Categories Narrative

The Coppola-Cheney Group: A Look Back at a Solid 2014

Once a year, I like to take a break from my weekly narrative to do two things:

First, I like to look back and see how we did in 2014 as a team. Below is our year by the numbers. It was a fine year. I am grateful for our clients and proud of the work we do. I am also thankful for the clients that have been working with me for three decades.

And second, I want to remind you of the services my team and I offer. Our job is to provide world class service, representing office tenants locally and nationally, and landlords in the Metro Phoenix market.

If you need help relocating your company, negotiating a renewal, or leasing your building, I know just the right team. Give us a call or just reply to this email. And thank you for your time and interest in my narrative.



By The Numbers 2014 3

Categories Narrative

What Happens When You Sit All Day?

I have been working a lot over the past few months. Sitting, typing, meeting. Sound familiar? Below is a cool infographic on what happens when we sit all the time. The results are not very good. So I have highlighted in yellow some ways to offset all the sitting. Doing some cat/cow yoga postures in the office is always fashionable, right? 
On a serious note, there are a wide variety of sit-to-stand, height-adjustable table options and new technologies in chairs that will make your work environment active and can drastically reduce some of the negative outcomes from sitting. Forward Tilt is a company that I have an ownership stake in. Whether you are looking for a sit-to-stand option or a new chair, they can assess your situation and recommend a solution that fits your needs! If you are interested, please feel free to contact my business partner, Michelle Heeb:


P.S. Here are some photos of the Forward Tilt showroom and office:

To see the images enlarged, please click here.


The Health Hazards of Sitting


By: Bonnie Berkowitz and Patterson Clark
January 20, 2014

We know sitting too much is bad, and most of us intuitively feel a little guilty after a long TV binge. But what exactly goes wrong in our bodies when we park ourselves for nearly eight hours per day, the average for a U.S. adult? Many things, say four experts, who detailed a chain of problems from head to toe.
Itching to move? Here are some ways to workout at work and eat the right stuff.

The Health Hazards of Sitting 2

Categories Design, Narrative

Top 10 Emerging Trends in Real Estate for 2015

The Urban Land Institute is a thoughtful group of committed real estate practitioners who are global in their membership and thoughts. They have recently produced their emerging trends for 2015. You can click here for the complete document. Below I have included a few pages of Chapter 1 for a quick review, the entire document is lengthy. 
Here are my personal highlights—most of which have nothing to do with their trends:

–“Jobs will chase people” is becoming the primary rule in the market. BUT, you need talent, skill, and knowledge. Without these, you will not be recruited.
–Technology—both incremental and disruptive, is changing space use, location, and demand levels. This is one of the reasons why I spend a bunch of time in this narrative discussing new technology. Fast and Furious.
–Aging—A huge new concern for America, although this is the first time I have discussed it in this narrative. Aging refers to crumbling and decrepit infrastructure. We rely upon roads, bridges, transit, water systems, and even electrical grids to live our lives. These were put in place 50 to 100 years ago and we rarely think about them—until they stop working. We have a D+ grade in the US given to us by the American Society of Civil Engineers.

Very early each morning, I drive down Camelback Road on my way to the preserve for my hike/run. Camelback road is one of our most visible and high end roads. At least five times a year there is water pooled in the street. After about a week, the street crews come, temporarily fix the leak and repave. Within a couple months, the water is leaking again, not always in the same place. Instead of fixing the problem permanently, they Band-Aid it. Take that one small story and run it across America—
you’ll see that we have a big problem coming.

–Finally, there has been no real rebound year so investors are requiring deep market knowledge and hands on local skills. That is where we come in. If you need information on Arizona or Metro Phoenix, let me know.
There is lots more in the report along with my standard highlights. Enjoy.




For the entire Chapter 1, with highlights, please click here.
Top 10 Emerging Trends in Real Estate_2015_Ch 1_Page_01
Top 10 Emerging Trends in Real Estate_2015_Ch 1_Page_02
Top 10 Emerging Trends in Real Estate_2015_Ch 1_Page_03
Top 10 Emerging Trends in Real Estate_2015_Ch 1_Page_04

