It's time for commercial real estate to get the tech startup treatment, ready or not. New York startup Hightower is raising cash fast to roll out its software that the company claims can finally improve the workflow of the insulated and arcane world of commercial leasing.
Real estate, especially on the commercial side, isn't exactly the sexiest market to be targeting when there are so many ways to try to convince a consumer to order groceries or take a cab. But outside the public eye, the money flowing through leasing agents and building owners is huge. So investors have lined up to fund a service that's gained some early traction in bringing more of that work to the cloud, one-year-old Hightower.
Cofounder and CEO Brandon Weber speaks the language of someone who's worked on both the tech and real estate sides. Hightower's story is a standard one in that Weber says he felt the pain of a lack of technology first-hand while spending six years as a commercial broker for big owners leasing out large office buildings. But with a computer science background and stints at
"Part of why real estate is so far behind its peer industries, many of them smaller, in tech is because there is a very small overlap between real estate and tech. You need to really understand the workflow of the business, and the devil is the details when you're designing a platform that will be easy for a 50-year-old broker and a younger office manager."
The different levels of comfort with technology among real estate players has led to a lot of improvised, in-house solutions, Weber argues. Some of those include proprietary software, but more often, it means hundreds and thousands of Excel worksheets and emails sent back and forth, a lower barrier to entry winning out over efficiency and sophistication in the tools themselves.
The money will allow Hightower to hire more people in New York City, Weber says, to scale what he says is already a proven product with Jones Lang LaSalle, Cushman & Wakefield, CBRE Group and Colliers all signed on among the company's first 40 clients. There are 360 properties managed through Hightower's software so far.
Hightower's cofounders, with CEO Weber at center, designer Donald DeSantis at left and CTO Niall... [+]
Part of Hightower's business is reminiscent of residential real estate tech company Dotloop. That startup is now used by hundreds of thousands of real estate agents to manage showings and the signatures and documents required of the sale process. Hightower's got a similar functionality for commercial brokers who can look at their files and see how negotiations have progressed over a mobile app. But more specific to the commercial market is the ability for owners to see all their properties in one place and compare deal flow and progress from one to another.
For investors, Hightower may actually prove to be a bet on data. The company makes money on a subscription model based on how many assets you manage through it. But most valuable will likely be the analytics Hightower can offer as it scans all the data going through its software for a particular firm.
"I think it's a really interesting time to be a commercial real estate professional," Weber says. "We are now as an industry talking a lot about data-driven leasing. The ones who walk into investors' offices and make pitches that are more data-driven, they'll just win more listings."
With billions of dollars in play and a market that's still early to tech, Hightower and its investors are counting that it'll win its own lion's share of pitches through data, too.
