16.12.21
In this week’s episode of The Propcast, Louisa speaks with Vincent-Charles Hodder and Sara Maffey from Local Logic. They talk about how AI can be used to build better cities that support sustainability and create great lifestyles for their residents. Vincent and Sara explain how the AI can help developers make their investments more profitable by understanding the data that exists outside the four walls of their buildings.
Companies Mentioned:
Shout Outs:
Key Insights From This Episode:
Keywords: Startups, Construction, Artificial Intelligence, Green Solutions
About Our Guests:
Vincent Charles Hodder
https://www.linkedin.com/in/vincent-charles-hodder-24567326/
Vincent is the CEO and co-founder of Local Logic, a location intelligence company that digitizes the built world for consumers, investors, developers and governments – delivering unrivaled clarity and actionable insights capable of creating more sustainable, equitable cities. Passionate about cities, tech, and how they can work together to change how our cities are built, Vincent has always been at the intersection of Urban Planning and Real Estate. Prior to co-founding Local Logic, Vincent co-founded a real estate and urban planning consulting firm and gained real estate experience working for a real estate development firm as well as a public affairs firm. Vincent has a B.A. in Finance from HEC, and studied Urban Planning at McGill University.
Sarah Maffey
https://www.linkedin.com/in/saramaffey/
Sara Maffey is the Head of Industry Relations at Local Logic, a location intelligence company, where she combines her passions for real estate development and placemaking with data analytics and PropTech. She is responsible for building Local Logic’s brand, product exploration and driving the company’s growth across the U.S. and Canada. Sara has deep experience throughout the built environment lifecycle. She previously served as the Managing Director of Placemaking and board member at commercial real estate services firm Transwestern, where she led the repositioning of major commercial assets. Her career also includes running her own consulting firm, Edgewood Strategies, and stints with real estate brokerage Cushman & Wakefield, the Federal Reserve Bank of Atlanta, the New Jersey Economic Development Authority, and a Presidential Management Fellowship with the U.S. Department of Commerce during the Obama Administration. Her career began in project management at Turner Construction in New York City. Sara holds a Master’s in Business Administration degree from Yale University and a Bachelor’s degree in Urban Design and Architecture from New York University.
Company Summary
Local Logic is a location intelligence company. We built a digital twin of cities, quantifying the built world using data and AI to interpret the $217T real estate market throughout the US and Canada. We believe our understanding of cities, from predicting macro development patterns to describing the micro experience of specific neighborhoods and sites, gives our users the ultimate edge. Local Logic delivers sophisticated location insights through webtools, APIs, one-click reports and a data analytics platform depending on your needs.
About Our Host
Louisa Dickins
https://www.linkedin.com/in/louisa-dickins-ab065392/?originalSubdomain=uk
Louisa started her career in property working at a well-known estate agency in London. Realising her people skills, she moved over to Lloyd May to pursue a career in recruitment. She now is a Director at LMRE, who are a specialist recruitment firm driven by PropTech and recruitment professionals, and Louisa oversees their 5 core areas. Louisa co-founded LMRE and provides a constructive recruitment platform to the new disruptors in real estate. Louisa is also on the board of Directors at UK PropTech Association (UKPA).
About LMRE
LMRE believe there is a better way to recruit. LMRE focus on a more comprehensive, client led focus delivering exceptional talent to the place at the time. They are passionate about the industry and passionate about people’s careers. LMRE spend time with each client to become and an extension of the business, and their transparency and core values help them grow with the sector. LMRE simplify recruitment and innovate with our clients and evolve the people driven, PropTech community.
Transcript
Louisa: Today on the Propcast, we will be discussing how AI software can optimize real estate investment decisions for all sorts of stakeholders. And our guests on today’s show are Vincent-Charles Hodder, CEO and Cofounder of Local Logic and Head of Industry Relations, Sara Maffey. Welcome to the show Vincent and Sara who are joining us from Canada and the US.
Vincent: Hello. It’s great to be on.
Sara: Great to be on Lou.
