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The Inspirational Stories Behind Three Commercial Real Estate Startups That Are Breaking New Ground
The commercial real estate landscape is ripe for disruption. Several upstarts are capitalizing on antiquated processes and leveraging new technology and insights to build transformative solutions. These groundbreaking businesses did not transpire overnight. Instead, many were born out of first-hand experiences with a market pain point.
Here are the stories of three commercial real estate startups that were inspired by personal experiences and have already started to challenge longstanding assumptions and disrupt the industry.
In 2011, Connell McGill and Pavel Khodorkovskiy were shocked by how little transparency commercial building owners and operators had with respect to their building operations. Compelled to find a solution, McGill and Khodorkovskiy turned to artificial intelligence and big data. Their answer is Enertiv, a real estate technology company that streamlines building operations for the largest, most innovative commercial real estate portfolios in the world. It takes a four-tiered approach to deliver valuable insights
- Survey: Enertiv captures 360-degree scans of every mechanical room in a building, as well as the important metadata for each piece of equipment.
- Critical Equipment: Enertiv deploys several devices to capture performance data from hundreds of pieces of equipment, from the condenser fans to chiller plants.
- Tenant Submeters: Enertiv integrates with digital submeters to install utility submetering where necessary.
- IoT Sensors: Enertiv deploys targeted IoT data collection packages to track specific issues and add context to equipment performance data.
Ultimately, Enertiv transforms property data into asset data. The results are impressive, to the tune of 10% potential total operating expense savings, 350% average five-year return on investment, and a 14-month average initial payback period.
When Ryan Freed’s mother successfully prolonged a 2-year cancer prognosis by six years with wellness practices such as yoga and meditation, he was inspired to take action. Shocked to learn that the average wellness studio makes only a 1% profit, Ryan decided to create a more effective solution. His answer, hOM, capitalizes on underutilized spaces inside residential and commercial properties by transforming them into hubs for community building and wellness classes, in turn increasing tenant satisfaction and retention. hOM partners directly with property managers and does the legwork to pinpoint what kind of amenities are best suited for particular spaces. Freed is capitalizing on the growing trend of CRE to focus on tenant experiences. His work is paying off. hOM communities see a 15% higher tenant retention rate compared to the national average.
After spending years in the throes of commercial real estate, Jonathan Wasserstrum and Justin Lee, along with Aron Susman, identified a crippling problem. While it’s reasonably easy for smaller companies to find office space options, thanks to the likes of WeWork and competitors, and reasonably straightforward for larger companies to find office space options thanks to long-established relationships with brokers, there’s a missing sweet spot for mid-stage companies. These companies often resort to Google sources and "friend-of-a-friend" referrals for office space recommendations. The process is time-consuming and rife with challenges.
Squarefoot offers a one-stop marketplace for commercial real estate. It aggregates commercial real estate listings to enable an easy search process. It doesn’t cut out the broker but instead leverages an in-house brokerage team to help customers vet, apply for, and negotiate spaces, working hard to secure the most favorable terms. Brokers work for the tenant and do not operate on a commission. To date, Squarefoot has helped more than 500 companies, including the likes of Casper and Instacart, solve their real estate needs.
With the complexity of commercial real estate growing, new solutions to its biggest problems are surfacing. Enertiz, hOM, Squarefoot, and Affinity are transforming the status quo and disrupting the market.