Startups are reshaping the way that brokers and investors buy and sell commercial real estate. Reonomy is one of the startups leading this change.
CRE data startup Reonomy announced a new $16M funding round led by Bain Capital Ventures. The startup is also entering a partnership with Dreamit customer partner Newmark Knight Frank, which will allow the brokerage to layer Reonomy data atop its own data.
Reonomy is already working with real estate firms like Red Apple and Tishman Speyer, brokerages such as JLL and Cushman & Wakefield, and banks such as Wells Fargo and JPMorgan Chase.
What problem is Reonomy solving?
- The commercial real estate sector has no real solution for data aggregation and comparing that new data to an organization's proprietary data sets.
- For real estate investors, there's no easy way to find data on commercial real estate opportunities. Providing more transparency would make CRE a more investible real estate class.
- For brokers, there's a lack of transparency in the CRE market. Data tends to be closely guarded across firms as a way to maintain their strategic advantage. This has hampered the development of large data aggregators.
- Industry leader CoStar offers a large trove of data and has wide adoption, but the data is often suspect. CoStar manually collects data and often does not update in real time. Reonomy is structured like a tech company, with a number of public and private data sources updating in real time, as well as a machine learning algorithm that spots inaccuracies in data sets.
- CRE firms have been hesitant to share data with large data collecting companies because, in the past, those firms have repackaged data and sold it for profit.
- CRE professionals spend an inordinate amount of time collecting data, sifting through it, and filtering out the noise.
Reonomy aggregates data and uses algorithms to spot anomalies.
Reonomy starts at the top of the transaction funnel for CRE firms by helping CRE professionals identify potential properties. The startup aggregates all sources of data from public sources like assessor documents, county violations, title liens, tax and debt filings, and deeds. With this information, CRE firms can make quick decisions for their clients.
In addition to public data, Reonomy has a partner network of title companies, credit agencies, mapping companies and others that, combined with public data sources, give CRE professionals a much broader view of potential opportunities.
Instead of repackaging data and sharing it (which caused CoStar problems in the past), Reonomy uses the data from customers to train algorithms to detect anomalies. CRE firms keep their data hidden, but product users
CRE Professionals and Investors can use Reonomy to...
- Connect with the true owners of properties (with a constantly updating database) instead of wasting time finding contact information. Reonomy algorithms sift data to identify real estate holding companies to go beyond "surface level" ownership and find out who the actual decision makers are.
- Gather info to have more context when reaching out to owners. Reonomy allows you to see how much owners paid for properties, other assets that they own, zoning areas of properties, and recent renovation dates. With this information, you can tailor your initial contact in a more constructive way.
- Use sales history of properties to detect if they were bought in a downturn (maybe the buyer is looking to sell now that market has improved?).
- View property debt history to spot potential distressed properties.
- Reduce the time spent "walking the block" for opportunities. CRE brokers can use a radius geographic search to find opportunities and contact info for specific geographic areas of interest.
- Sort by land use type. If a CRE broker is working with industrial-focused clients, those opportunities will be very different from the types of CRE the broker would show to a developer of multifamily properties.
- Filter by the zoning code of properties.
- View entities associated with investment opportunities. If a hedge fund is investing in a REIT, for instance, it can use Reonomy to figure out individual properties and then analyze the credit risk of the tenants of those properties.
Reonomy has focused on the New York market up to this point (they collected data on about 330k properties). Now, the startup is expanding into new markets. There are about 40 million more properties across the country that can be added to the database.
By Charles LaCalle, Dreamit UrbanTech
Startups in the Dreamit UrbanTech program partner with large CRE firms like Newmark to pilot their tech solutions. Learn more: