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HqO is coming to Canada
American real estate technology firm HqO has signed its fifth Canadian customer and will open a Toronto office when the border fully reopens between the two countries.
“We enhance physical spaces with digital experiences,” is how HqO chief revenue officer Mark Rosenthal summed up his Boston-based firm’s end-to-end tenant experience operation system for office buildings.
- The platform is catching on both north and south of the border.
In Canada, HqO signed its first client early in 2020 and has steadily added more. Slate Asset Management came onboard earlier this month and joins Ivanhoé Cambridge, Cadillac Fairview, Hudson Pacific Properties and Spear Street Capital.
HqO has evolved from a digital media and events business which was founded in 2009. Kevin McCarthy, Chase Garbarino, and Greg Gomer created the original firm, American Inno, which was focused on helping to bolster the innovation economies of American cities.
They sold it to Advance in 2015 and started VentureApp, which focused on developing software for businesses and connecting entrepreneurs with experts in the startup community.
They evolved to focus on real estate, and HqO’s current iteration started in late 2017. The first customer was signed in early 2018, while the platform was launched in its first building that spring and it’s been growing ever since.
What HqO does
HqO provides landlords with a digital universal remote control for the building via a smartphone application that can be distributed to everyone in the building. The app will get people into the building with mobile access, register guests, book facilities and resources, order food and drinks, provide information about transportation options and more.
“It removes friction from the user by consolidating the experience of the workday in one place,” Rosenthal told RENX. “For landlords, it helps them create direct lines of communication to end users in the building.”
HqO provides data to give building owners and operators a better idea of how their building is being used and by whom.
“You can make much smarter and more data-driven decisions from what users are telling you through their actions in the application,” said Rosenthal.
Pricing is based on a per-square-foot basis and upon the type of integration and services the customer wants. The average cost ranges from five to 10 cents per square foot and Rosenthal said most building owners pass that cost on to tenant companies.
HqO is in buildings totalling 154 million square feet in the United States, Canada, the United Kingdom, Ireland, France, Luxembourg, the Netherlands and Norway. The portfolio is comprised of a mix of asset classes and building sizes.
“There’s a wide range of buildings, from highly amenitized class-A downtown office towers to suburban class-B or class-C, old brick, non-amenitized buildings,” said Rosenthal.
“Some customers are really focused on how they position the building from a leasing standpoint. Others are focused on gathering data on how their space is being used.
“Some are looking for better and more streamlined efficiencies in communication or consolidation of technology for better property management.
“We work with them to define their outcomes and then build a program that’s going to deliver those outcomes, regardless of building size, type or class.”
Rosenthal described how a customer in New York City is using HqO:
“We have a really sophisticated tech-enabled building where we built integrations around their access control system, their visitor management system, their work order management system, their resource booking system, emergency notifications, food and beverage, flex space, parking and so on, all consolidated into one user experience on a mobile device.
“Their goal is to be the leader in tech-enabled real estate in the City of New York.”
Rosenthal cited a study which concluded the top two things commercial real estate executives are looking for coming out of the pandemic are related to data analytics and customer experience.
He said landlords can use HqO to partner with tenant companies looking to incentivize people to return to the office and ease the transition from remote work.
HqO has added almost 90 million square feet to its portfolio since the onset of COVID-19, including 40 million so far in 2021, according to Rosenthal. The company has tripled its revenue and doubled its employees in the past 14 months.
HqO services more than 60 commercial real estate clients worldwide, including Columbia Property Trust, Vornado Realty Trust, Nuveen Real Estate, Jamestown, Grosvenor, Landsec, J.P. Morgan Asset Management and Endurance Land.
HqO announced on April 14 that it had raised US$60 million in Series C funding from venture capital and commercial real estate firms. It has raised US$106.9 million to date.
Previous investors Accomplice, Insight Partners, JLL Spark, Navitas Capital, DivcoWest, Allegion Ventures and Pagliuca Family Office participated in the round, joining new investors PruVen Capital, Cushman & Wakefield and Suffolk Tech.