Categories Narrative, Tech Industry

Day 5: The One Commercial Real Estate Tech Company that Changed Our World

In my final narrative for the week, I thought I would end with the company that I believe has made the most impact on our business: CoStar. Before CoStar, all companies had to do their own property research. This was time consuming and expensive. When I first started in the industry, each quarter, every broker in our firm had to call 100-150 building owners and/or listing agents every 90 days to get updates on their pricing, availabilities, and changes in ownership. CoStar changed all of that. Once a competitive advantage for large firms, the information is now out there (at a cost) for all buildings and all brokers.
While information is now widely available, which is great for the consumer (tenants and landlords), the process remains the same. Getting availabilities and quoted rates are not what makes a broker valuable. Market knowledge, nuances, trends, comps, legal negotiations, and process expertise all contribute to a quality broker’s skill set and their value proposition.
If you have questions on our value proposition, let me know. I would be happy to meet with you or anybody you know that needs office space, now or in the future. Thank you for your time and valuable referrals.



Friday 2

Company:  CoStar logo

Key Management:
Andrew C. Florance, CEO
Michael R. Klein, Chairman
Brian Radecki, Chief Financial Officer
Business Strategy: Costar’s strategy is to provide all commercial real estate personnel with extensive information and knowledge about the market in which they are working. Costar gets their information through listing brokers, developers, property management, and whoever else has listings on Costar. The new CostarGo 2.0 allows for real estate professionals to analyze major market indicators, vacancy rates, rental rates, leasing activity, sales prices, and cap rates. 

Location: Washington, D.C.

Funding: Publicly Traded

Competitive to brokerage: To date, CoStar has worked with brokers and owners providing information. It would be a big change in company direction to compete against them. The newest version, CoStarGo 2.0, is meant to bring additional information (at an additional cost) on the local market to real estate professionals. CoStar is, though, an informative company, making their money on the real estate professionals that subscribe to their services; they are not a brokerage company.

Examples of its Capabilities:

1. Anyone is able to search for properties or land with a vast range of detailed search criteria.

CoStar1 2

2. The search results are mapped and listed.

CoStar2 2

3. Each listing result contains extensive details about the property.

CoStar3 2

4. In addition to intricate details and analytics about the property itself, CoStar also provides sale comps.

CoStar4 2
Categories Narrative, Tech Industry

Day 4: Tech Companies Trying to Eliminate/Assist Commercial Brokerage

Hope you are finding this week’s series interesting. We are in the homestretch. Below are six additional companies to review. Zillow is probably the only household name among them. Enjoy.




Thursday 4

Company Name: Hightower

Upper Management:
Brandon Weber, CEO
Donald DeSantis, CDO
Niall Smart, CTO

Business Strategy: Hightower’s strategy is two-fold: One, to sell software to owners who want a new and improved way of managing their assets – even from their mobile phone; Two, to target landlord brokers with software that will better track prospects, active deals, and available space.

Location: New York, New York

Funding: Hightower has been backed by $2.12 million by numerous investors including Thrive Capital, Bessemer Venture Partners, RRE Ventures, and some individuals such as Box CEO Aaron Levie.

Competitive to brokerage: No, owners and listing brokers will use this to better manage their portfolios verses replacing broker functions.



Company Name: Honest Building (Honest Buildings)

Upper Management:
Riggs Kubiak, Co-Founder and CEO
Garrett Kubiak, Co-Founder
Cody Roberts, Co-Founder

Business Strategy: To make money off of two different groups: One, companies who want to outsource finding a service provider; Two, service providers who accept a commission as a result of an introduction of Honest Buildings, who only pay in the event of a successful transaction.

Location: New York City, New York

Funding: Honest Buildings received $5.5 million from Westly Group and RockPort Capital Partners. Thrive Capital has also put investment into Honest Buildings for a total of $7.5 million.

Competitive to brokerage: Potentially. Right now they are focusing on helping builder’s owners find vendors such as architects. This could turn into trying to help tenants find owners who will bid for their occupancy.



Company Name: The News Funnel

Upper Management:
Michael, Beckerman, Founder and CEO

Business Strategy: The News Funnel saves time and reduces the amount of e-mails flooding real estate, PR and marketing professionals by gathering trade news and information from trusted industry sources and letting users craft that information into a custom feed that is unique to their geographic market and industry segment.

Location: New York City, New York

Funding: $2 million in Series A funding. Michael Beckerman, the company’s Founder and CEO, is one of the site’s largest investors. Additional investors include the Criscola family; Steve Siegel, chairman of Global Brokerage at CBRE; SL Investment Partners; The Hampshire Companies; Scott Landis; Jim Petrucci.

Competitive to brokerage: No, this is a commercial news consolidator. Getting all of your market news from one place will not take the role of a broker.


