Real Estate Technology

Authors: Lisa Cations and Tomasz Piskorksi (2020)

Stella Reyes, a recent graduate from Columbia Business School, joined a London-based commercial real estate investment company in October 2020, while the world was still in the throes of the COVID-19 global pandemic. In the United States, 40% of its workforce were working from home, leading to significant decreases in commercial real estate values, especially in large cities. In many countries, including the United Kingdom, most estate agents had shut down their offices, with in person viewing of properties banned, and construction of new homes and offices suspended. As a result, commercial real estate investments fell by 29% globally in the first six months of 2020 compared to the previous year.

Facing these challenges, the investment company was forced to reevaluate all of its investments. Reyes was tasked to focus her research on the viability of the co-working business model where companies typically took long term leases and then offered flexible memberships to customers that could rent desks or private offices on a month by month basis. Reyes’ firm had recently signed long-term leases with several co-working operators and the firm leadership wanted to assess the outlook for these investments in these uncertain times.

As she began her assignment, Reyes enumerated the key questions that would direct her research:  How viable was the core business model of co-working? What were the key drivers of its revenue? Could a co-working company’s operations be restructured so that they could survive the pandemic and adapt to a post-pandemic world?

Founded in 2013 by three experienced technology entrepreneurs, Reonomy offered commercial real estate (CRE) brokers, lenders and developers fast, easy-to-use property intelligence reports and software tools exclusive to New York City. The startup’s customer promise was to provide reliable NYC data and powerful analytics so CRE professionals could make faster, more secure and informed decisions. By 2016 Reonomy—with over 200 company subscribers and over 1,000 users—weighed several options for expansion: to invest in artificial intelligence (AI) and product development to enlarge its service offerings; to spend heavily on marketing to attract new types of clients in NYC; or to expand into more geographic markets across the United States. In this case, students will explore the competitive threats and investment requirements for each of the paths to growth as they consider which strategic option will satisfy both the founders’ goals and their commitment to investors—namely, growth and profitability within a reasonable time frame

Authors: Michelle K. Felman and Russell C. Platt

What customer and product strategy would enable proptech startup Ryfle to expand successfully?