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.
ANAX Ventures is an early-stage PropTech investment fund focused on identifying and testing solutions that impact the urban landscape.
Tell me a little bit more about your organization, a brief introduction
I am a lender-developer in New York City with nearly two decades of experience. I’ve focused primarily on the mid-market multifamily sector, developing projects from 20 units all the way up to 218 units. During the pandemic, we faced some challenges with an asset and I began to search for a solution to the problem(s) it was facing. It was during that time I began closely examining data analytics and became fascinated by how technology could help optimize the building and construction industry. My partners and I began to really study the proptech space and realized the incredible role that technology would play in the future of real estate. Initially, we found 9,000 companies in the space and started to research each of them. This resulted in a 250-page document that we used to influence what is now ANAX Ventures, an early-stage proptech investment fund focused on identifying and testing solutions that impact the urban landscape. As developers, we noticed the resistance from other developers to truly integrate ‘new’ technology. We knew we could really differentiate ourselves by uniting two normally disparate aspects of real estate – construction and technology – and creating a holistic approach to real estate development. In the process of building ANAX, we encountered a lot of people on the construction and development side that didn’t understand enough about technology or the language and its potential impact. That’s when I started a podcast, Real Tech Talk, which interviews leading technologists, CEOs and founders in the proptech space. In addition to driving awareness, it really opened up our deal flow, and we wound up investing in 11 companies in 2022. Those companies are currently up 70%, with a very simple thesis – to make a better tomorrow.
Is there a specific vertical you are focused on in investing across Proptech? What made you pick certain avenues within the space?
We have a simple thesis – when we look at investing in proptech companies, we are looking at four verticals – development, construction, management, and tenant experience. If the technology or company fits into any of those buckets – it’s something we are interested in investing in. In our second fund, we’re focused on the reduction of cognitive labor, so we are highly focused on AI-driven technologies that will make construction, development, management, and user experience more efficient through creating a single source of truth.
Since positioning your career in this space specific to proptech, how have you seen it grow over the past few years? Of course, you have the niche experience of being a developer and being on the ground floor level. How have you seen things expand and change?
We ventured into proptech in 2021 amid the pandemic, a time that was pivotal for our industry and the adoption of technology. It was during this time that people were rapidly adopting new ways of living, working, and shopping, and technology was at the forefront. I think this period allowed for more exploration and open dialogues about proptech because of the dire need to evolve. Unfortunately, after proptech’s explosion, macroeconomic factors caused by the pandemic led to some uncertainty about the industry’s future. In the past year, there have been a lot of mergers, acquisitions, and some failures, ultimately resulting in a great deal of speculation about the investment in proptech. But, our belief is strong – proptech will technologically transform the real estate industry. Even though there is still a long way to go, I think people are becoming more accepting about the role of technology in real estate. We are considered early adopters, despite entering the industry after it was already in its growth stage, because of our understanding and belief in how proptech can improve construction and development process, as well as the experience for future building occupants.
Expand on the technology that your portfolio companies implement and the ways they differ from other players in the space (we specifically discussed Younity, Rockval, and MyTower).
First and foremost, our thesis is to invest in the ideas we believe in and the companies that aim to solve real problems. But, at the end of the day, it’s an investment in the people too. We look at each company and its founder and try to understand the strengths and weaknesses, and where we can add value. As builders and developers, we have a firsthand understanding of industry nuances, so the companies that understand those pain points and are actively solving them are the ones we are the most interested in.
For example, one of the company’s we invested in, Rockval provides an innovative platform that allows real estate professionals to streamline their deal cycles. The platform provides users with all of the data and workflows you need to make smarter, more informed investment decisions. It solved the underwriting pain point, which can really slow down any investment process if you don’t have the right manpower. The platform offers data connections that drive automation through the entire workflow and allows users to analyze deals faster.
Another one, MyTower, was simple – they are a tenant experience application run by three incredibly innovative people that already had a successful marketplace. Their goal was to expand into the United States market. This was a right place at the right time scenario – we knew this app would be successful in multifamily buildings. The property intelligence management platform enhances property and service management by bringing the entire ecosystem under one virtual roof.
Lastly, Younity, was interesting because it delivered a software platform that re-imagines the buildings communication infrastructure. Simply put – it created a smart WiFi network to help improve the performance and experience for buildings and occupants. The simplicity of their mission, which is to provide high-speed internet, is brilliantly executed and allows landlords to control costs and provides tenants with lightning-fast, reliable internet.
What does the coming year hold for your firm? What are your expansion plans?
On the lending and development side, we are providing much-needed capital and development expertise to distressed assets across New York City. Since traditional lenders have become more cautious, ANAX presents a unique opportunity for rescue capital by leveraging its proprietary technology, technical expertise, and industry relationships to adapt to the market cycle and fill the financial gap. So, we are looking to help developers and investors with stalled projects, providing the capital needed to see them through to completion. On the proptech side, we are constantly seeking out the latest innovators and visionaries in the space, and we are looking to add several more companies to our portfolio this year. We have just completed raising our second fund, and we are looking to invest in some companies using AI or are focused on ESG initiatives.
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