Covid-19 is the agent of change driving advances – and acquisitions – in a sector long-resistant to tech.
By Troy Hooper, Xinyi Jiang and Rachel Stone
Property technology deals are expected to accelerate this year as Covid-19 forces the digital transformation of an industry historically resistant to change, executives and others say.
Automated apartment matching, virtual home tours, renter portals, site management and contactless solutions across home loans, payments, title insurance and escrow services are reshaping how real estate is bought, sold, leased, and managed. Similar trends are taking place in commercial real estate, where measuring air quality and other health variables are doubly important.
“What Covid-19 has done is shine a bright light on the opportunities in real estate to automate a wide variety of policies and procedures,” said Daniel Cunningham, founder and CEO of Leonardo247, a Redondo Beach, California-based real estate management software startup. “It’s on everyone’s radar.”
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demonstrates the premium investors are placing on so-called proptech, said Cunningham. The purchase price represents a 36.5% premium over RealPage’s volume-weighted average cost in the 30 days leading up to the deal announcement. Cunningham also pointed to last year’s deals for Opendoor and Porch Group to further demonstrate his point. Both of those proptech players went public via mergers with special purpose acquisition companies (SPACs) at lofty valuations that he said investors validated by buying their respective stocks at even higher prices on the open market.
Multiple SPACs have shown interest in proptech businesses, including San Francisco-based rental marketplace Apartment List, Atlanta-based home-buying platform Knock, and El Segundo, California-based PeerStreet, according to their executives, who all told Mergermarket their businesses are on public market trajectories.
Lionheart Acquisition Corporation II and Property Solutions Acquisition are among the blank-check companies scouting for targets.
Last month, Compass, a New York-based real estate brokerage startup that heavily markets its technological prowess, filed paperwork to launch an IPO of its own.
Other disruptors like Chattanooga, Tennessee-based tech-enabled moving company Bellhop and San Francisco-based residential real estate marketplace Sundae plan to raise more private capital before pursuing public listings, according to their CEOs. Although nothing is imminent, co-founder Gregor Watson said Oakland-based home rental marketplace RoofStock could eventually go public or sell to a large strategic like Amazon
Carmel, Indiana-based Realync could also be an acquisition target after raising capital in 2020, according to co-founder and CEO Matt Weirich, who named RealPage and Santa Barbara, California-based Yardi Systems as logical buyers for its virtual leasing and engagement platform for multi-family residences.
Other attractive startups to watch, according to a sector advisor, include three-dimensional virtual home tour provider Matterport and “iBuyer” Offerpad, which raised capital in 2020 and 2019, respectively.
In addition toAirbnb, RealPage, Yardi, Zillow and Amazon, the latter of which entered the property management space in September with “Alexa for Residential,” the advisor pointed to Appfolio
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, Lehi, Utah-based Entrata and Cleveland-based MRI Software as potential consolidators.
It’s not just startups that have targets on their backs. Some incumbents in the space could consolidate too, as Zillow and Trulia did in 2015, he added.
Based in Los Angeles, Troy Hooper (troy.hooper@acuris.com) oversees IPO and SPAC content for Mergermarket, while Xinyi Jiang (Xinyi.jiang@acuris.com) and Rachel Stone (rachel.stone@acuris.com) report on financial services and technology out of Mergermarket’s news bureau in Charlottesville, Virginia.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
