REAL ESTATE TECHNOLOGY PERSPECTIVES THAT COUNT

Data has always been critical to business decisions, and today’s uncertain macro environment has only made data-focused analysis an even greater imperative for real estate investors.

During RET Ventures’ “Multifamily Kickoff Summit” at the annual Blueprint event in Las Vegas, RET Partner Christopher Yip moderated a panel entitled “Big Data and its Applications to Rental Housing,” featuring panelists Paul Morgan, Senior Vice President and Head of Data Science and Research at Carmel Partners; Joshua Glastein, Chief Information Technology Officer of Berkshire Residential; Brian Lichtenberger, CEO and founder of Markerr; and Jindou Lee, CEO and founder of HappyCo.

Throughout the conversation, the panelists explored some of the diverse use cases for machine learning and predictive analytics in the multifamily industry from informing investment decisions to optimizing operational efficiency. The speakers emphasized the importance of incorporating human input alongside data in decision-making and discussed some of the biggest challenges associated with data aggregation, integration, and regulatory and privacy concerns.

The informative session, which also included commentary on generative AI’s impact on multifamily decision-making,  left the audience with practical insights into how data analytics can enhance their organizations and a reinforced understanding of how data is reshaping the real estate landscape.

Watch the full session below:

This September, RET Ventures partnered with the annual Blueprint event in Las Vegas to host the “Multifamily Kickoff Summit” — a conference that explored many of the pressing topics facing the multifamily industry, providing attendees with valuable perspective into how owner-operators can leverage various technologies to address significant opportunities and risks in the market.

To kick off the summit, RET Ventures Senior Advisor Shawn Mahoney moderated a panel entitled “Technology and the Future of Multifamily Leasing,” featuring expert panelists Amy Weissberger, SVP of Corporate Strategy at Morgan Properties; Austin Lo, CEO and Founder of Peek; Tyler Christiansen, CEO of Funnel Leasing; and Steven Maltz, VP of Standardization and Process Improvement at Essex Property Trust.

Throughout the conversation, the panelists discussed the importance of the renter experience, diving into opportunities to improve the leasing journey through technology. The speakers gave actionable insights on virtual leasing assistants, CRMs, self-touring, and other digitization solutions that have elevated leasing processes over the past decade, analyzing how these technologies can drive operational efficiencies for leasing teams while eliminating pain points across the leasing journey.

In concluding the session, the panelists explored the next frontier of leasing solutions, sending attendees off with strengthened insights and a more defined roadmap to establish a streamlined renter experience.

Watch the full session below:

Dealing With Delays and Inefficiencies in Real Estate Development

Over the past several years, spikes in construction material and labor costs have made it increasingly difficult for commercial real estate investors and developers to keep their projects on track, creating a landscape where more than 70% of development projects fall behind schedule. But even before these current challenges arose, real estate development was an extremely fragmented industry, and it has long been challenging to oversee the wide variety of vendors and timelines for each construction project. As such, without a centralized system to manage and record all incoming project data, the information investors and owners have access to is typically outdated and inconsistent, making it difficult for equity partners to gain a true, real-time understanding of where active projects across a portfolio actually stand.

Between interest and other costs, a typical institutional development project can lose millions of dollars per month of delay. Because of this, there is growing demand within the industry for solutions that not only provide investors with increased transparency into how an active development is performing in real-time but also arm them with the proactive insights needed to avoid delays. Access to this type of data is even more imperative for large funds and investors with numerous projects running in tandem, for which even small delays could result in tens of millions of dollars lost.

Enhancing Transparency and Minimizing Risk

As the building and construction industry continues to grapple with issues stemming from rising costs and fragmented data, RET has set out to identify solutions that provide stakeholders with much-needed visibility into active development projects, helping them keep these projects on track while further informing future decisions regarding the development process. It is this objective that has led us to our most recent investment in OnsiteIQ.

Built to help real estate investors improve job site transparency and manage risk throughout their development portfolios, OnsiteIQ serves as a single source of truth for stakeholders by providing a centralized platform where institutional investors can document projects, monitor progress, and verify payments. The platform’s network of ‘capture specialists’ regularly walks its clients' construction projects to capture 100% of the job site with 360-degree videos, which are then automatically mapped to each project’s floor plans. This creates an objective, consistent, and comprehensive record of all active projects within a portfolio, which users can instantly access and monitor from any device, anywhere.

OnsiteIQ then analyzes the visual data captured by its team and leverages artificial intelligence to track progress across 18 major project milestones, delivering status updates, identifying patterns of inactivity to predict potential delays, and creating trend reports across an entire portfolio. The platform is particularly valuable for developers, equity partners, and lenders with geographically dispersed developments, who have previously struggled to gain visibility and access a holistic dashboard of accurate status reports for their entire portfolio.

The Future of Construction Intelligence

OnsiteIQ has seen significant growth since its founding in 2017 and is currently being used to monitor construction projects across a wide variety of property types in more than 65 markets throughout the United States and Canada. To date, the company has captured over three billion square feet of 360-degree project footage, monitoring over 1,600 projects valued at a cumulative $17 billion, and OnsiteIQ counts several of RET’s strategic investor base among its users.

As avoiding project delays grows as a top priority for investors and developers, it is clear that OnsiteIQ will continue to prove itself an indispensable solution and save stakeholders millions of dollars in avoidable losses. We look forward to supporting the company as it refines and expands its core product offerings in the coming years and further solidifies its position as an industry leader.

The Growing Need for Affordable Housing

From rural towns to major metropolitan areas, a severe affordable housing deficit has affected communities across the United States for decades. Exacerbated by macroeconomic headwinds like record-high inflation and rising rents, the gap in affordable, available homes for renters has significantly worsened in recent years — currently standing at a

shortage of 7.3 million units.

As the commercial real estate industry grapples with this growing issue, the affordable and workforce housing spaces have seen an influx of institutional capital in recent years propelled by increased demand for environmentally and socially conscious investment practices. However, this asset class often presents owners with its own unique set of challenges. Unlike luxury multifamily housing where most applicants have high credit scores and can easily get approved, this is not the case with many affordable housing rental applicants. Lower credit scores make it harder for applicants to get approved and more difficult for owners to know which residents to accept. As more institutional players enter the affordable housing sector, there is a growing need for solutions that help owners better manage the risks associated with the space while making it easier for renters in need to secure housing.

Modernizing the Tenant Screening Process

Market dynamics persist, and there is a greater emphasis on identifying solutions that help create a more equitable renting environment for owners and residents, leading RET to our most recent investment in

Rent Butter.

Built to help owners and operators of workforce and affordable housing communities better assess risk when screening potential residents, multifamily, single-family rentals, and manufactured housing benefit from Rent Butter’s tenant screening process. Traditionally, owners of these types of properties have relied primarily on static data like credit scores and background checks when vetting potential applicants, which provides only a partial picture of renters’ financial footing.

Rent Butter’s digital application allows owners and applicants to transcend static credit checks in favor of sharing alternative data like banking, spending behavior, and other unique metrics. The platform then provides property owners with in-depth financial and credit reports in a matter of seconds. By reviewing the entire financial history of a prospective resident and using predictive analytics, Rent Butter highlights key trends — such as whether a credit score trajectory is on the rise or getting worse — helping property owners avoid threats like rent defaults and consistent turnover and providing them with more accurate, holistic and equitable assessments of an individual's ability to pay rent.

The platform

is also working to create a better leasing experience by fitting seamlessly within property managers’ existing workflows

and has the ability to validate important documents like applicant I.D.s, employment records, and income statements in real-time – protecting property owners from fraud.

Founded Through Experience

Rent Butter was founded in 2021 by Tom Raliegh and Chris Rankin after the pair worked together at a large institutional REIT in Chicago. As an eviction attorney, Tom was often involved in dealings with residents who were in arrears on rent; in these cases, working closely alongside residents on court-ordered payment plans.

Witnessing first-hand how a dearth in affordable housing options set these individuals on path to face an uphill battle for years, Tom and Chris decided to create another way for residents to communicate their strength as tenants. Using Rent Butter, these individuals are given a chance to convey to landlords that (despite a bad credit score damaged during a rough patch in their history) they are good, reliable renters. By incorporating banking information and other unique, subprime data — including, in certain instances, rent payment history — Rent Butter helps renters build a robust financial resume. Ultimately, this resume provides information that can demonstrate prospective renters’ financial stability and positioning as great long-term residents for the housing provider, even if they may have a poor credit score because of a missed payment years ago.

Rent Butter’s Incredible Potential

Just two years after its founding, Rent Butter has already made significant traction in the market

with a user base comprising more than 100,000 residential units across rental properties.

As the need for affordable, attainable housing continues to grow and more institutional investors enter the space, we are confident that Rent Butter will provide a much-needed solution to these challenges in the industry in the years to come. We look forward to supporting the team as they enhance their integrations and product offerings and continue to penetrate the affordable and workforce housing market to drive a more equitable future.

Last month, RET Ventures hosted a wide network of leaders in multifamily and single family rental — comprised of both innovative real estate technology solutions that make up the firm’s portfolio companies, as well as the institutional owners and operators that represent RET’s strategic investor base — for the fifth annual RET Summit in Park City, Utah.

Each year, the RET Summit serves as an opportunity for real estate executives to come together for discussions around innovation and transformative technology deployment and the ways in which new solutions can help address operational pain points. This year, we were thrilled to host 130 attendees as we spent three days exploring topics ranging from a venture market update in the rent tech space, to pressing industry trends such as AI and centralization.