Company Name: Realty Mogul logo

Upper Management:
Jilliene Helman, CEO

Business Strategy: Crowdfunding. With over 14,000 active accredited and institutional investors as Realty Mogul members, they make it easy for investors to invest in real estate together.

Location: Los Angeles, CA

Funding: 12 Private Investors and 5 Corporate Investors

Competitive to brokerage: Potentially to investment sales, but not for this cycle.



Company Name: View The Space

Upper Management:
Lloyd Frink, Co-Founder
Rich Barton, Co-Founder

Business Strategy: To capitalize on owners and brokers who want to more effectively market their vacancies with video tours.

Location: New York City, New York

Funding: View the Space has been given a $7 million funding from investors like Trinity Ventures, and individuals, Thomas Byrne and Greg Waldorf.

Competitive to brokerage: No, View the Space will be another tool owners and brokers use to market their properties to other brokers and tenants.



Company Name: Zillow logo

Upper Management:
Lloyd Frink, Co-Founder
Rich Barton, Co-Founder

Business Strategy: Zillow, Inc. is a leading online home and real estate marketplace that empowers people with information and tolls to make smart decisions about homes, real estate, and mortgages. – See more at:

Location: Seattle, WA

Funding: has been funded by $96.6 million, over 5 funding rounds, by Series A, B and C funding, Venture funding, and Post-IPO Equity funding.

Competitive to brokerage: Not yet. They have tons of name recognition. Will they/can they branch into brokerage remains to be seen.

Categories Narrative, Tech Industry

Day 3: Tech Companies Trying to Eliminate/Assist Commercial Brokerage-First Six

Over the next two days, we will review 12 different technology companies that are in the commercial real estate space. Before I look at the companies that are trying to take business from commercial brokerage companies, a little background is necessary. I want to break the commercial brokerage industry down into two key segments: leasing and investment sales. In the leasing business, there are very limited roads to automating the process. Lease negotiations are local and specific to submarkets, projects, and type of building. Each negotiation is distinct and a quality broker can and does make a huge difference. On the other hand, investment sales are becoming more commoditized. National brokers take listings outside their market, fees have been compressed, and the process is much easier to automate because the price and terms, for the most part, are public. Putting all the due diligence materials into e-vaults has become the norm.

Leasing vs Sales

The focus of this narrative series is leasing, but let me talk a bit about the investment sales business over the past 10 years. Today, like many maturing industries, there are a number of highly seasoned, highly qualified, and highly skilled investment brokers around the country. Over the past decade, they have shunned working solely in their own markets and have smartly staked out niches (huge sales, NNN leased properties, portfolios, etc.) and/or focused on building relationships with companies that have large holdings and are likely sellers in the future. Once they get listings outside their home base, they bring on a local leasing broker for insider market info and away they go. This has compressed the commissions on large sales opportunities.

From the leasing side, almost all tech companies have failed and gone out of business with the exception of one–CoStar. On Friday, l will focus on CoStar, but for today and tomorrow, we are going to review a few of the startups that are trying to nibble away some brokerage fees or just create a new area of service.




wednesday 2


Company Name: 42 Floors

Upper Management:
Jason Freedman, Co-Founder
Darren Nix, Co-Founder
Justin Bedecarre, Co-Founder
Aaron O’Connell, Co-Founder
Jon Bracy, Co-Founder
James Bracey, Co-Founder
Ben Ehmke, Co-Founder

Business Strategy: 42 Floors makes money by selling products and services through its showroom site; and accepting referral fees through its Tenant Rep referral program. Other revenue sources are to be determined.

Location: San Francisco, California

Funding: Most recently from $12.3 million in Series B funding from groups such as Bessemer Venture Partners, Thrive Capital and Columbus Nova Technology Partners.

Competitive to brokerage: Yes, 42 Floors gives out information, formerly proprietary to brokers, to mostly 1,000 to 5,000 SF users. This size range could grow, affecting more brokers.


Company Name: CompStak

Upper Management:
Michael Mandel, Co-Founder CEO
Vadim Belobrovka, Co-Founder CTO

Business Strategy: Compstak sells commercial lease data to commercial landlords and institutions.

Location: New York City, New York

Funding: $4.45 million to expand nationwide from Canaan Partners, $1.25 million in funding from companies like Expansion VC, Ryan Slack, and 500 Startups.