Louisa: Now everyone, we have been trying to get this podcast in for, I think, since about four or five months ago, and since then I have had the pleasure seeing both of them as guests at various events, drinks, parties, and I’m about to go see them back in New York, which is super exciting. But outside of our social life, on today’s podcast, you’re going to learn about Local Logics product, and for those who don’t know what it does, Vincent will be telling us all about it. But back to what we’re going to discuss, how we can use AI to predict how cities, neighbourhoods can basically make better cities. And this could be looking at the sustainability. It could be talking about communities. It could be talking about, how can you make them more profitable? I don’t know. Vincent is going to tell us all about it.
But then we’ll also be talking about, are there any barriers using data in AI in the industry, how adoption has changed? And then we’ll also be hearing about Sara’s journey into this world as well. And also, what their expansion plans are, which I’m sure they have quite a few sort of coming up, which we’re going to hear from both of them.
But without further Ado, I’d like to hear from Vincent and start the podcast questions with how he came to founding Local Logic and getting into the space. And also, Vincent, please talk me through your product.
Vincent: Sure. Yeah. So my family has been in real estate for a long time. So I was a young kid really immersed in that space and kind of heard the war stories of deals being made in real estate. So I was really intrigued and wanted to work as a real estate developer when I grew up.
So I was kind of that weird ten year old kid that wanted to be real estate developer. So I ended up going into finance and doing that kind of more traditional path and then quickly realised that if I wanted to have some sort of edge or a differentiated view of real estate, I needed to kind of have a different perspective.
And so I ended up doing a Master’s in Urban Planning, where I was really thinking that if I was able to understand the way that cities function, the way that people interacted with the built world, well, I’d have some sort of edge in real estate. And that’s where I met my two other Co-Founders who had very complementary backgrounds, one of them being a programmer, the other one being a scientist.
And we realised that there was this trove of data on cities that really wasn’t being leveraged in the real estate space. There was a few stakeholders, mostly urban planners, using that data to make decisions. But it was not being leveraged to its full capacity in the real estate industry. And so we really came up with the idea of saying, well, what if we’re able to use that data to try to quantify the vibe, the feel of a specific address, the specific area in a neighborhood, and then leverage that data in order to have a better understanding of how cities and location could actually drive value in real estate.
And so we started there and the idea was to try to start quantifying those cities at scale. So we started in Montreal, we were based, and then it quickly expanded to all the US and all of Canada. And so today we really try to quantify location at scale to drive decisions in the built environment.
And the fundamental thesis for the business is that by understanding cities, well, you have this kind of ultimate edge in real estate, where we’re essentially trying to quantify everything outside the four walls of any assets to optimise profitability and sustainability. And we think that by leveraging that data, we’re enabling data driven decisions, which ultimately will enable us to make better decisions as to what should be built where, and making sure that what it’s currently being built in our cities actually works for the people that live in them.
We’re really, really passionate about that mission. And we’ve assembled a team of urban planners turn data scientists working in Proptech.
So it’s a really cool area to be in. And I think there’s a lot of openness now to adopt more data technology, and it’s exciting to see decisions being impacted by the data that we’re providing the industry.
Louisa: Definitely. That’s an interesting skill set. Urban planners turned data scientists, they must be pretty hard to hire probability. Data is becoming slightly more sexier, and people understand the power of what can be done with accurate data. On my side for hiring people, that’s a tough skill set to find. But no doubt, I met a load of your team, looking forward to meeting a few more. You have a strong team sheet.
Now, Sara, we met probably about a couple of years ago when you were looking to break into the Proptech space, and obviously you had conversations going on with Local Logic for a while. And your background is obviously, Edgewood, Transwestern, you were in innovation. You’d done a bit of consultancy, done a bit of everything within maybe the traditional side. How did you get to your role of Head of Industry and meet this fantastic team?
Sara: Well, I have actually touched so many different parts of the built environment prior to joining Local Logic, and I think it’s really helped me in my current role.
I was most recently on the board and Managing Director of Place Making a Transwestern and I’m one of those Urban Designers that Vince talked about. So understanding cities and real estate is just something that I’m super passionate about. And I would say some big projects I was working on prior to joining Local Logic, my clients were really looking to use more data to make decisions on how much to spend on repositioning assets and using data to understand that culture and sense of place around buildings when they were doing site selection on the office side.
