Welcome to the ‘Commercial Bulletin’ with Emma Callahan, a Q&A focused on changemakers and leaders in the commercial real estate space.
The objective of these interviews are to gain deeper insight into the current state of the industry and the emerging trends that are shaping its future. From the impact of new technology on property management to the changing demands of tenants in the modern market, our Commercial Bulletin gives you an inside look at the complex world of commercial real estate.
AirGarage is a full service parking management company. We provide boots-on-the-ground operations and build proprietary technology to help property owners increase their net operating income.
Tell me a little bit more about your organization, a brief introduction
AirGarage is the fastest growing parking management company in the United States. I think of AirGarage as a vertically integrated parking operations and technology company.
A lot of people ask me what that actually means, so what I mean by this is AirGarage is not a pure software company – which a lot of people assume because we’re based out of San Francisco – we are doing full service property management of parking assets. To give you an example, when we take over the management of a new property we are taking responsibility for all of the day-to-day operations required to keep that facility running smoothly including cleaning, security & enforcement, snow plowing, etc. Where we differentiate from other parking management companies is that at our core we are a technology company. We have an incredible team of in-house engineers that build products that make parking a seamless experience for drivers and enable us to generate more revenue and decrease operating expenses for our 250+ owner partners.
How did you first start your career in the Commercial Real Estate space?
It was really by accident. I have been in tech for the last 10 years and I really prefer to work for companies that operate in the ‘physical world’, rather than software-only products. I briefly worked for a Zillow competitor in 2014, then worked for an ‘on-demand’ delivery company briefly after that before joining Lyft for a few years. In 2019 after Lyft IPO’d I decided I wanted to go back to an early stage startup, then I came across AirGarage. To me, parking seemed like a space where there was still a huge opportunity for technology to change the industry. I decided to jump on board and I’ve been here ever since, coming up on 4 years this June.
What are some of the challenges you have faced within the Commercial Real Estate sector?
I knew almost nothing about commercial real estate when I joined AirGarage so it’s been a steep learning curve both for me personally and for us as a company. When I first joined AirGarage, our customers were mostly smaller mixed-use properties like hotels or churches. Selling to customers like these was fairly easy, we didn’t need to be experts – they weren’t making any money on their empty parking lot, and we were giving them the opportunity to do so, it was a no brainer for them.
As we moved up-market and started to work with larger, more sophisticated players in CRE we had to adjust our approach very quickly. We had to change the way we pitched our service, build new features, and really step up our operations game to make sure we could deliver on the promises we were making to those early customers. It was really tough at the time, but it was also a lot of fun seeing us learn and improve so quickly. We’re still facing some other challenges – for example, we’re only a 5 year old company, so some property owners can be hesitant to trust their assets to a start up, or won’t even allow us to apply to an RFP because we haven’t been in business long enough. We’re working hard to build trust in the industry, but it takes time, we’ll get there.
Since positioning your career in Proptech, how have you seen the space grow?
In the past when people would mention Proptech they would always bring up companies like Zillow, Redfin, Airbnb, etc. I never really liked the idea of calling them Proptech companies because the founders of those companies didn’t start those companies based on their own experience in CRE, or have an idea about how to make the industry better – they were just retroactively labeled ‘Proptech’ because they were loosely in the ‘real estate’ industry. I think that’s changing now. You’re seeing founders enter the space with experience in real estate, or to build companies and products specifically to make the commercial real estate industry better, more efficient, etc and I think because of that, combined with the unique state of CRE right now post-covid, we’re going to begin to see some really cool things getting built over the new few years.
Expand on the technology that your organization implements in the commercial real estate space and how you differentiate it from other offerings in the space.
The parking industry is really fragmented. You have hundreds of parking management companies around the USA, from publicly traded companies operating nationwide down to small local operators with 1 or 2 properties in a single city.
Most of these parking management companies are pretty old school, many of them still have attendants sitting in garages taking cash payments or sending property owners financial statements by fax at the end of each month. They’ve resisted modernizing because they’ve had no incentive to change – it would be risky for them and expensive.
This has started to change over the last few years because drivers and property owners are demanding it. Drivers want convenience, not to carry cash and deal with a grumpy parking attendant, and owners want more transparency into their operations and better technology. This has put old school parking management companies in a tough spot because they don’t know how to, or even want to, build their own technology. It’s expensive, unpredictable, and fundamentally they are not technology companies – they can’t go out and hire the best software engineers and product managers, that’s not what they do.
So as a result of that there’s been this developing ecosystem of ‘parking technology’ companies – hardware companies, payments companies, analytics companies, marketplace consumer apps, enforcement companies, etc. – These companies sell a SaaS product, or a hardware product to the old school parking operators and it’s kind of a win-win for the operator, they get access to better technology and they don’t have to spend the money to build or maintain it.
The losers in this situation are the property owners and the drivers. They may not realize it, but they are now paying for multiple services. You have the parking management company taking their cut, the hardware companies taking a transaction fee, the analytics company charging a monthly subscription, etc. It’s not the parking management company taking a loss to pay for all of these supplemental services, those costs are being passed through to property owners.
AirGarage is approaching the industry in a different way. As I mentioned earlier, we are a vertically integrated parking management company and technology company. We have built a full suite of products in house that help property owners maximize their income, like the parking industries first real-time dynamic pricing system, and decrease their operating expenses with features like LPR-based enforcement. It’s definitely a harder company to build, doing both operations and technology, but it allows us to save property owners a ton of money on unnecessary operating expenses and gives us the ability to offer services & features that our competitors can’t.
What does the coming year hold for your company? What are your expansion plans?
We are growing really fast all over the USA and we are focused on continuing that growth. We’ve grown our sales team pretty significantly lately so we’re expecting our growth to continue to accelerate and we’ve released some super exciting new products over the past few months that we’re rolling out to our properties right now and we can’t wait to see how our partners like them.
What have been your learnings when it comes to attracting and hiring the right talent?
I used to take a more passive role in recruiting, waiting for candidates to apply, but I’ve learned that you really need to prioritize getting out there and finding ways to connect with the people you’re interested in. As far as hiring, I think I take a less structured approach to interviewing than most. I think you learn way more about a person when you can get them out of ‘interview mode’ by asking about things they’re not expecting. I like to ask questions about things other than their work experience, the stuff you usually find on the very bottom of someone’s resume like what they majored in, clubs they’ve joined, side projects they’ve worked on, etc. By asking questions about those things, you very quickly learn if the person you’re interviewing is innately curious and what they care about, and the interview tends to turn into more of a conversation that flows naturally when you hit those topics. You’re not going to learn as much about someone if you are following an interview script.
Where do you envision the CRE space heading in the next few years?
It’s a really unique time right now in CRE. Many cities are still not recovered from Covid and in some cases, like San Francisco, I don’t think they’ll ever fully recover. It’s going to be really interesting to see what happens, hopefully some of these cities will recognize that things aren’t going back to the way they were in 2019 and will begin to loosen up on zoning restrictions and find ways to adapt and reuse different types of properties. I think we’re starting to see some of it, and I’m optimistic that voters in some of these big cities will start to demand it over the next few years.
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