Competitive to brokerage: Yes, to an extent. Building owners and tenants may try to buy lease comparables from Compstak, versus hiring a broker. Lease comparables have traditionally been the currency of real estate brokers.

Company Name: Floored 2

Upper Management:
Dave Eisenberg, Co-Founder and CEO
Dustin Byrne, Co-Founder
Judy He, Co-Founder

Business Strategy: Capitalize on owners who want to market their vacancies more effectively. Floored is bringing the ability to visualize office properties online without having to actually travel to them. This is done through 3-D modeling in first-person view or a fly-over view. They service companies all over the U.S. and have even serviced a company in London.

Location: New York City, New York

Funding: According to Pandodaily, Floored has been backed by a $1 million seed funding from Lerer Ventures, Felicis Ventures, Brooklyn Bridge Ventures, Red Swan Ventures, Two Sigma Ventures, Dave Vivero, and Thomas Lehrman. On top of that, they received $5.3 million in a Series A funding headed up by RRE Ventures.

Competitive to brokerage: Floored probably will not be competitive to brokerage companies. Floored is a tool to better understand office space design.


Company Name: FoodTenants logo

Upper Management: (Not Available)

Business Strategy: The database contains more than 1,000 national and regional restaurant chains and emerging food concepts looking to expand. Landlords submit property information and the website generates a list of potential tenants looking for similar sites. The directory gives landlords access to tenants’ real estate criteria and contact information and provides projected openings, growth opportunities, and site criteria for tenants and real estate decision makers. Users can search for properties by state, targeted growth markets, tenant’s ideal building size, and by company name. – See more at:

Location: (Not Available)

Funding: (Not Available)

Competitive to brokerage: Retail brokers have been using this kind of direct contact for years. Large multi-site/multi-state owners talk directly to large multi-site/multi-state users. And yet, brokers continue to represent the tenants. This company will push this same dynamic to smaller tenants.


Company Name: Fundrise

Upper Management:
Benjamin Miller, Officer
Daniel Miller, Officer
Brandon Jenkins, Officer
Kenneth Shin, Officer

Business Strategy: Fundrise is the leading online real estate investment and crowdfunding platform. Starting in 2010, Fundrise was the first company to take commercial real estate public online and offer true equity ownership in local properties. Fundrise offers real estate investments for both accredited and unaccredited investors, and allows real estate companies to build their investment network and raise investment online through a full service, web-based platform. Fundrise reduces the costs associated with traditional real estate investment by cutting out unnecessary middlemen and making the process more efficient.

Location: Washington, D.C.

Funding: Raised more than $31 million in its first round of funding from a group of prominent technology companies, real estate firms and other backers.

Competitive to brokerage: Not really, this platform needs deal flow and brokers will be their primary source.


Company Name: hirise logo 2

Upper Management:
Dave Adams, Co-Founder
Alex Lassar, Co-Founder
Andy O’Brien, Co-Founder

Business Strategy: As a Jones Lang LaSalle-backed startup, HiRise is sometimes referred to as the “Airbnb” of office space.” HiRise focuses on smaller companies looking for leasing situations that don’t lock them in for the long term when the future of the organization isn’t readily known. HiRise will initially cover the Washington D.C. area exclusively, but that should be enough for a good start. There are 25,000 leases of less than 5,000 square feet in D.C. alone, so there are legions of potential users in the area. HiRise works by allowing companies to research different listings by size and price to find the deal that’s best for them. It even allows its users to complete their leases online.

Location: Washington, D.C.

Funding: JLL is the venture capital.

Competitive to brokerage: Yes. New and young brokers cut their teeth on smaller transactions. Older brokers use smaller transactions as bread and butter to feed the family business. If this company takes off, it will be competitive.

Categories Narrative, Tech Industry

Day 2: Why Tech Has Stayed Out of Brokerage for So Long and A Case Study of a Company Trying to Change It

Day Two of our Five-Day Series–In the early 2000’s, before the dot com bubble burst, hundreds of millions of dollars were invested and lost by startup companies trying to turn the commercial brokerage process into an automated endeavor. The theory was, and still is, that real estate brokerage can be automated like the travel agent business and stock brokerage. Hundreds of millions of dollars are paid each year to brokerage companies, and any company that could actually be a solution would be a huge moneymaker. The alluring promise is lower rents to tenants and increased profits to landlords. Every up cycle, technology investors continue to try. This cycle, in general, the efforts seem to me to be more modest, nibbling around the edges.

