CompStak Breaks Into Multifamily Market With RealPage Partnership
As momentum in commercial real estate investment continues to shift away from the office market, proptech firms that cater to investors are following suit.
CompStak is breaking into the multifamily sector through a new partnership with residential data firm RealPage that will integrate the rental market information into its platform, the firms announced Wednesday.
"For many of our clients, they had not ever invested in multifamily before, so they came to us and said, 'We’re using you for office, retail and industrial data, can you provide multifamily as well?' And we said, 'Sorry we don’t do that,'" CompStak CEO Michael Mandel told Bisnow in an interview. "We realized there was a real opportunity in that."
Starting Wednesday, users of CompStak's platform will see an option to add multifamily data including rents, concessions and vacancy rates to their service. Mandel said it will cost them an additional subscription fee, but he didn't disclose the price.
CompStak has 30,000 members with access to its lease and sale comparison data on the office, industrial and retail markets. The company, founded in 2012, raised a $50M Series C round in November, bringing its total fundraising to $78M. Mandel said RealPage is the firm's third-largest investor.
"We realized this multifamily data that they had is absolutely best in class, it’s a phenomenal data set, and most importantly it's really granular data," Mandel said. "It was a super complementary data set, and it allows us to provide a one-stop shop for clients to cover all of the asset classes they want."
Multifamily has become a more attractive asset class for CompStak's clients in recent years, and Mandel said he doesn't see that trend slowing down soon.
Even before the pandemic, Mandel said investors saw yields shrinking on office deals and decided to shift into the booming multifamily sector. Then after the pandemic struck, multifamily recovered much faster than office, and landlords managed to raise rents dramatically over the last year.
Today's macroeconomic volatility, with the Federal Reserve hiking interest rates in response to rising inflation, will also likely lead more investors into the apartment sector, Mandel said.
"Now we’re in an interesting situation where interest rates are going up, there’s a massive decline in people buying homes, and multifamily should remain a very safe asset class in juxtaposition to that," Mandel said.
The largest player in the commercial real estate data space, CoStar Group, has also been pushing more into the residential sector in recent years, acquiring companies in both the apartment rental and single-family housing segments.
Mandel said he isn't hiding the fact that he wants to be the market leader in the commercial real estate data space. He said the RealPage data is different than its competitors because it includes concessions and effective rents, rather than just asking rents, and he thinks the new partnership could help CompStak pull business away from the industry giant.
"Many of our customers are also CoStar customers, probably the majority," Mandel said. "But we do often see our customers leaving CoStar for CompStak, and the more data offerings that we have, the better-positioned we are for that to be the case."