So when I was pitched Local Logic, I met the guys during their Series A raise. I was just instantly kind of obsessed with what they did, and it was such a great solution for everything that I’ve been looking for. The idea of actually using data to quantify objectively something that is so often described using gut feel or personal opinion by the brokers and various stakeholders in commercial real estate.
But I just really needed to join. And that’s how I joined as Head of Industry Relations, and I’ve been kind of leveraging all my personal experience in those different parts of the built environment to really bridge how to use our products and how to help the industry understand how to use more data and technology.
Louisa: I think you’re obviously very good at what you do. And it must be so important to have that previous experience where you have at Transwestern and being able to get buy in from these major developers and everything like that, who are they’d be slightly nervous about the words of AI.
Now you touched on what your product does, how it can obviously assist in development and investments deals to make better communities. Are there any sort of case studies you can talk us through? I always find personally, if I understand an exact name or case study and helps me understand a bit more about the product as well, and to connect to that.
Vincent: Yeah, I can give a concrete example. I think the whole premise of the business is that there’s a tremendous amount of data on specific assets, and most of that traditional real estate data focuses on everything inside the four walls of the assets, who’s the owner, what’s the programming of that specific asset? What are the characteristics of the asset?
And what we’re really saying is, well, guess what. Everything outside of the four walls of that asset has huge repercussions on the value of the asset, but also on what that asset enables people to do or the lifestyle that enables people to have. And so we really looked to focus on the characteristics of the location. Right.
And we have specific models that point to close to half of the value of an asset actually being able to be explained through the location characteristics. What we do is we help our customers leverage that location data in order to understand really two main use cases. The first one is, hey, I have this assets or this parcel of land. What should I build here? And the other one is I have a very specific investment thesis where I’m looking for properties with these specific characteristics. Where in the US or in Canada, should I be looking to invest or deploy capital in order to have those characteristics?
A really cool use case. It kind of falls in that first bucket, which is a developer that had a parcel of land, and they were trying to figure out what they should build based on market trends. They went to kind of the traditional appraisers and traditional consultants, and they had an idea where they were going to build these luxury townhouses.
And then all the traditional consultants said, Well, the market can’t sustain this. There’s no comparables that have been sold in the past year in this area. We can’t recommend that you build a specific real estate product.
And so they came to see us. And what we did was say, well, look, the characteristics of this specific location actually look very similar to other neighbourhoods elsewhere in the city. And what we’re seeing is that there’s a tremendous demand for this type of real estate product in these up and coming neighbourhoods. And so we believe that the market can sustain a specific absorption rate at this price point.
And so we actually recommend that they go out and build because the changes in the neighbourhood were pointing in the market actually evolving, actually, looking for these types of products.
The developer kind of followed what the data was saying and ended up pre-selling those units. I think it was like two days. So they sold out that project really quickly, and we’re essentially saying, well, look, we were able to look at leading indicators relating to location, and it enabled us to de-risk an investment that otherwise we wouldn’t have been able to de-risk. And we wouldn’t have done.
And so what we’re seeing is that there’s all these missed opportunities in real estate that were being taken advantage of because there was just half the story and that half of the story was, well, what is the neighbourhood telling us? How is that changing over time and what can the built form and for access to how the market is evolving over time?
So it’s a really good example that shows the value of bringing a data centric approach to our decision making in order to view risk investments and source opportunities that are maybe less obvious but are really interesting long run.
Louisa: And then I guess we’ve touched upon the communities, I guess the people component. What about the other big component that’s on everyone’s mind is the sustainability.
Before this, there was before this talked with Jason Stanley. For everyone listening, that’s Local Logics incredible Head of Insights, who was speaking to Annie Keaton. So how does the sustainability component time to your product?
Vincent: Sure. Well, what we’re seeing is we’re really glad this is happening in the industry where there’s a huge push to think about sustainability and I think there’s two major components that are currently being looked at.
The first one is kind of the operation of building, and then the materials that are being used to actually build real estate.
