Hightower & Mighty: Real Estate Leasing Catches up with the 21st Century
While new technology is constantly transforming existing industries, certain sectors are just a little less eager and slower to adapt than others.
In the real estate industry, some property managers were long resistant to change, even though their jobs revolve around keeping track of intricate data, such as lease dates, vacancies and leasable square footage. Often, they seek to turn the flood of information into trend charts and easy-to-follow patterns. Until recently, much of this record keeping was handled through Excel and, even more shockingly, on paper (one step above the caveman’s drawing)! Now, real estate professionals are finally getting some serious new tech tools, complete with apps and customized interfaces, to handle the management process.
Most management companies handle lease tracking through biweekly meetings between asset managers and brokers. Together, the teams review a lengthy list of executed leases over time, letters of intent, prospects, dead deals, tour schedules and steps within the negotiation process. All of this information is manually generated and, of course, subject to human error. There are two companies that dominate the digitalization of this process: Hightower and View the Space. Both automate tracking, cutting out human mistakes and making the end result more easily digestible. And all of the information is available in pre-made charts, generated automatically by the service.
Several industry professionals explained to Commercial Observer that their transition to one of these services began with View the Space, which specializes in only video tours of properties. From there, they found Hightower, and ultimately settled on its service instead.
“I got involved because of a competitor,” explained Mike Moran, managing principal at Cassidy Turley. “I was trying to understand the technology after they had presented their product, so I looked at other options to understand the space. I came across Hightower, gave them a call, and got onto the demo. I realized they were at the forefront of the industry and technology.”
Another industry source, who asked not to be named, praised Hightower for infusing new life into his leasing business. “We realized we could see [in] real time what was going on with our leasing—when a deal has been executed, or if someone is touring the space. If someone knows a tenant that we have done a deal with at another property on the East Coast, and they’re touring a West Coast property, historically we wouldn’t have known about this, but now we get a notification on that. We can also tell if a deal takes certain brokers longer, we can see how many tours one broker is generating compared to another. We are working with Hightower to see if we do a broker event, what is the turnaround ratio from that event? None of that was possible before without a bunch of Excel spreadsheets that one would have to build.” (It should be noted that Thrive Capital is an investor in Hightower. Thrive is run by Josh Kushner, who is the brother of Commercial Observer publisher Jared Kushner.)
For Elizabeth Bueno, associate director of commercial leasing at Two Trees Management, the pile of paperwork and constant Excel updates led to the firm signing with Hightower. “When we first started looking for something, it was first on the paperwork side to eliminate it. We started looking into Salesforce and then Hightower. Hightower is a little newer and it is geared toward specifically commercial.”
View the Space, on the other hand, has a different perspective. View the Space allows “the larger owners to understand their data in more impactful ways,” said Nick Romito, chief executive officer and co-founder of View the Space, pointing to the larger size of their company as a point in its favor. “It allows them to understand the analytics at both the portolio level and individual unit.”
While both services offer the same tools, Hightower specializes in customization over View the Space. “The flexibility of Hightower and the willingness for them to jump on any situation we have, any need and request we have, it is so open book with them in a really positive way,” explained Mr. Moran.
Ms. Bueno agreed, “We chose Hightower because they are willing to work with us to try to tailor what we are looking for because we aren’t just looking for the back-end lease information…They were willing to work with us the most.”
As the commercial real estate industry increasingly turns to Hightower for its management needs, Brandon Weber, CEO of Hightower, is prepared to take on the constant challenges of customization, which make his company stand out of the pack.
“We built our platform from the ground up to be flexible,” Mr. Weber said. “There is flexibility built into the software itself: you can run analysis through different lenses. We know every customer who signs up for Hightower will have certain, customized needs, whether it is a set of custom reports that are missing and critical, or if there is a set of key performance indicators. We customize along those lines. One of the differentiations we have heard is that we make good on our promises. We are in the business of making large landlords and brokerage firms successful.”
At the tail end of October, Hightower launched Hightower 360, which allows its software to further streamline the leasing process. It is the “expansion of Hightower’s initial leasing platform to also include current tenant racking and inventory management for the first end-to-end asset management solution on web and mobile,” the company said in a statement.
Though Hightower is quickly gaining fans, both the CEO and experts in the field understand they are going against a long-standing tradition of paper and Excel record keeping.
“Half the battle is to design wonderful software, the other half is train, onboard, and nurture the customer as we shift a 25-year-old workflow,” explained Mr. Weber. Mr. Moran noted agents on their team were quick to adopt the technology, using it directly through the mobile application, rather than the web tool.
As they work against tradition, these companies focus primarily on major commercial leasing clients. For smaller managers and residential owners, the transition to technology of this sort may still be off in the horizon. Ben Carlos Thypin, a managing partner at Progress Group, which owns and manages multifamily and commercial properties in New York City and other markets throughout the country, said: “I think the main thing to consider with these new technologies and changing from the old ways is that the margins on managing smaller buildings are smaller. Management can be very costly for a small owner. If these technologies, in the end, are going to decrease the cost of management, it would be silly not to adopt them, but if they are going to increase the cost of management in the short run, that will decrease adoption by some traditional small-scale owners.” Currently, Mr. Thypin primarily uses Excel as the company works to evaluate new technologies.
And for those companies that have successfully adopted Hightower, many employees have taken it all the way, going from paper and Excel, to active-phone application usage. One executive found that younger brokers and West Coast brokers use the phone app almost exclusively, whereas older brokers and East Coast brokers tend to use the desktop service.