Over the past 7 years, Atlas has acquired 45 properties with a total deal value of ~$800M. Over that time, we’ve grown from 3 guys in a 100 SF shared office, to an integrated team with 5 operating platforms. It’s been a wild ride full of exciting expansion, but along with rapid growth comes growing pains.
To continue to scale our acquisition process, we needed to put processes in place to efficiently manage investor reporting, asset management, acquisitions, and company operations. Luckily, real estate-specific software companies have sprung up to bring efficiency to all aspects of real estate operations. Here are a few of the tools we’ve implemented and explored to help grow our firm while maintaining our competitive advantages.
Investor Relations (Juniper Square): In early 2017, we launched our online investor portal, Juniper Square. It was long overdue, as our investor network ballooned from a few friends and family members to a group of 400+ HNW individuals today. We began looking for a professional solution in 2014, but were underwhelmed by the options available at the time. Juniper Square has made the capital raising process more efficient and scalable, ensured a great experience for our investors, and eliminated much of the administrative burden associated with syndicating real estate investments on a deal-by-deal basis.
Multifamily Asset Management (Rentlytics): When acquiring assets, we typically Co-GP with local operating partners and outsource property management to 3rd parties. As such, day-to-day asset management responsibilities are shared across several parties. Rentlytics is an asset management platform which can be used to view accurate real-time data, pull reports, manage the renovation scope, and make data-driven decisions. One of the biggest challenges with asset managing multifamily deals is making investment decisions based on real-time, accurate data. Rentlytics solves that issue.
Multifamily Online Marketing (G5): The marketing process for multifamily assets typically includes paying for listings on the various ILS’s (Apartments.com, ForRent.com etc.), PPC advertising (Google Adwords), reputation management, social media efforts, and Craigslist postings. Budgets are typically analyzed on a $/unit basis and property management firms are typically reactive, increasing the marketing spend when occupancy drops, rather than proactively adjusting the advertising spend based on analytics. G5 is focused on creating websites that convert and tracking all marketing activities via their proprietary online dashboard to calculate the most important metrics; $/lead and $/lease. These metrics are then used to allocate the marketing budget.
Lease Abstracting (Leverton): Leverton is a data abstraction tool. They utilize AI to abstract documents more quickly, accurately, and at a lower cost than typical outsourced due diligence companies. They’re currently focused on lease abstracts, but expanding their service to cover any document where there’s sufficient volume and specificity around what the client is looking for such as loan agreements and PSA’s. I’ve extracted several lease documents through their free pilot program and it works great. This is the future of abstracting data from documents.
Real Estate-Specific Project Management (Dealpath): One of the most frustrating challenges acquiring and asset managing deals is tracking information, assigning tasks, collaborating, and putting a proper follow-up system in place. We’re constantly managing multiple DD checklists, separate Dropbox folders, and simultaneously tracking aspects of the deal in various spreadsheets and emails. Inevitably, something is missed or forgotten. On top of that, it’s time-intensive. We’ve been looking into using Dealpath as an all-in-one real estate deal management platform.
I was so intrigued, I asked the team at Dealpath to come on the blog to discuss the origin story, challenges they face, where they see the company in 5 years, and what has them most excited about real estate technology today.
Can you tell us a bit about your background prior to founding Dealpath? How did you arrive at the idea?
I co-founded Dealpath after spending the past decade growing venture-backed software companies in the (San Francisco) Bay Area, and starting my career working at a large real estate private equity firm. Staying in touch with friends and former colleagues in real estate finance led me to realize the unique pain points surrounding commercial real estate’s reliance on inefficient and manual processes. It really boiled down to designing CRE specific collaboration tools and streamlining workflows so that smart investment professionals can do what they do best – evaluate and execute deals.
What is Dealpath (in under 140 characters)?
Dealpath is a deal management platform for commercial real estate investment teams to evaluate and execute acquisitions, development and financing deals.
What’s the biggest challenge of running a software company in an industry that has been historically slow to adopt new technologies?
The CRE industry has been around for a very long time and ingrained habits can be hard to change. We’re at an inflection point now where advances in software are enabling significant improvements in deal flow including how deals are evaluated and executed. Overcoming the inertia of habit and being an agent for change management has challenges, but is also what makes it such rewarding work.
Where do you see Dealpath in 5 years?
Our mission is to build sustaining and compounding value for our customers (who are CRE investment teams). We believe that we can fulfill this mission through both purpose-built collaborative software and data services. By combining these value-add services, we can harness improved communication between both people and systems. 5 years from now I think that to be a successful institutional investor in commercial real estate, it’ll be essential to be a proficient user of the best software tools including a leading deal management platform which we see being synonymous with Dealpath.
What has you most excited about the real estate business today? Which real estate tech firm are you most impressed by?
We’re in an incredibly important and exciting period of transition as software becomes part of the DNA of the real estate business. The progress and value realized over the past few years are extraordinary and it’s still accelerating. Board of directors and management teams are actively evaluating their tech strategy as well as available tools to help them to do their job better. We’re in a (CRE) Industrial (Software) Revolution.
To call out a few other real estate tech firms I’d say that we have a lot of respect for the successful pioneers who are today industry standards like Altus Group for valuation along with Yardi and MRI for asset management. We’re also fans of and impressed by some newer entrants addressing major gaps and challenges in the market like the elegant leasing platform from VTS and lease abstraction with Leverton. There are a lot of clear business challenges and opportunities in the real estate business that is well-suited to be improved with software.
What’s one piece of advice you’d give to someone thinking about starting a RE tech company?
The one piece of advice I provide to others is to focus (fanatically) on your customer. We were fortunate to have industry experience and a strong direct network of friends and former colleagues to help inform and guide the development of Dealpath from day zero. We believe strongly that understanding our customer’s needs and constantly thinking about how to make them successful is how we can add and build value. Our success is a derivative of theirs so we have to be aligned.
Scaling a real estate investment platform is difficult, but becoming easier thanks to great real estate software such as Juniper Square, Rentlytics, and Dealpath.
I’d love to hear which real estate software has been most instrumental in your growth.