About six months ago, I transitioned industries, moving from a high-speed "rollercoaster" tech startup to a more dependable "Ferris wheel" commercial real estate (CRE) firm. As you can imagine, the companies are vastly different in the products and services offered, business models, organizational structure and office culture—including the stigmas of the scattered, youthful ping-pong atmosphere of a startup versus the more matured, tried-and-true humdrum of an older business.
Beyond stigmas being mostly untrue, I’ve made some key observations about CRE in general, and how the industry is swiftly coming around to tech disrupters like RealMassive, who are not just tackling the banal methods in which real estate data is collected and exchanged but revolutionizing it (think Zillow for residential real estate data). The usual obstacles to receiving adequate and timely information are so deeply embedded, that navigating them is quintessential to being an effective real estate professional.
I’ve seen the modernization of CRE happen right before my eyes, via my company HPI’s first-class, symbiotic partnership with the data pioneers at RealMassive. It’s fascinating to see hard working individuals get the resources they need in the dynamic, fast-paced market that is Austin, Texas, and how an open source of data is changing the game. It’s also refreshing to see a relentless startup push its way past tradition and make a difference, while responding immediately to customer feedback and adjusting the product accordingly.
Austin is happening right now
OK, I’ll admit, it didn’t take too much convincing that Austin real estate is “where you want to be.” According to Forbes, Austin is the runner up for fastest growing city in the U.S., second to Houston. (Dallas, Fort Worth and San Antonio also made the top 10.) By 2050, the population of Texas is set to have doubled. The Austin Chamber of Commerce reported over 60 new companies that moved operations to Austin in 2014. For office space, there’s about a 9 percent vacancy rate (which is below the national average of 14.6 percent).
Even pop culture is jumping on the Austin bandwagon. I’ve seen our coveted Franklin’s BBQ in a Chase Sapphire commercial, and several cameos in John Favreau’s movie, Chef. Bravo selected not one, or two, or even three but four Austin restaurants (there are 16 total) to participate in their reality-contest show, “Best New Restaurant.” It’s all happening.
As a resident of the city, the visible evidence beyond statistics is just as powerful. You can’t capture your essential Instagram skyline photos from the green belt without a flock of cranes, and I don’t mean the bird.
Bottom line—as far as the Austin office market goes—demand is high, quality options are low and there is intense competition for the most desirable space. It’s a rat race figuring out where to put tenants (especially those coming from out of town) and brokers hope they have true, actionable market availability and prices.
The big data shake up
To the average person, commercial real estate may seem pretty easy—you figure out which office space is available and then decide if you want and can afford it. Real estate decisions are some of the most impactful to a business; financially, operationally and culturally. You don’t order office space online, and you shouldn’t rent a space out of urgency without a full-blown plan in place, that can and will affect your business for the next five, 10, 15 plus years.
Looking for real estate without an expert is a silly move on its own—especially based on the information that has historically been available to the public. Many COOs have a broker they’ve built relationships with for years, and wouldn’t think about making a real estate decision without his/her guidance. CRE brokers subscribe to expensive databases filled with archaic data, crossing fingers that the availability and rates are accurate before the information is presented to a client.
Turns out, there is a major disconnect between the data that real estate firms need and what is available in real time.
That’s when RealMassive decided to shake things up. RM isn’t just another database, it’s a data democracy. With the participation of landlords and brokers, property information is updated and available to the public in real-time. They don’t withhold market information from non-customers, and everyone is invited to contribute accurate data about a commercial property (think Wikipedia), with a certain level of checks and balances, and this is essentially what makes the platform effective.
The technology is so smart, that while properties are updated, the backend gathers intelligence, recognizing conflicts in rates, size, and amenities and so on, and notifies the property owner with an urgency to resolve. When working with the usual “big guys”—this task would take weeks for administrators to correct. You know what they say: “time kills deals,” so the site’s information is rendered useless to a broker, who is then better off contacting properties directly via phone, e-mail.
With reliable data, an extraordinary customer feedback loop, and marketing insights provided, the amount of time saved can be close to eight, top 10 hours a week, basically an entire day worth of work, plus the peace of mind that while evaluating choices, a tenant is receiving the best data possible to inform business decisions. The economy of an entire region can benefit when all are willing to participate in this data revolution, and we’re proud to be a part of at least the Austin wave of change.
So, is RealMassive replacing the begrudged commercial real estate broker? No way. As my dad always taught me—everything is negotiable. Including rent, leases and other contracts (and there’s certainly a lot involved in a CRE deal). So, when venturing into the big, bad world of commercial real estate, you definitely want an advocate on your side, that knows the process and can strategize the best solution for your particular business. Though innovative co-working spaces like WeWork, Vuka, and incubators like Capital Factory or TechStars make very desirable office accommodations for small companies and startups, but many will one day graduate to their own space too.
Color me nerdy, but I really like being in a role at the intersection of tradition and technology. There’s a sense of stability, but with gaps that tech disruptors can help fill in and keep things exciting—two different business worlds combine for mutual benefit and a common goal to make the industry a better place. Embodying the inventive spirit of Austin and its startup culture, a company like HPI welcomes cutting-edge ideas to solve age-old problems.
Samantha Meckler is a marketing specialist with HPI Corporate Services.