Brooklyn Hip to Proptech

And like the post-9/11 era and the aftermath of 2008’s Great Recession, an exodus from Manhattan to Brooklyn began looking good to many professionals, including proptech founders, venture capitalists and workers. More space and a gentler hipster lifestyle beckoned many to establish their proptech businesses in what was once considered just another outer borough.

Austin Lo, founder and CEO at Williamsburg-based Peek, an end-to-end digital and AI-enhanced self-touring toolbox for residential leasing, has been a Brooklyn-based booster since COVID. Initially locating his company in the borough was “kind of an accident,” said Lo.

Having been a fully remote startup until 2019, Lo and his business partner were living on the Upper East Side and in Dallas, respectively. Then Peek grew from two to 12 people and the partners each happened to decide to move to Williamsburg.

“That’s where half of our U.S. team is today — all our design, product, and some of our sales team,” said Lo. “We essentially have a team-based, in-office policy. So, for product, we do a minimum two days a week in the Brooklyn office, and any team meetings with three or more people happen in the office.”

Bringing Peek to Williamsburg was the modern equivalent of the old commercial real estate saying that if you want to know where a company is headquartered, just find where the CEO lives. 

“Yeah, I live a block and a half away from the office,” said Lo. “I could stick my head out the window and see the building.”

Likewise, Lo found it easy to bring talent to Peek, as most of his New York City-based employees live in Brooklyn, with some in nearby Downtown Manhattan.

Brooklyn’s days of being a proptech startup desert are long gone, said Lo.

“I feel like there’s a critical mass of startups within proptech and outside of proptech,” he said. “If you walk into Devoción on Grand Street, half the people there are founders meeting with VCs. I’ve actually started avoiding that coffee shop for my meetings because I know there may be other investors who I have spoken to there. I don’t think I’ve ever had any trouble asking an investor or a potential customer or fellow founder in the space to meet me for coffee.”

Among the growing number of other Brooklyn-based proptech startups are Skipp, an AI-driven home renovations company based in Dumbo, and Kelvin (formerly Radiator Labs), which employs smart radiator covers, heat pumps and thermal batteries to reduce carbon emissions and costs in older apartment buildings, and is based in the Brooklyn Navy Yard.

The Brooklyn Navy Yard also houses other proptech-related startups such as 3lite, which facilitates global procurement of architectural finishes;  5Ten, a custom LED solutions provider for designers and architects; AV&C, a design studio that creates digital landmarks in the physical world; and AmbienTech, a customized lighting design and control company.

Among more developed proptech startups, Northspyre has found a home in Brooklyn’s Dumbo neighborhood, said William Sankey, CEO and head of product at the real estate development software company. One of the borough’s attractions is its relatively low-cost office space, at least compared to Manhattan, he said.

“It’s expensive relative to rent in other cities like Philadelphia or Houston,” Sankey said of Brooklyn, “but I think relative to Manhattan, my view is that for the quality of what you get, can you find somewhere cheaper in Manhattan than some places in Dumbo? Yes, but they’re probably not the best place in Manhattan.

“You can get a high-quality office space in Dumbo. It’s not cheap by national standards, but I think you’re getting a discount for the quality and attractiveness of space. I think that’s increasingly important these days.”

Sankey is now an Atlanta resident. But, having lived in Brooklyn for years, he has always been attracted to the borough’s community feeling in lifestyle and work.

“We’ve always been a Brooklyn-based company, so in a sense it’s hard to say what it’s like to be based somewhere else and to compare,” Sankey said. “The Brooklyn proptech community in general has a lot in common with one another, and this is one of the major tech hubs.”

To him, it’s comparable to a Manhattan enclave that’s long been seen as the city’s overall technology hub.

“Midtown South has become relatively established for tech companies, but I do think places like Brooklyn and, frankly, up and down the Brooklyn waterfront, especially in Dumbo, there’s this community for early-
stage companies that are scrappy, that are building something,” Sankey said. “Brooklyn is big, but it feels like a small community sometimes.”

Brooklyn is also home to multifamily-focused startup Tourus, a lead generation software platform for leasing teams. Lindsay Martinez, its CEO and co-founder, operates Tourus out of her home in Brooklyn’s Prospect Lefferts Gardens neighborhood. Martinez said her location was not just a function of her lifestyle in the borough.

“The opportunity is massive, even if you only focus on Brooklyn residential multifamily,” said Martinez. “There’s around a million units. Obviously, they fall in different categories, but around 70 percent of those are rental units. So, if you’re focused on multifamily residential, having that opportunity in Brooklyn as well as proximity to Manhattan, you can’t beat it.”

Still, some might quibble that Brooklyn proptech remains distinctly a David to Manhattan’s Goliath.

“It’s definitely got cachet to be at the Navy Yard if you are a robotics company. But if you want to sell software, I think most people would still want their office in Manhattan,” said Zach Aarons, co-founder and general partner at Manhattan-based MetaProp, a leading early-stage proptech venture capital firm. “There are definitely some more design-
oriented firms in Brooklyn, but not many.”

Other proptech organizations don’t need to have an office in Brooklyn to love it.

“We don’t have an office in Brooklyn, but I live in Brooklyn, Fort Greene, and my partner lives in Manhattan,” said Raja Ghawi, partner at proptech venture capital firm Era Ventures, which is fully remote.

“When working from home, I try to meet founders in person, especially those who are based in New York, but also those who are visiting from out of town,” said Ghawi. “And, when I’m working from home, like today, I try to bring them out to Fort Greene Park, grab a coffee, walk around the park, and have a good conversation there.”

It is not unusual for Ghawi to have three such Aaron Sorkin-like walk-and-talks a day in the park — around breakfast, lunch and dinner time, he said. As much as Ghawi enjoys living and working in the Brooklyn environs, he doesn’t necessarily see the borough as unique from the Manhattan proptech ecosystem.

“I don’t think most VCs think of proptech in Brooklyn versus proptech in Manhattan as that distinct anymore, especially after COVID, where most of your initial meetings are virtual,” said Ghawi. “When you meet a person between Lower Manhattan and northern Brooklyn, it’s a pretty short hop. I haven’t heard anybody saying, ‘Oh, there is a group of undiscovered talents in Brooklyn. Let’s go and spend extra time there.’ Usually, I’m looking at all these companies and founders, and, if some of them happen to be on the other side of the river, this is a non-issue.”

Brooklyn has also hosted proptech-focused conferences and other events that have increased the interest in being there in various ways, said Ghawi.

“When these kinds of events happen, you have all kinds of happy hours on the back end of them as well,” he said of the proptech networking opportunities. “Manhattan is still sort of the center of gravity just by virtue of having more people, but Brooklyn is building up its own little ecosystem on its own.”

Philip Russo can be reached at prusso@commercialobserver.com.