Below is an article on the residential brokerage company Redfin that is VC backed and trying to be the hi-tech brokerage solution. As Mark Sklar, Co-Founder of DMB, said years ago, the real estate industry is a cottage industry. It needs local talent to implement. Redfin still needs and uses people to implement their solution. This has caused investors to balk and the company to grow much slower than other hi-tech investments. I like the focus on technology, but taking sales people and putting them on salary is not going to garner the top producers. In 1991, eight other guys and I started Lee & Associates Arizona. You needed to be a hunter, then and now. Getting business, especially repeat business, requires only the best. Salary-based brokerage (used for a long time but ultimately abandoned by The Staubach Company which is now Jones Lang LaSalle) has never lasted in our world. The brokerage business is just too hard to not be highly compensated on a success basis. Redfin pays 50% salary and the balance is commissions. It has taken the company eight years to get to $100 million in revenue while some of the 100% commission companies did it much faster. AND Redfin has yet to turn a profit. 
Scroll down to see my highlights and the problems the Venture Capitalist community has with “people” businesses. Wednesday and Thursday, I will dive into 12 commercial hi-tech companies that are trying to take market share in different areas of our business.



Tuesday 2

Redfin Real-Estate Firm Gets Cold Shoulder in Silicon Valley
How Online Company Is Overcoming Tech VCs ‘People Problem’


By: Farhad Manjoo
December 8, 2013

“I used to think I was this made man,” says entrepreneur Glenn Kelman. “That’s what they tell you after you take a company public.”

In 1996 Mr. Kelman co-founded Plumtree, a business-software firm that went public in 2002. After that, he assumed that his next idea was as good as paid for.

“Whatever I thought of, they’d fund it,” he says.

Then, in 2006, Mr. Kelman became chief executive of a real-estate startup, Redfin Corp.

Redfin CEO
Redfin CEO Glenn Kelman, shown in April, believes improving the real-estate business takes more than just better code. Billy Higgins/The Wall Street Journal
Redfin sounds like it would be catnip for technology investors. The company aims to overhaul how people buy and sell houses, using software and data to improve real-estate agents’ customer service. Real estate is an opaque, expensive insider’s game—exactly the kind of business that is ripe for getting blown up by a less-expensive, more-convenient Web-powered service.

“We wanted to change the whole thing in the consumers’ favor,” Mr. Kelman says, his voice straining with a revolutionary’s passion. “We wanted you to have an agent who was on your side, who used technology the whole way through the process and who charged half the price.”

But whenever Mr. Kelman shopped his plan in Silicon Valley, venture capitalists looked at him funny. He raised millions of dollars, but the money came fitfully, often at lower valuations than he expected.

Eventually Mr. Kelman realized the problem. Like Soylent Green, Redfin is made of people—sales staff and customer-service representatives.

To tech investors, companies that depend on such people are old-fashioned. People are unpredictable and hard to manage. They are costly to hire and train, and their path to success is difficult to set into an algorithm. People don’t scale.

Yet Redfin is one of a handful of startups showing that people can make a big difference. Mr. Kelman believes that improving the real-estate business takes more than just better code. It takes better people, specifically, better real-estate agents. Consequently, Redfin has hired hundreds of agents on staff, people to whom it pays salaries, benefits and on whose work the company depends.

After years of slow growth, Redfin is poised to hit it big. It’s on track to book $100 million in revenue—and turn a profit—next year.

And its path suggests that businesses that try to improve workers—and not just code—can be better for customers and, in the long run, better for the bottom line.

Like Zillow Inc. and Trulia Inc., Redfin is partly a website that helps you find houses for sale. But unlike those companies, which make money through ads placed by traditional brokers, Redfin is a full-service brokerage. After you find your dream house on its site, Redfin makes money when you sign up with one of its agents to guide you through the home-buying process. (Its agents sell houses, too.)
Mr. Kelman says Redfin’s unusual setup offers several advantages over traditional brokerages.

First, it improves service. If you’re touring a neighborhood and see a house for sale, you can order up a Redfin agent to drive over to show you the property quickly. In the company’s most-established markets, Seattle, for instance, the agent can be at your service within an hour. (It takes longer in Redfin’s newer markets, like Dallas). This works thanks to a blend of technology and management. Just as the Uber online ride service maps its drivers, Redfin keeps track of its agents’ calendars and real-time locations. Unlike a traditional real-estate brokerage—in which agents essentially are contractors of a brand, not employees—Redfin’s agents are salaried workers. The company can tell them where to go and what to do.