What we’re saying is, well, guess what? The way that we build cities actually has a huge implication on helping you move around, on the types of lifestyle that we lead. And so we believe it’s the responsibility of the real estate industry to really take a hard look at the types of communities. And there are certain communities that are more sustainable than others. So we think about car centric communities, for example, where the emissions related to the transportation of people, be it employees or be homeowners is huge to go and fulfil their daily needs, versus denser communities that maybe have been a with either a short drive away or where you can leverage more active transportation or public transportation, where the emissions of those types of developments are much, much, much lower.
And so what we’re saying is, as a developer, you need to start considering the long term impact of your development or of your assets on the way that people are going to be forced to travel.
And so I think if you’re considering the long term implications of those developments on sustainability, there’s a huge opportunity for developers to actually minimise carbon emissions by building denser communities, by making sure that the day to day amenities are actually within a reasonable distance to those amenities.
I think this is something that we’re seeing a lot of developers take on. Right. We were listening to conferences, and certain developers including Ivanhoe Cambridge, starting to think about these things, right.
We have customers that are actually looking to redevelop large, large assets, saying, well, the process of redeveloping an asset where I’m going to have to bring in new materials. There’s intensification of their operations. There’s maybe larger operating costs, larger emissions related to operation of more buildings, when in reality, what they’re doing is they’re intensifying the dark parts of the land. They’re intensifying their project to where maybe there’s a grocery store nearby. Maybe there’s more amenities where people are going to be less car to use public transit to get access to the things they need in the long term. The emissions related with that development are much lower.
Yet in the very short term, we’re purely looking at operational emissions and emissions related materials, we’re kind of seeing this disconnect between the way current ESG measurement happens with kind of a long term emissions related to city building. And I think as an industry, we are the ones building the cities in the future. And we need to start thinking about these issues, because if we keep building car centric communities, I think we’re not going to be able to hit the targets that we set as a society when it comes to missions.
Louisa: Yeah, I think there’s now everyone paying attention to, I guess, all parts of the built environments of the ecosystem. I think when people think Proptech, I do think mobility comes into that and you can see some of the investments that Fifth Wall is doing, obviously whether it’s into Lime or I don’t know, some eco cars and everything like that. So it’s just connecting the dots.
Now, obviously Vince went into the importance of developers taking into account sustainability.
Sara, for those listening and obviously you’ve been in the space for some time, and Vincent’s gone over how there’s obviously been an increase in adoption and more stakeholders taking sustainability seriously, and obviously since COP26 a huge amount changes and new metrics and targets have happened.
So what major trends and changes in the past five years or maybe an increase in the past year.
Sara: I think most recently I definitely noticed that investors are requiring the use of data and specifically the reporting on sustainability, but just in general, I think that there’s been a rapid increase in using data and technology to make decisions. I think that there are still firms out there that don’t have the ability to necessarily do that internally, which is why we have our platform, which is a great way to access lots of different kinds of location, intelligence and insights very easily. But it’s been really interesting.
I think even over the last six months, the demand for data via API that people are using data at scale. And that’s one of the things I was thinking about, as you were asking Vince about examples of how people use our data. We have seen a real increase in people who are acquiring at such a rate. Right now. And I think it has to do with sort of all of the capital that’s out there where they need to understand location at scale, and they’re using our location scores as a way of filtering and taking that first pass on opportunities.
And that’s just like one example. I think that just understanding things outside the four walls of an acid is an area that has really not been fully utilising data for quite a while. Everyone’s really been focused on the asset itself. So to me, that’s been just a huge increase that we’ve seen, even in the way that people are seeking us out and seeking out our insights.
Louisa: And now, obviously great to hear that there’s been a huge amount of uptake. What’s next for Local Logic? I mean, I think you said there was maybe a potential Series B coming up, and you’ve obviously launched in the US, or I guess I say launched. I think most of your customers are in the US, even though obviously there is a headquarters in Canada. So talk us through what your big plans are. And I guess maybe a bit about your growth as well. We haven’t really gone into that too much. But since I got to know your business a couple of years ago, I’ve just seen you guys go from strength to strength.
