Property investment
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One of the most frequently cited issues with regards to innovation in real estate is that of siloed information and lack of transparency. Traditionally, incumbents have played their cards close to their chests, as the unique information they possess has been the source of their edge against the competition. With the advent of PropTech, however, this zero-sum approach has started to change, as data sharing is key to the evolution of technology and of the interconnected “smart everything” ecosystem the industry is working towards. A host of startups are working to drive change in the space, and incumbents are also starting to leverage their data sets in an intelligent fashion (for example Prelios’s Premium valuations product).
To date, valuation products can be classed in one of two categories: bespoke – and often expensive – paid-for assessments, and standardized free (or freemium, or otherwise affordable) online tools. Those for commercial real estate tend to fall into the first bucket, whilst the residential sector with its lower transaction values sees more of the latter. Both are growing in accuracy and significance, as the real estate industry continues to warm to the use of technology and seeks an ever-more sophisticated edge on the competition.
Though valuation data in commercial real estate (CRE) tends to be more closely guarded (or expensive), this, too, is starting to become more readily available. San Diego-based commercial real estate transaction platform Biproxi today announced both a significant $10 million seed round and the launch of Biproxi off Market, which the company claims to be a first-in-kind valuation product for commercial real estate (CRE). As a testament to the significance of valuations, CEO and co-founder Gordon Smith told me that he believes this tool will fuel demand on the platform to boost its next stage of growth.
Biproxi targets “middle market” commercial properties with values of up to $25 million, which according to the company make up 75% of the investment sales market in the US. It seeks to give independent agents tools to compete in this market, as well as supporting investors in their decision making process.
Since its launch at the end of 2018, Biproxi has ammassed 120,000 listings by over 4,000 brokers, providing them with a host of services ranging from marketing tools to NDA protected due diligence vaults. The goal is to combine all the tools an agent might need into one single platform.
The platform also provides a “Biproximateâ„¢” for each property, which Smith described to me as an algorithmically generated estimated valuation of the property, similar to Zillow’s Zestimate product offering, but for CRE. As of today, users will also have access, through Biproxy Off Market, to detailed property data, historical sales data, assessed property values and financing history for 32 million off market CRE properties in the US through their proprietary data partner. Whilst this data is available elsewhere through paid-for subscriptions, here it is accessible for free, as the company makes its money on successful sales.
Biproxi’s seed round was led by Greycroft, a venture capital fund, and its pool of investors included sector stakeholders such as Newmark Knight Frank and the National Association of Realtors. Stewart Easterby, Operating Partner at Greycroft shared that, “Biproxi’s team of industry veterans have combined their expertise to bring an incredible platform to the highly fragmented mid-market CRE marketplace. We see them continuing to innovate and set the leading edge in optimizing the future of commercial real estate.”
It will be interesting to see how Biproxi grows over the coming months, and how instrumental their new valuation service will be not only in driving traffic to the platform, but also in fuelling successful CRE sales.