The funds will support HqO’s rapid growth, primarily by increasing head count to power the development and delivery of the platform. It’s also adding staff to support customers with on-boarding, training and programming content into the app.
HqO will expand its existing footprints in Boston, New York City, London and Paris, and open new offices in the U.S. Midwest and on the West Coast.
HqO in Canada
HqO’s platform is being used in 20 assets comprising more than 10 million square feet in Alberta, British Columbia, Ontario and Quebec. Hence the move to open an office in Toronto.
“We’re super-psyched about the Canadian market and can’t wait to get up there and meet some of the customers in person,” said Rosenthal. “We have big plans for Canada and are modelling it on the expansion we’ve already had in New York, London and Paris.”
Slate will roll out the HqO platform at some of its properties later this summer. They’ll include: the 620,000-square-foot Stephen Avenue Place in downtown Calgary; and Slate’s 1.25-million-square-foot midtown Toronto portfolio of office and retail space at eight properties around Yonge Street and St. Clair Avenue.
HqO users will have access to tailored building amenities such as on-site fitness classes, tenant giveaways and discounted pricing for goods and services at retail locations within the Slate portfolio.
HqO has just made its first Canadian hire to oversee sales and is hiring an engineering team of eight or nine. It will also add employees to deal with customer success, tenant experience and other areas.
The company is looking for Toronto office space from afar and its executive team will spend time in the city to push things forward after the Canada-U.S. border fully opens.
“We’re very much believers in face-to-face, in-person relationship-building,” said Rosenthal. “That’s how we’re going to get the best results and build the strongest partnerships.”
Can design save the housing crisis?
Can California’s biggest city – and possibly America’s least affordable one – redesign its way out of the housing crisis?
Los Angeles’ housing problem has been decades in the making. Half a century ago, the city was a booming metropolis zoned for up to 10 million people. It pioneered low-rise density with fourplexes, bungalow courts like Horatio West Court, Irving Gill’s modernist masterpiece, and dinbats (those campy walk-ups on stilts, bearing make-believe names like Casa Bella and Camelot).
But the trajectory of housing in Los Angeles during the later years of the last century paralleled that of many other American cities where density came to be equated with urban decline and white residents resorted to redlining and other racially restrictive practices to keep out Black people and immigrants. Slow-growth policies slammed on the brakes for multifamily housing construction, so single-family zoning became the norm. Leaning into its freeway system and an environmentally oblivious mythology of the desert as an endless terrain for exurban expansion, the city, by 2010, had shrunk its zoning envelope to 4.3 million people.
So where’s the middle ground?
In 2017 California legislators took a step in the right direction, streamlining the approval process for the construction of accessory dwelling units — ADUs or granny flats, as they’re also called: garage apartments, backyard cottages and studios added to existing houses. ADUs are less expensive to build and to rent than most other housing types, so they’re an obvious and relatively simple way to increase housing stock. They have come to account for more than 20 percent of new housing in Los Angeles. To accelerate their production, Hawthorne recently commissioned a number of preapproved ADU designs, providing Angelenos with a means to avoid bureaucratic limbo when negotiating with the city’s Department of Building and Safety.
But ADUs alone can’t bridge the city’s housing gulf.
So in tandem with Mayor Garcetti’s Office of Budget and Innovation, Hawthorne, a former architecture critic for The Los Angeles Times, came up with “Low-Rise,” a project harking back to the Case Study House Program that Arts & Architecture Magazine organized after World War II to devise new paradigms for residential design in Los Angeles.
“Low-Rise” entrants were tasked with cooking up, not pie-in-the-sky utopias, but pragmatic, communitarian schemes for duplexes, fourplexes and mixed-use, multilot corner developments that could, hypothetically, and ever so modestly, densify the city’s single-family neighbourhoods.
Unlike with the plans for ADUs, none of the “Low-Rise” proposals can actually be built under the city’s current single-family zoning laws — and the forces arrayed against changing those laws remain formidable. Two years ago Los Angeles City Council members voted 12-0 to oppose SB 50, a state upzoning bill, in a purely ceremonial move reflecting the influence of an anti-development coalition like the ones that have emerged in other cities with runaway housing costs. In Los Angeles’s case, the coalition unites NIMBY homeowners from the wealthy Westside who fret that development could deflate property values with housing-insecure renters in underserved neighbourhoods who fear it will lead to displacement.