Vince: Yeah, I know. There’s a lot of exciting stuff coming up. I think Sara mentioned, I think data is becoming more and more used in the industry, which is a really good thing. I think for us, we’ve kind of been at this for two years now. And one of the exciting things is we now have close to seven years of historical data. So we’re kind of seeing negative shift through our data.
When we first started, the majority of our insights were kind of restrictive insights of like what’s there. Why does it matter how do consumers value the things? What we’re starting to do now is really help customers in predicting how areas change over time and where we’re going to cities and what actions we need to take in order to have the impact that we desire to have and build the communities that we want to build. So I think that’s a huge push that we’ve been making now and really helping our customers do that beyond that.
Like you said, I think we’ve grown. We’re kind of in a position now where I think we have enough insights. We have a really good customer base. We’re seeing that growth in our main market, which is the US. We’ve been hiring there now for over a year. We’re continuing to add people almost on a weekly basis, which is really exciting.
So over the next year, we’re going to be continuing that growth. And like you said, we’re starting to fundraise now, which is a really exciting process. And I think we’re seeing the excitement both from our customers and also new potential customers that are coming in on a basis now, which is really fun beyond that. And we kind of touched on this, but we’re seeing a huge push for sustainability and being urban planners at hearts.
This is kind of one of the core reasons why we’re here where ultimately we want to help the industry make better decisions in order to build better cities. Perhaps we define better cities as cities that are sustainable, sustainable from an environmental point of view, but also from a social point of view, from an economic point of view. And we believe that really de-risking those decisions that investment professionals are making by using data is going to be at the core of that. And so it’s just an exciting time to see some of those decisions materialise into real communities and hopefully have positive impacts on people that live in those communities. And so yeah, I think it’s just a generally exciting time to deal with the logic now.
Louisa: Definitely. For those listening in, they will be hiring more in the new year as they grow. So get in touch. That’s right.
We unfortunately coming nearly to the end of the podcast, but Vince and Sara are going to kindly walk us through the LMRE part. I don’t know why I say R like that, like a pirate, but I always do so, hey, right.
Sara, when you start us off with and I’ll talk you through as well. What sort of one of the major lessons you’ve learned throughout your career?
Sara: I love this question, Lu, because when I first graduated from Undergrad, I had studied architecture and urban design. And what I’m doing today with Local Logic is something that didn’t exist then not to make myself sound like an old lady.
But I think that I’ve just discovered with each role that I’ve taken a new aspect of participating in this built environment that really interests me. And so I would say my lesson is don’t get so stuck on thinking that you’re going to be this one thing and just kind of evolve with the industry. And it’s been a great ride for me going back to that advantage.
Louisa: We obviously went on this journey together when Sara was first looking for her next career. I felt like the industry has changed a lot, especially instead of our digital innovative to decide what we like to call Proptect. Now everyone wants people who’ve done more than one. So just be the broker for their whole life or just be in the digital team everyone’s looking for, like, dynamics skill set. So again, if you’re looking for your next step and I guess what’s the role to go into? Like, Founders, they want people from everywhere. And it’s generally like, as long as you can bring something to a business start up, you just need difference to creative people in it. So always ask the question, what’s out there? Because I’m sure there’ll be something.
Now. Sara, talker. Okay. Well, is there anyone to give a shout out to the product service?
Sara: Well, we recently announced a partnership with Climate Check. Vince probably has other people to mention, but it’s been really great to work with Cal Inman and his team. We have incorporated the Climate Check five major climate risks into all our products. And I think this kind of ties into where we’re going with sustainability and understanding the environment and the environmental impacts outside the four walls of an asset. So for me, that’s been a really exciting one that has just come up for us.
Louisa: Thank you for that. Okay. Right. And we go to our third question, what’s the most rewarding part of working in this space other than working with Vince?
Sara: Obviously, I was going to say working with Vince seriously, but I think for me, I’ve always been really interested in the future of the industry, and that’s what Proptech is. And the stuff that we’re working on at Local Logic is just so exciting to think about, not only pushing the industry forward, but we’re going to be impacting the way people live on a daily basis and how they experience the world in the built world. So for me, that’s probably the most rewarding aspect of working in prop tech.
