CREtech. With that in mind, I challenge you to think contrarian about a few reoccurring statements I see in social media and blogs.

“We must eliminate all real estate inefficiencies.”

What if the real estate industry likes market inefficiencies? Perhaps real estate investors are profiting immensely from keeping rent comps close to the vest or marketing investment sales to a small group of highly qualified buyers. The internet at its nexus is about sharing and I more than anyone want to see that come to fruition but I’m also a realist. A large part of real estate investing is beating the competition through economies of scale and having better info than the next guy. Yet you also need friends and confidants to collaborate with because this is a relationship business. The “off-market” marketplace companies understand this dynamic very well.

“Brokers need a cheaper alternative. ”

LoopNet increased their prices, big whoop. I’m sorry to say it but a cheaper alternative to LoopNet is not a strong enough value proposition. The costs are negligible for most full-time brokers when compared to the power of LoopNet’s network. Just do a Google search for “Broadway Manhattan for lease” or any variation and most likely LoopNet is in the top five organic search results. You will never out LoopNet at being LoopNet. Although, I suppose the Google founders Larry and Sergey could’ve said the same thing about Yahoo when they started. Google’s experience was 10X better through quality of search. Focus on that – not costs; but hey prove me wrong.

“Commercial real estate is a tech laggard industry.”

Here’s the granddaddy of them all. This was so true less than three years ago…but I’m starting to feel differently now. Firms are still using tech products, just not necessarily industry specific ones via Dropbox, Salesforce, LinkedIn, Google Drive and more. Leasing management platforms have now paved the way for proving return on investment in commercial real estate tech. Additionally, firms are developing technology in house like JLL’s HiRise and making investments such as CBRE Group and Avision Young in LiquidSpace. Real estate firms are increasingly looking to startups, venture capital, and consultants for solutions. Maybe tech adoption is lower than we’d all like but at least the industry is self-aware of it’s own problem. Now it’s on smart entrepreneurs to execute on big ideas.

“CREtech is disrupting a multi-trillion dollar market.”

CREtech companies dangle trillion dollar markets in front of venture capitalists and journalists. I like the way it sounds too. Sure the valuation of all cumulative real estate is trillions of trillions of dollars but the amount spent on technology is quite another thing. Using the tippy-top valuation of $26 trillion and assume it’s owned at a 10 cap, that’s $2.6 trillion of NOI and if we further assume 1% of firm revenue is spent on technology that is roughly a $26 billion dollar market – still a lot of money but not quite as sexy as trillions. But enough harping on the dollar amount, it’s also the term “disruption.” Disruptive innovation creates a new market and value network – Peter Thiel refers to it as going from zero to one. There’s nothing wrong with incremental or bridge technology because it leads to better things. To say the present state of CREtech is “disrupting” commercial real estate is a stretch – but keep it in the pitch deck.

If you have any other contrarian CREtech ideas you would like to share, please let me know in the comments. Thanks for reading.

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Some caveats:

This ecosystem map is not designed to be 100% comprehensive. It’s more to understand all the different spaces within CREtech. I am biased towards startups in the space. If I am missing something tweet me @tonydominguez. This space is developing quickly so take this into consideration. I left out marketplace companies in the map, as that would be an entire analysis itself.

Enjoy!

Observations:

• In 2012 and 2013 the funding for CREtech grew 189% and 726% respectively year over year. The growth in funding in 2014 and 2015 YTD dropped to 20% and 34%.
• Debt Origination is a significant portion of the CREtech ecosystem due to venture debt financing.
• Due to Auction.com investment; Stone Point Capital is the largest CREtech investor at over $91MM followed by Google Capital at $50MM. The next largest is RRE Ventures at $35MM having invested in Hightower, TheSquareFoot, Managed by Q, and Floored.
• Risk Management / Property Insurance is a very underrepresented space and highly automatable, just look at what Zenefits has done for human resources.
• Using number of companies as sole metric, Research / Analytics and Marketplaces are starting to become saturated.
• There are surprisingly few commercial hybrid brokerages; Compass was not included in this analysis as they do residential.

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