REAL ESTATE TECHNOLOGY PERSPECTIVES THAT COUNT

Over the past few years, real estate technology has matured significantly. This has caused a major shift in preferences and demands from residents, and the multifamily housing industry as a whole. Thousands of property owners that own more than 40 million apartments are currently undergoing a tech transformation, and smart apartment technology is quickly becoming a must-have amenity for multifamily and single-family rental operators. Residents, along with both property owners and managers, crave technology that makes the apartment experience more efficient, automated, and enjoyable from initial resident interest all the way through move-out.

Prior to the New Year, we announced RET Ventures’ investment of $5 million in the smart apartment automation platform, SmartRent. Our investment is helping to fuel the company’s accelerated growth and large-scale national deployments, increasing its current 15-state footprint to over 40 states. In thoroughly evaluating the smart apartment space, RET Ventures and our LP group saw SmartRent emerge as a consistent outperformer across every key metric, and their platform offering has proven so impressive that nearly all of our limited partners are in some stage of discussion with the company for pilots or broader national deployments.

Here are a few reasons why we are so excited to be a part of the SmartRent story:

Resident Friendly

Technology is ubiquitous within our society and residents now demand a fully integrated experience in every facet of their lives, especially at home. From enabling prospective residents to conduct secure self-showings of available units, to empowering current residents to remotely control the climate, lighting, and access of their current unit, SmartRent’s automated platform provides a comprehensive and seamless experience for current and potential residents. As automation and self-service continue to be major trends in the multifamily industry, the SmartRent platform will provide lasting value to residents for years to come.

Optimized Operations

By combining connected devices with its web and mobile platform, SmartRent can help identify leaks or faulty equipment, eliminate energy waste, and provide remote access control for door locks. These functions are especially valuable when managing vacant units, where leaks or needless energy consumption can often go unnoticed and lead to unnecessary costs.

Overall, SmartRent’s platform is an efficient and secure way to automate maintenance and other responsibilities of the property while driving down expenses and long-term operating costs.

Easy and Flexible Deployment

The SmartRent platform is flexible and easy to implement in any rental property type at any stage, including ground-up developments, retrofits, high-rises, garden style properties, and more. SmartRent offers a complete turnkey deployment service, including equipment specification/ordering, device installation/pairing and resident /staff onboarding.

Industry Pedigree

SmartRent is the brainchild of accomplished real estate industry veterans. This, combined with the clear benefits of the platform, are some of the main differentiators of the company and reasons why we chose to invest.

SmartRent has incredible momentum as it completed over 14,500 installations in 2018 and already has an additional 50,000 apartments committed for 2019. We look forward to continuing to play a role in the company’s growth as it leads the multi-family industry in safely, securely, and profitably embracing technology to automate multi-dwelling units.

I’m very excited to welcome you to the first installment of the Real Estate Technology Ventures (RET Ventures) blog on Medium. On this platform, we will share updates and information about the Firm, portfolio companies and our team’s perspectives on the biggest trends in real estate technology and the multifamily industry. To start things off, I’d like to outline our vision and why we’re unlike any other VC you’ve ever met.

Billions of dollars have been flooding into proptech in the past five years and with good reason. The $31.8 trillion real estate industry is undergoing a significant digital transformation and the investment community is quickly ramping up their involvement in the space. But proptech is a broad term that, depending upon who you ask, can involve everything from 3D modeling software to listing services for real estate agents. While we invest in all real estate technology verticals, our primary focus is on a market category we call rent tech.

There are currently 40+ million rental units in North America and, according to a MarketWatch report, American renters collectively paid a total of $485.6 billion in rent in 2017, up $4.9 billion from 2016. We believe there is an incredible opportunity for multifamily owners and operators to leverage technology to both improve the resident experience and more efficiently and effectively operate their portfolios. This is the market that we see great potential in, and we’re making bold moves to solidify our position to help create category leaders.

Recently, we announced Real Estate Technology Ventures I, a $108 million fund complex whose limited partners (LPs) include five major multifamily REITs (Aimco, Boardwalk, Essex, MidAmerica and UDR), as well as leading private owners like Starwood Capital Group, Cortland, and GID. That brings us to our most important differentiator: RET Ventures’ network.

Our LPs, with close to 1 million total rental units under management, are the largest single group of institutional multifamily owners in North America to ever back a venture fund. Because of our deep roots within the MF industry, RET Ventures has an unmatched ability to help innovative rent tech companies shorten their sales cycles and gain traction within a market known for its extended sales cycles. Rather than working in hypotheticals such as: “We think multifamily owners would love this technology,” we simply consult with some of the biggest multifamily property owners on the continent. Fortunately, they just happen to be our LPs and thus potential owners of the company we may back. If the product or platform makes a positive impact on our LPs, we know we’re on the right track. It’s a win-win situation: LPs get access to innovative technology that helps them improve their operations and increase revenues, while entrepreneurs are able to leverage our extensive network to leapfrog their competitors.

RET Ventures is more than an industry-backed early stage venture capital firm. We believe we’ve developed a truly unique model that provides tremendous value for LPs and entrepreneurs alike. We’re excited to see what the New Year brings us and hope you join us for the journey.

Inside the rental tech ecosystem, with RET Ventures’ Chris Yip

In proptech, the early bird doesn’t always get the worm.

It can take a lot of time to overcome owners’ reluctance to bet on a new product, and those long sales cycles have been the undoing of many a startup, according to Christopher Yip.

“Historically, there’s not been a first-mover advantage because the worst thing you want to do is deploy a new technology in your portfolio and have the startup fail,” said Yip, a partner at RET Ventures, a venture-capital firm that focuses on the rental sector and counts major landlords Essex Property Trust, Invitation Homes and Starwood Capital Group among its investors. “We think what we’re doing is working, because we can get a group together, vet and validate a solution, and build that solution.”

RET led the Series A round for SmartRent, which went public in a SPAC merger this summer, and has also invested in Amenify, Kasa and Measurabl. The firm raised $165 million for its second fund in June. The Real Deal caught up with Yip, who joined RET after over a decade at private equity giant TPG, to talk about the game-changing opportunities in the rental space and to break down some of the thornier issues that the industry needs to tackle around affordability, sustainability and institutionalization.

There’s been a big shift over the last few years in how Wall Street sees the rental housing asset class.

We’re in the golden age of investment and innovation in proptech, and the institutional rental ecosystem is a good microcosm of that. Participants in the industry are looking at their operations and saying we are behind — in terms of the percent of revenues we spend on technology and innovation and in terms of centralizing business intelligence and process. And how we use that data and analysis to drive decision making, whether it’s on the acquisition and underwriting side, the asset management side, or in property management.

We think there is, frankly, a generational opportunity here....

Read the full article at The Real Deal.