I can’t think of a greater obstacle to solving homelessness and the affordable housing crisis in America today than this coalition.
“Low-Rise” doesn’t envisage swaying NIMBYs who can’t be swayed, but instead it aims to show Angelenos, who have legitimate concerns about their place in the city’s future, visions of what communities designed for them could look like.
The competition staged listening sessions with residents. Entrants — there were nearly 400 of them — were required to hear what the residents said. Jurors included affordable housing developers, architects, tenants and city officials.
In essence, they were looking to resuscitate a legacy of low-rise multifamily architecture. As Carolina A. Miranda, the Los Angeles Times arts and urban design columnist (who grew up during the 70s in one such condo complex in the city) summarized the logic behind “Low-Rise”: “We’ve been doing density all along. Now we simply need to do it better.”
Winners produced various examples of what better can look like. A proposal by a Brooklyn-based architect, Vonn Weisenberger, pictured a suite of gabled, green-roof buildings with prefab cores and modular apartments sharing a shaded courtyard. The design mixes vernacular allusions to the old bungalow court and to Cliff May’s classic ranch houses. The plan includes a ground-floor community room or commercial space, facing onto the street, so residents in the neighbourhood could, say, walk to a corner grocery store to pick up milk instead of having to drive somewhere.
Another plan, by Studio TAAP, a young team from Austin, Texas, imagines a corner development featuring shared kitchens to keep construction costs down and to cater to multigenerational households who suffered during the pandemic from the mismatch between their desired living conditions and an anachronistic housing stock conceived to serve increasingly outdated notions of nuclear families.
In the “subdivision” category, Louisa Van Leer Architecture and Antonio Castillo add duplexes at the rear of single-family lots opening onto midblock alleys (Los Angeles has some 900 linear miles of them), which, as more duplexes get built, could gradually be greened.
And Omgivning and Studio-MLA, from Los Angeles, won the competition’s fourplex category with a scheme called “Hidden Gardens: A Balance Between Inside and Outside.” It involves two-story homes with ground-floor bedrooms and light-filled, upstairs living rooms and kitchens illuminated by clerestory windows and opening onto trellised balconies. Foot and bike paths weave through lawns and vegetable gardens. A recent study by McKinsey suggests fourplexes are the least expensive multifamily residences to build from the ground up in Los Angeles, so the best-suited to produce low-rise affordable housing in meaningful numbers.
The obvious question remains: Will pretty pictures change minds?
Who knows. The architecture in “Low-Rise” may at least jump-start a conversation. The Los Angeles mayor’s office is now working with the Department of City Planning to determine how to incorporate ideas from the competition in updates to the city’s housing and community plans.
A century ago Berkeley became the first California city to adopt single-family zoning, with the explicit goal of restricting Black and brown people from certain neighbourhoods. Earlier this year Berkeley joined Sacramento as the first two cities in the state to move toward banning single-family zoning.
Los Angeles is a more complicated case. But it is also the capital of reinvention.
During the second half of the last century and the beginning of this one, Los Angeles County fell a million homes behind, relative to its population growth, after becoming a single-family mecca, thanks to federal freeway subsidies, subsidized home mortgages, some ingenious modern architecture and the mythology of the pool, the garden and the individual — in essence, a vision of paradise that ended up being primarily for white people.
But that’s the ultimate point of “Low-Rise.” The city has remade itself before.
It can do it again.
FUNDED THIS WEEK
🔥🔥🔥 Hot numbers!
