Why Miami Is Florida’s Proptech Capital

It was unheard of in the 1960s for a network television show to be broadcast from the Miami area, but Jackie Gleason was a big star who loved to golf and had the showbiz clout to shoot “The Jackie Gleason Show” in what he always promoted as “the sun and fun capital of the world.”

Today, a growing number of proptech startups and investors are located in Miami, but sun and golf are not the chief reasons by any measure. The city and its environs’ dynamic real estate market, especially multifamily properties, is a huge lure for the metropolis on the sea.

Florida on the whole boasts many proptech companies, but a number of experts pointed to Miami as the center of the state’s real estate technology. They cited firms like Deepblocks, an artificial intelligence tech platform that seeks to understand and predict real estate investment opportunities; DoorLoop, a national rental property management software company; Equity 305, a company that uses tech to make house-flipping easier; and Flow, a residential real estate firm that provides lifestyle, financial and other services on its platform.

In the venture capital realm, Lab Ventures is a Miami-based startup studio specializing in proptech and contech. The city also boasts a host of smaller VC investors, according to a list compiled by Confluence.VC, a private venture capital community out of Austin (itself no stranger to being a proptech hub not called Silicon Valley or New York). In addition, Miami is home to Lennar, one of the nation’s largest homebuilding and homebuying companies, which invests in proptech through its LEN^X portfolio.

Miami’s proptech and VC scene is growing due to a number of factors, including one in particular, said Ronald Kritzler, co-founder and CEO at LIKK Technologies, a Miami-based company that develops internet of things (IoT) and data-enabled safety and risk mitigation for real estate.

“I think we share with New York a concentration of high-rise buildings in Miami,” said Kritzler. “It’s not comparable to New York, but it’s attractive enough that we can compete. I know a proptech company from Canada that has been trying to get into South Florida because of the market size of buildings. The value proposition is exponential when you have over 10- to 20-story buildings versus the three- or four-story garden style.”

Kritzler’s original focus for LIKK Technologies was to find a solution tailored to the operation and business requirements of a high-rise condominium with a board association, he explained.

“We took all this into consideration when we built the first concept of the solution, and we found a building in Sunny Isles that was desperate enough to be the guinea pig for the system, and that’s how we started,” he said. “Since then, I will say 90 percent of our customers are condominium high-rises and the other 10 percent is a mix of the family office buildings and hospital facility buildings.”

Born in Venezuela, Kritzler moved to Colorado 26 years ago for graduate school, later settling in Miami. He founded LIKK Technologies in 2018, after he helped his father deal with water leaks in his apartment.

“We provide risk mitigation for water leak damages in facilities from residential high-rises to hospitals, office buildings and commercial real estate in general,” he said, adding that his father came out of retirement to become his partner in the company. “Our IoT-based solution deploys location-based sensors that will monitor 24/7, and we escalate any type of alert to multiple groups of people when water is detected.”

While most of Kritzler’s customers are from within Miami and Florida, he is a bit disappointed in the growth of the proptech startups in the state.

“There’s not as many as I would like,” he said. “I think most of them are coming out of New York state, but I’m seeing more and more moving here, and some coming out from here as well. But I think the major ones are just because of the nature of the need.

“Being based here is a big advantage, because a lot of these buildings want a very quick turnaround on service and response. The advantage that we have here in South Florida is similar to a different state. But, I think with more residential than office here, they have a high requirement of service and turnaround. That gives everybody who’s local or has a base strong enough locally, to take over that market.”

Although Miami is mentioned most as Florida’s biggest proptech hub, other areas, such as Tampa, are also growing. Based in Tampa, Funnel has grown as a renter-centric platform for the multifamily industry.

Elsewhere in Florida, Janover, a Boca Raton-based business-to-business, software as a service and capital markets platform is experiencing success, as well. Founded in 2019, the company is headquartered in Boca because that’s where its founder, chairman and CEO, Blake Janover, lives. That’s not the only reason, though, Janover said.

“So there’s obvious stuff, like a friendly business environment,” said Janover. “Certainly I have some roots here. One of the things that I think that’s great about Boca is we have really close proximity to FAU [Florida Atlantic University], a pretty big school that also has a great executive program that’s growing fast. We have Lynn University in Boca, and then we’re not too far from some of the other institutions in Broward and Dade. We’re right next to the tri-rail station, so you can kind of get here from anywhere. There are hungry kids coming out of FAU as sales or computer science majors. Is it one of the best colleges in the country? No, but everybody now has access to the most cutting-edge AI tools and can compete at a global level.

“So, yeah, great weather, good taxes, and we’re close to the beach.”

Even with the joys of Boca, Janover sees the unique pull of Miami and Florida’s other monied areas.

“In Miami, where there’s a lot of fintech and crypto, which I think is like a fintech derivative, there’s this real estate market that’s had these very insulated supply and demand dynamics,” Janover said. “So I’ve seen a lot of very interesting misfits and cool companies in the proptech and fintech, real estate-adjacent ecosystem, pop out of Miami, and a lot of formal capital has come in behind it. So, whereas proptech VC has definitely followed into Miami, there’s been interesting offices that have opened down there, but private equity has also come to Miami.

“I think a lot of cool things are going to come out of West Palm Beach also as money flows to Palm Beach. You know how it is: With money so goes real estate prices, and in comes tech to reduce frictions.”

Yuval Golan, founder and CEO at Miami-based Waltz, a fintech-proptech real estate investment platform for non-U.S. citizens, is a self-described “citizen of the world.” The Israeli native made Miami his home personally and professionally, the latter in part due to the huge Latin American influence.

“My core business is assisting foreign investors to easily invest into U.S. real estate, and the U.S. in general is a blue chip investment for many other countries when they want to build their wealth, passive income, fight inflation, or when they want to diversify their portfolio,” said Golan. “I always say Miami is the capital of South America. People there speak Spanish, Portuguese; and you also have Hebrew, Russian and many other languages spoken here. … The second reason is that Florida represents about a quarter of all foreign real estate investments in the United States. So, it’s great to be headquartered here, especially when you work in residential real estate.”

Golan also credited local public officials for fostering innovation and a business-friendly tax regime. There’s also the weather, of course, and the fact that a number of entrepreneurs decamped for Miami during COVID-19 lockdowns. 

“So the ecosystem is great, and the proptech scene has fostered and brought a lot of entrepreneurs into the ecosystem,” he said. “You can collaborate, speak, meet at events, and work together to a great outcome.”

Miami and Florida in general has a sunny proptech present and future, but to grow to its potential, it still requires greater incumbent real estate company tech adoption, said LIKK Technologies’ Kritzler.

“I think depending on the value proposition on which you’re focusing — if you’re in the savings area or the risk mitigation area or the operational area — I think at this point in Florida everybody now is dealing with the high expenses of insurance premiums, which are going up,” Kritzler said. “So, I think, next year and in the next five or 10 years, a lot of the proptech is going to be pretty much a fourth service for the market itself.”

The next spasm of growth will come after larger real estate servicers and owners realize their returns on investments from proptech. 

“It’s slow right now because of the fact that most of the property management or commercial real estate management were never that deep into technology,” Kritzler said. “So they have to digest and start learning, and even some of them setting up departments that understand technology and know how to evaluate technology before adapting it. You still have a lot of technology that is not that clear on the ROI. They will also need time to digest the real ROI, and not what companies are proposing.”

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