Redfin helps soothe other home-buying frustrations as well. Redfin compiles detailed histories on competing brokerages’ pricing strategies, strengthening Redfin agents’ negotiating prowess. Redfin also conducts most of the home-buying process online, reducing paperwork. And if you’re selling your house, Redfin can test offer prices on the Web, helping you to home in on the optimal price.
The biggest opportunity is price. Mr. Kelman says the incentives of traditional real-estate agents are misaligned with those of customers. If you’re selling your house, your agent, who gets paid on commission, will prefer that you take a lowball offer over no offer. If you’re buying, your agent will want you to bid higher than you might otherwise want—or need—to pay. Economists call this the Principal-Agent Problem, and it has proved stubbornly intractable in real estate.
Mr. Kelman says Redfin has a solution. About half a typical Redfin agent’s pay comes through salary. The rest comes through commissions. But crucially, commissions are linked to detailed reviews that Redfin customers complete after sales. The reviews are posted online and affect each agent’s future business. Your agent always has an incentive to please you. If pushing a client to close a deal will produce a bad review, the agent would rather not close.

Redfin is still tiny. In its most-established locations, it has about 3% or 4% of the market. In bigger, newer markets, it seems nearly nonexistent.

Mr. Kelman concedes that his people-dependent model has slowed Redfin’s growth. But he sees the prospect of long-term returns. “After we hit a certain threshold in the market, our share begins to accelerate,” he says. In other words, over time, better service begins to pay off.

Redfin last month said it raised $50 million from T. Rowe Price Group Inc. and Tiger Global Management LLC. Compared with tech-focused venture capitalists, Mr. Kelman says, these investors didn’t care that Redfin might take several more years to realize its mission of revolutionizing real estate. They were willing to wait, he says.

“Most of Silicon Valley isn’t that patient.”

Categories Narrative, Tech Industry

A Special 5-Day Series on Technology Companies Trying to Replace Commercial Brokerage–Day 1

I spent the last six months reviewing technology companies that are trying to disrupt the commercial brokerage industry in various ways. Over the next five consecutive days, I am going to share with you a number of these companies, what they are trying to do, who has invested in them and, of course, my take on their potential success. 

Before we get into the actual companies, I want to summarize the various areas where clients, both landlords and tenants, are changing the ways they use technology within the industry, and I have included two articles below.
Readers of this narrative are well-versed on the incredible changes happening in design, layout and build-out of office spaces – open offices, cool space layout, etc. In this week’s series, you will learn about some of the companies that are making office design and layout easier to create and visualize.
Second, I will explain the mobility of workers and the changes in wireless technologies that have allowed office space users to modify not only how they design and build-out office space, but where their workers are actually working.
Third, we will cover how the industry is changing regarding how projects are being financed. In one of the final narratives, I will share where the newest financing vehicle is coming from and some caution from my perspective. 
For today, below the graphic is a summary of how technology is impacting almost all areas of commercial real estate and how much venture capital is being invested.



Monday 3


The Profound Effect of Technology on CRE

FunnelCast logo 2
Posted August 13th, 2014 by FunnelCast


While technology has had an impact on virtually every industry in existence, the industry that has perhaps been affected the most by technology is the commercial real estate industry. The vast amount of technology along with the significant growth of technology companies has had a tremendous impact on retail space as well as office space. Along with workspaces for tech workers, a new rental population has also developed.

In terms of innovation, development, and trends in the commercial real estate industry, technology is also leading the way. This is particularly true in such critical markets as Silicon Valley, Boston, Seattle, and New York. Furthermore, office space trends regarding design and planning serve to support demand. Among the most prominent office space features that have come about as a result of the rise of technology are shared office spaces and customized finishes and amenities. In many areas, even temperature and lighting controls are being specifically designed to appeal to tech workers.

Companies have learned to be far more efficient with space resources. Massive corner offices for individuals are no longer en vogue as new generations have indicated a preference for teaming areas that feature a more collaborative, open environment. As technology has allowed workers to be far more mobile, the need for personal space is definitely on the decline.

Space may be declining, but amenities are on the rise. Companies such as Google have practically changed the landscape of the commercial real estate industry by offering fun, interactive work environments that support creativity and convenience through the provision of everything from a 24/7 cafeteria to nap pods. While not every tech company will be incorporating dry cleaning services on-site or installing drink fountains with soda, change is definitely afoot. Workers no longer consume sandwiches alone at their desks as more companies are introducing socialization areas. Stark conference rooms are being replaced with teaming areas.

