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Clelia Warburg from Warburg Realty, Brian Murphy from Breather and Peter Zinkovetsky from InstaClosing (iStock)
It has been a year of extreme ups and downs in the proptech industry.
As startups offering catering services to digital transactions have grown, flexible coworking and office spaces have seen a sharp decline in activity, as Business Insider reports.
Several companies in the sector laid off large numbers of employees and looked for financial lifelines to survive. Others have closed their offices and ceased operations.
“Breather, in his current form as an operator, doesn’t make sense and, to be frank, I’m not sure it ever made sense,” CEO Bryan Murphy said in mid-December. . His flexible office company recently announced plans to close 400 offices and lay off most of its employees.
But some industry players see the pandemic as a turning point.
“I really think at the macro level, what’s happening with COVID right now is going to serve with proptech the same way the financial crisis did with fintech,” Clelia Warburg Peters, venture partner at Bain Capital and president of Warburg Realty, says BI.
Dramatic changes in the way we live and work have created a need for companies that facilitate remote transactions. Last month, real estate attorney Peter Zinkovetsky launched InstaClosing, a startup that virtually handles real estate closings. Other home sales companies, including Notarize – which offers virtual notarizations – have already had success.
“Any business that helps real estate companies operate digitally and remotely are typically the big winners over the past 10+ months,” Camber Creek’s Jake Fingert told BI.
Those with stakes in the office market have had a tougher race.
WeWork’s botched IPO efforts last year have drawn attention to the pitfalls of the master lease model, which came under pressure again in 2020 as many flex-office and co-working companies are trying to switch to property management agreements.
Such pressures will persist as employers attempt to get workers back to their desks – not easy without a widely available vaccine. But the agility of flexible office space could help some businesses save money while avoiding long-term commitments with business owners.
“Flex office was a loser in the first part of this year, and no one would argue the opposite,” Zach Aarons of MetaProp told BI. “They are losers, but intended winners, those who can survive.” [Business Insider] – Sylvia Varnham O’Regan
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