MIT’s Real Disruption Series Examines Multifamily TechnologiesApril 28, 2017 - By Mike Hoban
Boston – The MIT Center for Real Estate’s “Real Disruption” series turned its focus to the multifamily sector recently, with a panel discussion featuring a pair of startups aiming to revolutionize the rental experience for tenants and a third launching a platform that will allow developers and owners to achieve optimal rents in any U.S. market. The program was the seventh of the pioneering series, which examines how technology is radically changing the way that the industry operates – from crowdfunding of projects, to Big Data and blockchain technology.
Held at the Fort Point Room in the Atlantic Wharf Building before a gathering of approximately 125 CRE professionals and students, the panel was organized by Jamie Pennington, director of acquisitions at multifamily developer Beacon Communities (and MITCRE alum), and moderated by Stephanie Williams, president of Bozzuto Management Company. The panel included Susannah Vila, co-founder and CEO of Flip, a startup that brings renters wishing to sublease and their potential sublessees together; Brian Colin, CEO of VirtualApt, which uses robots and virtual reality to provide tenants and commercial users with a more realistic virtual walk-through tour of rental space; and Marc Rutzen, co-founder and CTO of Enodo Score, an analytics tool that measures the institutional investment grade of multifamily properties.
Aimed primarily at millennials seeking short-term rentals, Flip is an 18 month-old startup that allows renters to sublease their home, apartment or room to their pool of sublessees, who have been completely pre-qualified using their technology. Current lease holders can post apartments that they wish to rent out, and potential subletters can select a space and execute the new lease online. “We work as a matchmaker, everyone is pre-qualified, making it easier to get approval from a management company to do a sublease,” says Vila (daughter of PBS’ Bob Vila of “This Old House” fame). Payments and security deposits are administered by Flip (with the money held in escrow) “so everybody is kept safe from scams or flaky renters,” promises Vila.
Flip has qualified over 30,000 sublessors to date, with 3,200 leases signed, and Vila reports that they are “trusted” by owners managing over 50,000 units. “This is a market that’s been completely overlooked. People my age (early thirties) and younger need this, and no-one is providing this for them,” she says. “We’ve been focused very narrowly on people between 20 to 35 who are changing relationships, changing jobs, going on an adventure – that want to sublease. And they’re really taking to us and we’re growing.”
VirtualApt was similarly created to fill a market need – providing renters with an accurate virtual view of apartments and commercial space – and came about as a result of the experiences of its CEO. Colin founded his company based on his frustration with trying to find an apartment in Manhattan. “The bait and switch scams drove me crazy,” he recalls. “Trying to find a two-bedroom, two bath apartment in Manhattan doesn’t seem like the hardest thing, but I would spend a week and see a half-dozen apartments that were just different than what (the landlords) said.”
He sought to change that, and after a few enterprises using more conventional modes of operation (including founding his own brokerage), Colin recruited a team to help develop his groundbreaking robotic technology. Using a four-wheeled tripod outfitted with a computer, 360-degree camera and sensors that can roam properties, VirtualApt can produce highly choreographed, immersive videos that a normal video camera could not hope to replicate. With the technology, they are able to map (in real time) up to 500,000 square feet within 30 seconds. The robot then “tours” the space, mimicking a person walking through the facility, and the images provide realistic dimensions and depth.
The videos are available in multiple languages, and can be seen on any type of device. “We’re trying to exactly re-create the walk-through tour that people are having when they’re walking through a commercial or residential space,” says Colin. “Now anyone in the world can view 10 apartments in 20 minutes from the comfort of their home or office in the language of their choice.”
Enodo Score’s Rutzen got the attention of the audience by declaring, “Currently the way that people use data is real estate is completely wrong.” He then explained that, unlike twenty years ago when there was little data available, firms such as Co-Star, AxioMetrics, and REIS, have filled that gap, and “today there’s too much data, and people aren’t using it effectively.”
So Rutzen and his firm developed a predictive analytics platform that generates an objective composite score to determine the institutional investment grade of multifamily properties. They did so by applying machine learning to the data that people were already using to formulate investment strategies, and can now can provide clients with additional insight to correctly analyze that data to make better development decisions.
“We’ve got very granular information on the types of amenities that are popular in that market, the average unit sizes, percentages of every unit type in that market,” says Rutzen. “So we inform developers exactly what is going to get the highest rent premium, the highest potential revenue, in a market before they actually invest any money in a market analysis or buy any of these expensive data products,” he asserts.
Following the event, Beacon Communities’ Pennington said the motivation for putting the program together was to make owners and developers more aware of what tenants in the evolving marketplace are desiring, particularly as the market heads into a slower cycle for rent growth. “The idea for the panel was to keep the landlords on top of what is happening in the market,” he says. One of the trends is that “residents are wanting shorter and more flexible lease terms, and people need to figure out how to make that work.”Susannah Vila, Flip Brian Colin, VirtualApt and Marc Rutzen, Enodo Score