Our role as a trusted, industry-backed leader in rent tech is something we take pride in, and our investment team — as well as our strategic investors and portfolio companies — continue to benefit from this annual gathering of a diverse consortium of market participants. Especially in today’s uncertain market, technology can play a critical role in helping create a stronger multifamily industry, and we look forward to future opportunities to carry on these conversations in the years ahead.

In the latest installment of this series profiling RET portfolio companies and their executives, we talk to Tripty Arya, CEO and Founder of Travtus. What is the inefficiency in the real estate industry that makes Travtus necessary?

There is something of a disconnect in real estate because it is largely a transactional asset class, but it also has the burden of operations. If it was a truly efficient asset class, it would be more tradable and scalable.

Real estate’s inefficiencies come largely from opacity of information and the significant labor cost associated with operations. Travtus aims to create an operational solution that enables property managers to scale across a larger portfolio without a significant increase in their workforce.

How do you solve that problem with Travtus?

We took a variety of approaches when exploring the problem of how to scale operations across a growing portfolio. First, we took a human approach, then a software and database approach, and eventually landed on the machine learning approach.

The technology we ultimately developed enables property teams to be much more efficient by taking many of the “long tail” property management issues off their plate. The machine-learning-powered system first reviews email correspondence, service requests, and other information to gain a 360-degree understanding of the property and how residents interact with it and then works as a virtual customer service representative that responds directly to resident communications.

When we were in the discovery process, we realized that machine learning has the highest chance of success because it thrives when there’s a large variety of fairly small tasks that have to be done.

We first use our model to identify these tasks not just for an industry but on a company, community, and even resident level. This information allows transparency into the operations, which then assists with the next steps in the journey. Most long-tail tasks are best handled conversationally; the items that are more repetitive then become candidates for automation. Through this process, there are operational and performance indicators that become the byproduct of the process and additional inputs for efficiency.

Essentially, we solve the problem of scalability by bringing machine learning to insight and decisions, instead of a pure focus on workflows.

How does your technology differ from your competitors’?

The shift in machine learning as a mainstream branch of technology has really allowed us to build a category-defining solution with Travtus. In other words, we have the privilege of being able to take a new approach to business problems without the bias of old technical stacks. This is very important to our growth plans as a business and also a very clear differentiator for our product.

Our unique approach is to solve our clients’ problems using a machine learning platform and architecture as opposed to relational databases — resulting in a much closer replication of the human approach. Unlike any other solution, we focus on handling everything rather than deploying departmental solutions – ultimately improving a broad variety of day-to-day management tasks. This is crucial for our clients, for whom separation of tasks is not always easy and cost transformation is dependent on a variety of task automation as opposed to purely departmental solutions.

If you weren’t a proptech executive, what would you be doing?

Before I was a proptech executive, I was a practicing architect and real estate developer, so I would probably still be doing that. If you ever need someone to learn how to solve problems creatively, put them on a construction site with a deadline and a budget linked to their own money!

What is the hardest thing about building a winning team?

The hardest thing about building a winning team is learning how to say “no”. There is a risk with every business that the pressure to perform or grow can open the door to people who may not be the best fit for your team at that stage. Think of your business as an athlete and your team as its coach. The needs of the business change as it performs better, meaning the type of team it needs also changes. One of the hardest parts of running a business is ensuring that the team you have is constantly evolving professionally and personally with the business. I’m extremely proud of the team we’ve created at Travtus, which was built with patience and awareness of our strengths and weaknesses as both individuals and as a team.

What advice would you give to a young entrepreneur just starting out in rent tech or proptech?

Take the time to understand the business of real estate before diving head-first into the technology. Many young founders develop solutions based on their experience in a specific team within the industry or from a consumer perspective. This can be dangerous because oftentimes they are missing the whole picture. For example, if you are selling rent tech, your business needs to understand what it means to own and operate all those homes holistically. Once you can do that, the second most important thing is to ensure the solution you’re working on is scalable.

There’s an old trope about real estate being slow to adopt technology. Do you think that is still an accurate characterization?

Technology adoption is usually synonymous with change management. The pace at which any new tools or innovations are adopted is usually linked to the need for and value of that change. The real estate industry is currently dealing with many headwinds of change, and I think if the technology innovations available offer practical solutions to the current challenges owners and operators are facing, adoption won’t be a problem.

What’s next for Travtus?

It’s business as usual at Travtus. We are currently executing on our ten-year plan which includes continuous research with product and market expansion. In the coming year, we’re hoping to create tools and insights from our machine-learning platform that make decision-making and operations simpler for owners. We want to better leverage our data to help operators learn, train, and optimize their workflows, resulting in lower costs and better retention. This will involve taking complex decision-making processes and distilling them into simple assessments and insights using our predictive technology.

We will also provide operators with an online platform to access useful knowledge, providing them with the skills and information they need to make decisions quickly and accurately, without sacrificing quality. Ultimately, our goal is to make decision-making and operations effortless for our operators.

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