Waypoint CEO Wants To Help Others Avoid The Pain Of Data Collection
Property analytics is becoming an increasingly popular tool to erase the nightmare of tracking down property information. Tech platforms are expanding to provide easier access to property information and local market statistics.
San Francisco-based Waypoint is one such platform. Launched in 2015, it analyzes over 2.5B SF and $12B in operating expenses and provides users with a way to view all of their property information in one place. Bisnow spoke with Waypoint founder and CEO Diane Vrkic to learn more about how CRE tech is helping streamline many processes and taking away the pain of information gathering.
Bisnow: Why create Waypoint? What was missing in CRE that made you want to create this tech firm?
Diane Vrkic: I started my career in real estate at JLL doing valuation work, identifying and driving operation efficiencies, which was all work within client portfolios looking for financial opportunities. There was always a consistent thread: the information that we needed to do our jobs was difficult to obtain and time-consuming to gather. We were using third-party benchmarks that were often a year and a half in arrears to try and see how our clients’ portfolios were performing.
At the end of the day, real estate, for the most part, is an information business. You’re looking for deals, trying to get information and pull that in and put that back out to teams. The flow was really painful and really painful for me in the role I was in at the time. When I was starting my career I thought, ‘There has to be a better way.’ I thought about it a bit more and realized there was a real opportunity to help support investors and this time-consuming process by coming up with a technology platform that would take away a lot of the pain associated with assessing operational performance and improving performance.
When I was at JLL, I decided midway through my tenure to move to San Francisco. I knew in my gut there was a better way to gather this data, perform these analytics and improve financial management. There is an enormous amount of unrealized value in our commercial real estate and that value can be capitalized upon using technology. And that is precisely what we have created with Waypoint.
Bisnow: How does Waypoint work?
Vrkic: Waypoint is a smart asset management platform. We connect information in the real estate world that is often very siloed. The real estate industry has very unique asset classes and third-party service providers. One investment house could have 40 different asset classes. Each company uses their own system. Our platform integrates and cuts through all the noise with different accounting structures. Clients can look at their portfolio and look at it in a normalized way.
Operating performance and expense analytics are all in one place and all standardized. The platform goes one step further with market analytics that are standardized. A head of asset management can see how every building is performing and every market is performing, what underwriting assumptions were and how that building is doing in relation to the local market.
Bisnow: How can property analytics impact building operations?
Vrkic: Every building is its own business. It has its own customers, general manager and must perform efficiently. All commercial real estate owners want to hire the best athlete to run the building. But running a building is an extremely tedious, complex process and it is easy to say just hire the best person and let them deal with all of the issues. But if you take a step back, it’s impossible to have just the best person managing that building and it’s an inefficient use of that person's time and talent. It is so hard to understand asset performance and then improve upon performance since you couldn’t understand where you even started.
Just taking away all the time and effort understanding performance and calling and looking for stats and trying to understand how the building is performing. Taking away all the pain, we are decreasing what, in some ways, is low-value work for these individuals. Taking away a lot of the pain associated with their jobs by doing that with more time and the right areas to focus on building level and driving more value creation, whether it’s by ensuring tenants are satisfied, decreasing expenses based upon opportunities identified in portfolio, and a number of other different ways.
We believe there is $330B in untapped value in commercial real estate. We get that number by cutting operating expenses by only 5%. What we find for clients is a return on investment in dollars spent on the platform and dollars saved has been astronomical and surprising even to us.
Bisnow: Why isn't tech more commonplace in CRE?
Vrkic: Many say that real estate is slow to adopt technology, but my opinion on that has evolved over time. I think for a very long time, there were a lot of solutions that were looking for a question. I saw that a lot in my role in JLL with tech platforms pitching to me. The best way to say it is they were solutions looking for a question, but they weren’t really solving it from an actual pain point. That is changing really dramatically now.
There are going to be new companies that will emerge from a wave of tech and innovation that will have widespread adoption. Our adoption across commercial real estate is even surprising to us in how accepted we have become.
One of the reasons is we pride ourselves in solving problems that asset managers face on a daily basis. It’s not only Waypoint, but a couple other firms approached it in the same way of taking a problem that commercial real estate has and creating a platform that is efficient and drives more value to the user.
Bisnow: Where do you see the future of CRE tech?
Vrkic: Real estate has always been and will always continue to be a local business in some ways. You have to understand the market and you have to get access to get deals. You have to be able to ask questions quickly to win those deals. Those basic components of real estate will never change. The ability for real estate decision-makers to leverage platforms will help them do their jobs better. Real estate as a whole is starting to elevate in ways that use data and intelligence in more effective, smart ways. This data is much more available to decision-makers and will enable faster decision-making. That trend won’t stop anytime soon.
The investment management community is already leveraging data and intelligence to help support people’s decision-making and opportunities. I think that same paradigm is now moving into real estate, and our clients are happy to see better market insights being delivered in user-friendly manners.
I think this will become commonplace in just a few years. It’s not a competitive advantage, but a competitive disadvantage if you aren’t using the tools to enable real estate companies to do what they do best.