Additionally, the rise of the tech industry is creating a significant impact on the healthcare sector of the commercial real estate industry. New innovations in technology may well result in an increased number of healthcare facilities blending technology with new health practice models.

Technology is also changing the way in which commercial real estate deals are conducted. CRE tech sites are on the rise, providing a new way to utilize technology to increase the ease, speed, and security for completing commercial real estate transactions. Such sites provide opportunities for conducting the due diligence required for reviewing documents, thus reducing the number of phone calls and other forms of communication that might delay a transaction. iPhone apps such as Loopnet make it easy for commercial real estate brokers to access data in real time from any location, thus further streamlining the industry.

The high-tech awakening of the commercial real estate industry is only just beginning. As technology continues to evolve and develop, the commercial real estate industry will need to evolve as well in order to keep pace with changing paradigms.


Venture Investors Splurge On Real Estate Tech

Tech Crunch
By: Christine Magee
October 28, 2014

Park Place
Editor’s Note: Christine Magee is an analyst for CrunchBase.

Investments in real estate tech are on the upswing in the wake of some billion dollar exits this year.

Following Zillow’s acquisition of Trulia for $3.5 billion in July and News Corp’s $950 million purchase of Move Inc. in September, venture investors are more eager than ever to get in on the market, putting up nearly $300 million in over 30 venture deals for real estate tech startups in the past quarter.

This is more than double the investment total previously captured in a single quarter, capping off a year of uncharacteristically heavy investment in the space.

Venture Investments in RE Tech graph 2

Large rounds for China’s Fangdd, India’s CommonFloor, and Urban Compass out of New York – all consumer-facing real estate listing platforms – make up a significant portion of the total, but the high number of rounds suggests that investors are now seeing merit in other aspects of the space.

Real estate investment crowdfunding platform Fundrise, popup retail space rental service Storefront, and private workspace startup Breather all secured venture funding in the past few months to tackle a variety of less obvious pain points.

“Real estate is a super attractive industry to be building tech in,” says RRE Ventures‘ Steve Schlafman, “it drives a huge part of the economy, and it’s generally antiquated.”

Whereas in the past few years startups were focused around providing home buyers and renters better access to property listings, “now you’re seeing entrepreneurs that actually have domain expertise in real estate starting to build businesses to solve problems that they had when they were working in the industry,” Schlafman says.

RRE has backed startups like Floored, a 3D visualization platform that allows potential home buyers, among others, to explore virtual spaces online.

Real estate listing and search sites like Zillow, Trulia, and Redfin may have gotten the most funding and attention in the space, but these solutions just scratch the surface of tech’s potential to impact real estate.

Top Funded RE Tech Startups

“If you peel back to see what powers these third party sites like Zillow, Trulia,, it’s old school, antiquated systems – spreadsheets, shared drives, faxing listings over to the broker,” says Caren Maio, founder of New York-based Nestio.

Nestio provides a data management platform for real estate professionals, so that when a landlord marks a unit as rented, the broker knows about it in real time and can feed accurate information to third party sites. Consumers can be confident that listings they’re seeing on Zillow or are correct, while landlords reduce vacancy rates and close deals faster.

The higher investment numbers reflect a new demand for tech-driven solutions in the market, as real estate owners and brokers are incorporating tech on a more widespread level.

“Real estate three years ago was like the red-headed stepsister for tech startups — it has that undertone of an old-school, stodgy-type market,” says Maio.

But this is changing quickly. “There has been a shift within the real estate community that will continue, as an older generation of owners is supplemented by a younger generation that is more tech friendly,” says BoxGroup’s David Tisch, who has backed Nestio along with real estate startups HightowerStorefront, and 42Floors.

And the reliance on technology will only increase if the fears about the bubble escalate and the economy weathers additional stress. “Efficiencies are much more necessary when the bubble pops than when things are flying high,” Quotidian Ventures founder Pedro Torres-Picón points out.

“One thing that’s interesting about real estate owners and brokers,” says angel investor Joanne Wilson, “is that they’re always up for something new if it’s going to help them make more money — it’s a sales business. It’s like after using an ATM machine, you’re never going to stand in line at the bank again — you want more tools because it’s amazing for business.”

Most Active Venture Investors in RE graph