PropTech trends and strategies for landlords
Allen Matkins – March 9
A recent roundtable discussion hosted by Allen Matkins explored trends in real property technology (PropTech) and strategies for landlords to strategically leverage such technologies. Moderated by Isaac Chao, a Senior Counsel at Allen Matkins and a co-founder of the firm’s PropTech practice, the panel explored how the pandemic served as a catalyst for PropTech, the short and projected long term effects of PropTech on the real estate industry, and how landlords and other stakeholders can invest in PropTech. Guests included Zander Geronimos, Head of Partnerships & Business Development at MetaProp, a leading PropTech venture capital firm; Dave Garland, Managing Director at Second Century Ventures, the venture capital arm of the National Association of Realtors; and Eric Moxham, Chief Revenue Officer at IoT (Internet of Things) PropTech company Bractlet.
Camber Creek and Fifth Wall discuss PropTech’s rapid growth in enterprise value
Connect National – February 25
Among the numerous trends that were accelerated by the COVID-19 pandemic, few were ramped up more dramatically than the adoption of technology. “The pandemic made it obvious,” said Casey Berman, Founder and Managing Partner at Camber Creek. The need to accomplish remotely what had always been done in-person turned PropTech “from a nice-to-have to a must-have.” What had been a pace of “slow and steady change” was compressed into a month as lockdown orders took effect nationwide. Brendan Wallace, Co-Founder and Managing Partner at Fifth Wall, said that the past year has been the first in which commercial real estate has accepted a more technology-driven approach as “the dawn of a new age.” It is a far cry from 2016, when Fifth Wall raised its first fund. That year, real estate companies spent about $3 billion on technology. Four years later, the annual spend had increased more than tenfold to $32 billion.
In the pandemic, online home-buying picks up speed
The New York Times - February 19
First-time buyers have the tech-smarts and now the tools to do all or part of their purchase online, sometimes even before seeing their new houses in person. Record-low mortgage rates and a drastically low housing inventory, created by societal shifts from the coronavirus pandemic, have raised the stakes on the housing market in many places. The increased pressure on the market has been coupled with widespread adoption of tech tools that allow buyers to not just browse real estate but also apply for loans, finalize deals, and even have documents notarized, all while social distancing from their sofas. Sixty-three percent of buyers who used Redfin in November and December went on to make an offer on a home they hadn’t seen in person, and monthly views of 3-D walk-throughs on the site are up more than 500 percent since February 2020.
How digital transformation will impact the commercial real estate market in 2021
Forbes – February 14
The 2021 Deloitte Commercial Real Estate Outlook report shows that COVID-19 has made a systemic impact on the commercial real estate industry. We see “purpose, location, and analytics” as the continued evolution of the value proposition of CRE, said Jim Berry, Vice Chairman and U.S. Real Estate Leader at Deloitte. “It is telling that 56% of CRE respondents to our 2021 CRE Outlook survey said that the pandemic exposed shortcomings in their organizations’ digital capabilities, and only 40% of respondents said their company has a defined digital transformation roadmap,” he continued.
Zillow Group real estate rival Compass files for IPO, shows $3.7B in revenue for 2020
GeekWire - March 2
Real estate brokerage Compass filed for an IPO on March 1. The 8-year-old company reported $3.7 billion in revenue last year, up 56% year-over-year, with a net loss of $270 million, down from $388 million in 2019. Compass is among a flock of real estate tech companies riding a strong U.S. housing market amid the pandemic driven by record low mortgage rates and a limited supply of homes. Compass has raised $1.6 billion in venture financing and was valued in 2019 at $6.4 billion after raising a $370 million round. The company competes with Seattle real estate giants Zillow Group and Redfin, among others.
Real estate title firm Doma, backed by Lennar, to go public in deal with SPAC
CNBC – March 2
Doma, a firm that looks to disrupt the real estate title insurance market, has agreed to combine with Capitol Investment Corp. V, a publicly traded special purpose acquisition company. Doma, formerly known as States Title, has a less than 1% share of the title market in the U.S. but projects to be at 5% by 2023. The company is backed in part by Lennar, one of the nation’s biggest homebuilders. This merger will take the company’s value from $623 million at their C funding round last March to $3 billion.
Silverstein’s Tal Kerret seeks $250M for SPAC
The Real Deal – February 16
In a mid-February regulatory filing, SilverSPAC Inc. said it intends to raise $250 million for a blank-check firm that aims to take a PropTech firm public. After blank-check firms made a comeback last year, real estate players have been swarming to the space. Nearly 20 are seeking PropTech deals. The transaction is expected to provide up to $645 million in cash proceeds, including a fully committed $300 million in private investment in public equity (PIPE), and up to $345 million of cash. Top-tier investors anchoring the PIPE overall include funds and accounts managed by BlackRock, Fidelity Management & Research Company LLC, The Gores Group, Hedosophia, SB Management, a subsidiary of SoftBank Group Corp., and Wells Capital.
Real estate tech SPAC RXR Acquisition files for a $250M IPO
Nasdaq – February 12
RXR Acquisition, a blank check company formed by RXR Realty targeting real estate technology, filed in February with the SEC to raise up to $250 million in an initial public offering. The company plans to raise $250 million by offering 25 million units at $10. Each unit consists of one share of common stock and one-fifth of a warrant, exercisable at $11.50. At the proposed deal size, RXR Acquisition would command a market value of $313 million. The company is led by Scott Rechler, CEO and Chairman of real estate owner, manager, and developer RXR Realty. RXR Acquisition was founded in 2021 and plans to list on the Nasdaq under the symbol RXRAU. The company filed confidentially on January 27, 2021. Goldman Sachs and BofA Securities are the joint bookrunners on the deal.
Built Technologies lands $88M in funding to ease construction financing
Construction Dive – February 17
Construction finance platform Built Technologies, which has helped fund $68 billion worth of construction projects across 130,000 commercial, homebuilder, land development, and consumer deals, has raised $88 million in a new funding round. Nashville, Tennessee-based Built announced its Series C funding round, led by Peloton and SurveyMonkey investor Lee Fixel. Other backers included fintech-focused Canapi Ventures, Index Ventures, and Goldman Sachs Investment Partners, among others. Built is used by more than 125 of the leading construction lenders and thousands of owners and contractors to manage over $68 billion of annual construction spending.
L.A.-based Metropolis raises $41M to upgrade parking infrastructure
Tech Crunch – February 16
Metropolis is a new Los Angeles-based startup that’s looking to compete with BMW-owned ParkMobile for a slice of the automated parking lot management market. Upgrading parking with a computer vision-based system that recognizes cars as they enter and leave garages has been Metropolis’ mission since CEO Alex Israel first formed the business back in 2017. The company is hoping to use its latest funding to expand its footprint to more than 600 locations over the course of the next year. In all, Metropolis has raised $60 million since it was formed back in 2017.