Throughout my brief career in commercial real estate, I’ve seen a lot of innovation. From 3D mapping, mobile, and retail tech, to the data space, tech-related start-ups are proliferating. I was lucky enough to be part of a test group for Compstak, a new crowd-sourced database of lease comparables launching in New York City. Compstak is destined to be a game-changer and one of the founders was nice enough to take the time to sit down and answer a few questions.
Enter Mike:
Like many great start-ups, the idea behind CompStak came to you from an inefficiency you noticed in the market while working as an office leasing broker. How come no one before you acted on this need?
The germ of the idea for CompStak, and our first product, is a marketplace for the exchange of lease deal information (comps). Others have certainly identified this need, and a few have acted on it, but many others never tried, because unlike collecting sales data and other property information there are no large sources for this information. We realized very early on, that if we didn’t tackle this problem the right way, we could not succeed. We had to create a site that is very easy to use, allow our users to add and search for a lot of data, and properly incentivize brokers and appraisers to share information that is near and dear to them.
Our lease comp marketplace is just the first step in our larger vision. Our ultimate goal is to increase transparency in commercial real estate information on the whole. This includes the information that buyers, sellers, tenants, landlords and brokers use in doing transactions, and the information owners use to manage their buildings and maximize their revenue.
We’re seeing a surge in tech-related start-ups in the real estate space. Describe the next generation of real estate professionals?
Real estate buyers, sellers, tenants and landlords are all becoming more sophisticated. They expect to have a wealth of information and analysis when making real estate decisions. The relationships that were key to the last generation of real estate professionals will remain important, but only when backed by analytical data and market savvy. The next generation of real estate professionals will think and act more like management consultants, and less like brokers.
The system behind CompStak is pretty intricate, can you explain how it works in simplistic terms?
Quite simply, CompStak emulates what brokers and appraisers already do on daily basis, and allows them to exchange the comps they have to get other comps. What makes our system better than the status quo is that instead of providing random comps in exchange for other random comps, our users get points for their comps, and they may then use those points to search for and purchase the specific comps they need when they need them.
Of course, there are complex machine learning algorithms, data validation processes, user rankings, royalty points, and other systems that we manage on the back-end, but as far as our user experience is concerned it’s pretty simple.
Since our system crowd-sources lease deal information, we end up with the most comprehensive and accurate information in the markets we serve (right now just NYC). We can then create sophisticated analytics and reporting from this information.
How do you envision CompStak being used? Is it built to work across multiple platforms (iPad, smartphone etc.)?
Our primary users right now are brokers and appraisers that use CompStak at their desks to research comps for active and prospective deals. Our service layer is built with REST API in mind, allowing for future scalability including iOS and Android or even a public API for our enterprise customers. We expect that brokers will use CompStak on iPads and smartphones while out showing space to clients or when canvassing buildings. For now, we are optimized for Firefox and Chrome.
When’s the CompStak blog launching?
Good question! Right now we’re planning the topics for our blog that we think will be most interesting to our users. We’ll be writing about our progress with the company, real estate technology, and tips and tricks for real estate professionals. We plan to launch the blog before our launch, and we’d love some feedback on what the real estate community wants to read about. Of course, it would be hard to compete with ASotREG.
Where do you see CompStak in 5 years?
In 5 years, we’ll be the leader in commercial real estate information. Institutional owners will come to us for data that compares their properties to their competitive set. Hedge Fund analysts will use our data to track which public REITS to invest in before quarterly earnings come out. Private Equity real estate investors will use our lease and sales comps to analyze potential investments. Furniture Sellers will use our data to track lease expirations for move leads. Appraisers will cite our comps in their appraisals. Economists will come to us to track growing and shrinking industries, changes in economic development, and growth of the economy. Brokers will use our comps to negotiate the best deals for their clients. Where there is a commercial real estate deal to be made, property to track or manage, or trend to analyze we’ll be there.
What’s your favorite CRE Tech tool?
In NYC we’re big fans of The Oasis Map which brings together lots of public real estate information all overlaid on a map of the city. Similarly, CityMaps is a game changer for retail professionals. They do a terrific job of visualizing retailers, and their map is quite accurate. In the real estate information space, Real Capital Analytics presents real estate investment activity in a user friendly and easy to digest format.
What’s one piece of advice you’d give to a hesitant real estate professional with a great start-up tech idea?
Find a terrific co-founder. To succeed as an entrepreneur you’re going to need to sell a lot of people on your idea. Terrific technical co-founders are very hard to find, and once you find them they’re hard to convince to work on your project. To get a co-founder onboard you’re going to need to sell them on your idea, and show that you’ve done enough due diligence to prove that it’s a worthwhile endeavor. If you can’t do that, rethink your idea, your strategy, keep looking or learn to code!
If you won the Mega Millions jackpot and had $100M to invest in real estate, what would you buy?
To be honest, I’d more likely invest $100M in CompStak than in a real estate investment. That said, growing up I always dreamed that I would build a huge company, and once that company was large enough I would pay to move all of my employees to a depressed city and rebuild it, building housing for my employees and a new headquarters for the company. In particular, I love the idea of repurposing old industrial buildings into awesome residential lofts.
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