CEO Matias Recchia on How Keyway’s AI-Powered Software is Taking it and Commercial Real Estate in a New Direction

In 2023, Matias Recchia, co-founder and CEO of Keyway, saw a new horizon for the proptech startup. At that moment, he made the decision to change the growing firm’s direction.

Created as a machine-learning technology platform for analysts, brokers, sellers and buyers to simplify transactions below $20 million, the company reduced fees by 50 percent and transaction time by 90 percent.

However, Recchia envisioned greater opportunities for Keyway — along with higher value for its clients — by quickly evolving into a generative AI company for commercial real estate.

Philip Russo sat down with Recchia and asked him to talk about how Keyway has evolved and grown since then.

“We started around four years ago, and initially we built machine learning and data science models in order to source, underwrite and transact assets,” said Recchia. “And we were very successful doing that. We acquired more than $400 million in assets with our joint venture partners. Fast forward to 2023, and we saw the huge rise of AI. We believed it was going to transform software for all industries, and real estate was not going to be different. We thought hard about what’s the core of capabilities — data software development and technology. So, we decided to shift our strategy and focus to solely licensing software and building AI-based software for the real estate industry.”

Keyway’s team of 45 professionals, including 35 developers, data scientists and product managers, use AI for customers, as well as for the firm’s internal business processes. Its developers code with AI to interact with open- or closed-source customer data.

“We used our software initially to transact, to manage assets, review loans and sign leases. It’s almost like we had a three-year pilot with internal customers where we could really learn how firms did things differently. It’s very exciting to try to extrapolate that and start offering services to the industry as a whole.”

Multifamily is the first vertical Keyway targeted, focusing on rent, comps and revenue management, because property and asset management have become especially difficult in the current business environment, said Recchia.

Looking for ways to create greater efficiencies and decision-making, Keyway’s Document Copilot is an asset-agnostic software that is allowing the company to work with development and industrial sector firms, as well.

Keyway helps customers transition to digital management by demonstrating that it’s often better to partner with them, rather than to try to build their AI solutions internally. Much of this process involves educating customers about Keyway’s products and how they can aid productivity depending on the user’s core capabilities, technology, data and quant analytics.

“It may make sense to build your own AI tools, but for 95 percent of the industry where your core capabilities are raising capital, closing real estate transactions and managing assets, you’re much better off partnering or licensing third-party software,” said Recchia.

Having worked with major real estate firms such as Blackstone, Brookfield and Goldman Sachs, Keyway has piloted AI software solutions for customers to demonstrate the technology’s power, including products for sourcing, underwriting, document management tools, or its asset management and revenue management tool.

The game-changer of course was the rise of AI, which Recchia and his team quickly integrated into Keyway’s platform, which now uses AI to gather and get insights from unstructured data, digitizing documents to quickly access and gain those insights efficiently.

“Our Document Copilot has been a huge success in that area, which is clearly a pain point that folks have,” Recchia said.

Another AI software use case in which Keyway is currently seeing great traction involves easing the revenue management side, particularly for multifamily. Keyway is taking a fundamentally different approach than the rest of the industry, which up to now has focused on having proprietary data.

However, Keyway maintains that it is private and public data that should be used to make revenue management decisions.

“We’re leveraging all publicly available data, normalizing and structuring it, taking into consideration all of the regulation around it, and giving you a system that provides insights in terms of revenue management and recommendations,” said Recchia.

This ability to take any sort of unstructured data, getting insights from that data, and then combining rent information with crime and migration information, for instance, as well as with the performance of different asset classes to get insights, and being able to assess that data is quite powerful. The ability to have a single data repository and to get insights from that is huge for Keyway’s customers, added Recchia.

Another critical benefit of Keyway’s unique AI-driven software is that data safety is a huge concern for Keyway’s customers. The company provides its customers with software compliance, building “sandboxes” that are specific to the company by making sure that the data is encrypted, whether it resides on Keyway’s servers or is being passed to them viaAPIs.

All this sophisticated software is aimed at making the customer’s analysts and brokers more efficient by freeing up their time to make actual deals.

“At the end of the day, what makes a great transaction professional is the ability to see an opportunity where someone else doesn’t see it, the ability to build a relationship and to create that great reputation with people in the marketplace,” said Recchia. “And that takes time. The ability to negotiate and craft a deal are the things that humans will keep doing, because running the model, getting the comps, analyzing the diligence documentation, those are the things that we can do for the analyst and broker in seconds, not weeks.”

Keyway’s AI software platform is positioned to take advantage of what Recchia sees as huge growth in software for real estate, in general.

“Not because companies are going to be spending more money necessarily, but because companies are going to rethink their software stack and AI-based solutions, taking over a lot of what traditional software used to offer, but now in a much more efficient way in terms of reducing the time and effort that’s put into managing that software, but also in terms of lower costs associated with it,” Recchia concluded.