It’s a familiar pitch — taking an industry that relies on outdated technology and rethinking it with modern, web-based tools.
The industry in this case is commercial real estate, and the startup trying to rethink the process is CREXi, whose name stands for commercial real estate exchange. To be clear, it’s far from the only online marketplace for these kinds of properties — in fact, CEO Michael DeGiorgio and Chief Product Officer Luke Morris both worked for real estate site Auction.com. DeGiorgio said that through that experience, they realized the deal-making process remains “antiquated and old-school in an odd sense.”
“You have to use 15 different kinds of platforms,” he added. “There’s a lot of emails, a lot of fax machines, a lot of flying to meet somebody.”
CREXi went live about three months ago, and the company says there are now nearly 200 properties listed on the site, adding up to almost $800 million in value. The Venice, Calif.-based startup has raised $4.3 million in funding from Lerer Hippeau Ventures, Freestyle Capital, TenOneTen Ventures, Founder Collective, Karlin Ventures, Leon Capital Group and others.
The site can be used by property owners, buyers and brokers. Morris said it aims to be “very, very broker friendly” — it’s already being used by brokerages including CBRE, Marcus & Millichap and Cushman & Wakefield. Besides listing and searching for properties, CREXi also allows users to view due diligence documents, schedule in-person tours, see analytics around their listings and make offers. DeGiorgio said he’s also planning to add integration with DocuSign so that you can sign the deal documents electronically.
But “the real secret sauce,” according to Morris, is the trading capability for “best and final offers.” For those of you (like me) who aren’t familiar with real estate lingo, it means that when several offers come in and the seller can’t decide between them, they can create a limited time window during which potential buyers are invited to compete against each other to offer more money and better deals.
“If I’m the buyer, I can come and I can see the price is posted, and by seeing where I need to be with the offer, it gives me confidence [to make a better one],” Morris said. “Through transparency, you can get great competitiveness. It’s only human nature … That’s what we saw in our previous career.”
While most CREXi properties are currently located in California, New York and Texas, DeGiorgio said it can be used by customers in any location.