Louisa: Right. And what’s most exciting then?
Sara: The stuff that we’re talking about sustainability wise, that’s the cutting edge right now. That’s what we need to be concerned about and focusing on. And I think that’s really cool to see that the industry is starting to actually value that and push for it. And so that’s really what I’m excited about. It’s actually starting to incorporate that kind of sustainability into the way that we’re making decisions and what Proptech offers.
Louisa: Awesome. Thank you so much for that Sara. And I will see you in a day or two.
Vince. Okay. Talk us through L-M-R-E part. What’s your major lesson that you’ve learned?
Vince: Yeah. I think this is such a fascinating question. I think I might go in the state of venues with Sara said, one of our values of Local Logic is to seek a diversity of perspectives. And I think from the get go, what we wanted to create as a company was, let’s get a bunch of really smart people together in a room with a totally different set of perspectives, experiences on these very difficult questions that is city building.
And together, if we’re able to throw these problems in the middle of the room and together, I think we’re going to be able to find some really innovative and different problems. Like I said, we’re urban planners, current data scientists working in real estate, which is kind of a very different set of skill sets and perspectives. And we’ve been able to recruit a team like, really smart people, really experienced people with very different backgrounds. And so it’s making for some really interesting discussions.
And so I think that the biggest learning for me in this process has been the importance of bringing that diversity and inclusive perspective, inclusive inclusivity into the decisions we take, the products we build and also the way we’re approaching industry and the way we’re approaching these really important and difficult problems that we need to solve a society.
But I think for which I think the real estate industry has a huge, huge part of responsibility in making sure that we’re building the cities, the neighbourhoods that are going to work for, the people that live in them, that work in them, that play in them and in the long term, are going to be sustainable for our planet.
Louisa: Awesome. Thank you very much. I love how much we’re talking about sustainability in this podcast. We didn’t actually discuss this before, but it’s great. So if I do these podcasts, learning more and more by product and what key parts of it are.
Okay. The last two questions, what is the most rewarding part in this space? What are you most excited about?
Vince: I think like a lot of people say that the real estate industry is old school and isn’t about the technology. I think there’s a tremendous amount of change happening right now in Proptech, and it’s super rewarding to see that change take shape. And I think technology being adopted. And I think this space is changing so quickly that it’s interesting to be part of that change, right.
Part of that momentum that’s currently happening.
And I think the fact that the cities that we build today are going to be here for the next 100 years, it’s rewarding to know that there’s kind of a legacy that we as an industries is leaving behind. And I think this is kind of our generation shaping the way that our seats are going to look and feel and be like for the next 100 years or so.
Louisa: Beautiful. And is there one thing one thing for what you’re excited about? Is that the expansion in the US? Is that the big old series B?
Vince: I think what’s exciting is kind of more and more adoption. I mean, we’re seeing really large brands adopt our technology. We’re seeing more and more people adopt data and more and more people realising that kind of understanding location and using leveraging more data is going to drive better decisions. So it’s cool to see that shift in the industry.
I think people are also excited about the fact that I think the first generation of AI is this black box where people would kind of just either trust or not trust the data that was coming out of a model. Whereas now we’re really seeing more explainability in AI. And I think that’s kind of a lot of our focus of our products is kind of helping the industry understand why model is performing the way it is. Why these sets are relevant in their decision making process. So I think that’s really exciting.
And then on the company building side, I think we’re going to go out and kind of continue to expand our products or services or clients, but also our team. I think there’s a bunch of challenges that are going to be setting, both on the recruiting side, but also on the management side of building out a company that’s going to be remote first, with people all over North America and especially beyond. I think it’s going to bring a lot of challenges, but I’m super excited to take that on, and I think it’s going to be a set of really rewarding challenges.
Louisa: Awesome. Look, Vince, Sara, it’s been a pleasure to finally do this podcast with you, and I’m so sad we won’t be seeing you at Propel Medpenter. Obviously can’t wait to see you and also brand new members of your team. And thank you for joining me. And I look forward to catching up with you both after the show.
Vince: Great. Well, thanks for having us.
Sara: Thank you.
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