By Jack Stubbs
In a commercial real estate market increasingly influenced by trends in the tech sector, it’s little surprise that many industry professionals are looking for new ways to sort through and synthesize transactional data and information.
Reonomy, a platform founded in 2013 in New York, provides a way for brokers, investors, lenders and other commercial real estate (CRE) tech professionals to sort through information about commercial real estate properties and leverage data in their decision-making process.
We recently spoke with Rich Sarkis, CEO of Reonomy, about what the platform helps industry professionals to accomplish, how the goals of the company fit into broader trends around commercial real estate tech and the role of technology in an ever-evolving commercial real estate industry.
What can you tell me about Reonomy (where and when the company was founded, current goals of the company, etc.). In a nutshell, what does the platform allow industry professionals to do?
Reonomy was founded in 2013 New York and initially operated exclusively in the 5 boroughs. In 2017, we launched our National product serving all 50 states. Industry professionals can access Reonomy through a subscription to our web app. Within the platform, users can prospect 47 million properties, analyze each of these properties in detail and make contact with owners.
Reonomy provides the tools to prospect for target properties through dozens of search filters like geography, building area details, past sale date, and debt information. Once properties have been identified, users can analyze each property, exploring building level, sales and debt data. Finally, Reonomy pierces the LLC to uncover ownership contact information. This gives owner access through a phone number, email and/or mailing address.
Who are some of Reonomy’s primary clients? What is the platform’s reach, both geographically and demographically?
Reonomy serves a range of client segments. We work with commercial real estate professionals from appraisers to brokers to other commercially interested segments like service providers. Some of the larger, well known clients include Newmark Knight Frank, Marcus and Millichap, CBRE, Cushman and Wakefield, JLL, Keller Williams, Brookfield, RKF, TD Bank, Walker & Dunlop.
Reonomy data operates on two different web platforms: one New York City platform specific to the 5 boroughs, and a national platform covering all 50 states with coverage of 3,000 counties, 20,000 municipalities and 47 million-plus properties. We have clients from around the country ranging from hedge funds looking to understand the underlying properties of a REIT to service providers looking to make contact with owners.
One of the platform’s primary goals is to streamline and and simplify the process between individuals, companies and property data at all levels of the searching and transaction process. Can you elaborate on the importance of this collaboration and transparency?
Compared to other investable asset classes, commercial real estate has been massively underserved by data and tech. We see it as an opportunity to help develop efficiency and clarity within the industry. The Reonomy platform provides one place to search all aspects of property history and ownership data. It consolidates research that traditionally occurs across multiple platforms into a one-stop location.
By streamlining this process, Reonomy saves users immense time on those daily tasks. Consider an investment sales broker looking to prospect for new listing opportunities. Within a few minutes on the Reonomy platform, they could generate a targeted lead list of properties that haven’t sold in the last ‘X’ years that fit their geography and asset class focus. This list could include thousands of owners with phone numbers, mailing addresses and emails for their outbound efforts.
In the current age of CRE tech, many platforms strive to provide similar services that Reonomy does (e.g. locate and synthesize data, search for properties, track portfolios etc.). Why should an investor choose Reonomy over another CRE tech platform? What makes Reonomy stand out from the crowd?
In terms of breadth, no other CRE data platform offers property details on over 47 million commercial buildings and parcels across the country. On our national platform, we don’t limit users to certain areas, instead giving them access to over 3,000 counties. This is of additional benefit to professionals that are outside of the main metro areas who have not had the same CRE tech offerings.
Reonomy’s technology first approach to aggregating data allows us to have this greater breadth that doesn’t shirk depth of coverage. We have exclusive partnerships with data companies and sophisticated algorithms that gather information from hundreds public records and secretary of state data. This means that our data is not relying on what a broker or owner feels like sharing about the property on that day. By combining all of these data sources, we are able to aggregate and analyze for the most accurate and detailed property and ownership information on the market.
Data in Reonomy is run through multiple steps to test validity and ensure users have access to the most up-to-date, accurate and comprehensive information. Reonomy can put together a detailed report of almost every commercial property in the US that includes zoning information, sales data, debt history and contact information of an individual or holding company.
What are some of the challenges involved in ensuring that Reonomy is implementing the most cutting edge technology into its platform?
There are always trade-offs when you are attempting to be at the forefront of implementing technology. Deciding which features to prioritize and understanding what our customers want and need is hugely important. We want to scale at a pace that ensures current users are getting the most robust data possible by continually updating our data feeds and algorithms, but also moving forward to launch new features and provide a platform that serves the industry as best as possible.
Successful products are those that are intuitive and easy to use. Is there a steep learning curve associated with the product, and does it scale across different devices and contexts?
One of the best things about Reonomy is how user-friendly it is. Our filtered-based searching makes navigation easy. Within a couple of minutes, a sales broker could find every multifamily property with 5 units or more in the Seattle area that hasn’t sold within the last 10 years. Likewise, a debt broker could just as easily find all the commercial mortgages originated in a given year by a given lender.
In the current CRE era—where everything is becoming instantaneous, digital and accessible from anywhere—privacy and security remain pressing concerns. How does Reonomy account for these concerns in its software and algorithms?
As a data company, protecting data is a constant, ongoing issue. We put a number of processes and precautions in place to protect the security of our data. We consistently work with our users and partners to ensure the sanctity of this security. This can include vetting our users intended use case to ensure they are not being abusive with the data.
It seems that online platforms are increasingly prioritizing automatization, complex algorithms and a tech-driven approach rather than leaving the process in the hands of any one individual. Do you have any concerns that this more “human” element in the real estate industry is being put on the back burner?
One thing that we believe is still necessary and important in this industry is actually building relationships. Most of the time, commercial property deals are personal and extremely specific. Reonomy offers accurate ownership information that allows brokers, investors and any other user to make that connection and to better understand a potential prospect. We are in the business of facilitating relationship growth and deal making—not replacing the human element of the industry. What embracing tech offers is a faster pace for dealmaking and a reduction in time spent in the due-diligence phase, allowing more time to be spent understanding and building relationships.
How is rapid adoption of technology more of a necessity rather than a preference for companies?
By adopting technology, CRE professionals are getting ahead of any competitor who has yet to make use of data and tools that assist in all aspects of the deal making process. Alternatively, if they are not using technology, they are letting competitors gain an advantage. Commercial real estate is fairly behind other financial markets in terms of data integration. As adoption continues, it will be more and more necessary to have the best data to remain competitive in the market.
The other necessity is the consideration of opportunity cost on your time. We have investors and brokers individually saving over 10 hours of research a week through Reonomy. When you have the potential to save that much of your time, it quickly becomes a necessity.