With heatwaves across the country, splash into some new numbers for FTW. Let’s dive into this week’s Funded this Week:
- VERO, the modern leasing infrastructure for owners and renters, today announced a $5 million Series A funding round, jointly led by Eleven Capital and Bienville Capital. This new investment, which will be used to expand VERO’s centralized product offerings and grow the team, brings the company’s total funding to more than $9 million;
- Infina, which calls itself the “Robinhood of Vietnam,” announced a $2 million seed round led by Saison Capital and executives at Google and Netflix. Infina launched its app in January 2021, and most of its users are looking for alternatives to investing in long-term asset classes like real estate;
- Lessen, an Arizona-based marketplace platform that unites property owners and service professionals to deliver property services, closed a $35 million Series A funding round. Led by Fifth Wall, the company intends to use the funds for new tech products, new field operations teams, and market expansion.
Propstack has a solution for buildings
Proptech and data company Propstack has tied up with DelosTM, a US-based wellness real estate company, to provide advanced air purification units to help improve health and well-being in indoor environments.
“As we look to the future of wellness in real estate and our communities, we can expect smarter use of technologies and innovations, new metrics to capture the Return on Wellness (ROW), and a deeper exploration of the relationships between our environments and our health. Both existing and new buildings can benefit from these evidence-based solutions,” said Raja Seetharaman, Propstack’s co-founder.
- Through the collaboration, Propstack will accelerate the adoption of Delos’ advanced air purification units to improve the quality of indoor envrionments across the country.
DelosTM is a wellness real estate and tech company that offers an array of evidence-based technology and solutions for residential, commercial and hospitality spaces.
More CRE firms pour investments into the proptech sector
The proptech sector has taken a major leap forward over the past year, with many startups successfully scaling up and providing windfalls for their investors, and the industry it serves has taken notice.
A host of commercial real estate companies that historically only invested in physical properties have become venture capitalists, pouring money into funds that back proptech startups. Fund launches over the past two weeks from MetaProp and RET Ventures demonstrates the range of the industry’s investment.
These new fund launches come as the proptech sector continues to grow with massive amounts of investment in recent years.
- In 2020, 425 proptech companies took in $23.8B in investments;
- In 2019, the sector received $31.6B in investments.
A string of multibillion-dollar initial public offerings over the past six months have bolstered investor confidence in the space. Smart lock startup Latch went public June 7 through a special-purpose acquisition company, or SPAC, listing that valued the company at more than $1.5 billion. In April, SmartRent.com went public through a SPAC that valued it at $2.2 billion. In February, Matterport went public through a SPAC with a value of $2.3 billion. On December 21, Opendoor used a SPAC to go public at a $17 billion valuation.
And there’s more where that came from.
Work remotely, or go on a trip?
Many tech startups are choosing to keep employees working from home and are pivoting to planning several elaborate company retreats per year to allow employees to meet and bond, the Wall Street Journal reported this week.
For many companies, corporate retreats are becoming a necessity as they try to figure out how to maintain company culture with remote employees.
For tech startups, the new model for these retreats means that “PowerPoint presentations in hotel conference rooms are replaced by more enjoyable endeavours: mountain biking in Colorado, swimming with dolphins in Mexico and dancing the tango in Argentina,” writes the Journal.
- The business-software company, People.ai Inc., closed its headquarters in San Francisco as well as most of its other offices, and ditched plans for a new office in London. Instead, the company’s real estate budget is being fueled into several company trips, reports the Journal.
- The startup incubator All Turtles Corp. also closed its offices in Paris, Tokyo, and San Francisco and is planning “twice-yearly excursions” for all its employees.
“The genie is out of the bottle for remote work and if we wanted to bring everyone back to headquarters I don’t think it’s doable,” Oleg Rogynskyy, CEO of People.ai, told the Journal, adding that doing so “is how you lose your best employees.”
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As we try to get the word out about Skyline, we want you to help spread the news as well.
More information to come.
- Virginia establishes a smart city testbed
- The “hub and spoke” future of the office
- The difference between contech and proptech, explained by Foundamental
- Time-saving tech is coming to two new US border crossings
- Startups charts a (long) path toward homeownership
- Miami developer Tony Cho has a grand vision to build sustainably and deliver huge returns
- Atlanta co-living firm pivots to building affordable housing owned by community
- Real estate agents look to AI for a sales boost
- Compass‘ stock down nearly 30% after IPO
- Coworking operators emphasize collaboration as they rework space for return to office
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