“The idea that property never innovates, never adopts and never embraces new tech is entirely false. You want to know the real reason the industry has this reputation? No one has developed technology that really inspires the real estate sector yet. Now that’s finally changing.”
Brandon Weber is everything you might expect of an American tech star in London. Fast-talking, razor-sharp and with an insatiable commitment to all things software – we are talking about a man sporting a pair of cloud computing branded socks.
But the 35-year-old chief executive of Hightower, a cloud-based leasing portfolio management company, has no intention of expanding his three-year-old business “facelessly” across the globe.
“We are not some bodiless vendor selling technology from somewhere in the US,” says Weber, sitting in his WeWork Soho offices following the Hightower UK launch last month.
Indeed, on top of a stellar local team headed by ex-Knight Frank tech sector surveyor Seb Abigail, New York-based Weber plans to spend a week a month in the UK “becoming part of the proptech community”.
He will be here to inject a dash of stateside start-up ambition into the market. To comment, influence, inform and educate. To dispel what he considers “major misconceptions” around the property industry’s attitudes towards tech adoption.
And, above all, he is here to make the UK real estate sector money. “We can offer a massive return on investment,” he says. “Massive. We say 12 to 15 times but actually that’s conservative. It’s closer to 17 times and you get an insanely fast payback. But we understand that we are new to the market. We understand that unfamiliarity will breed scepticism.”
Unfamiliarity? In some cases, yes. But also a very real fear that this is the sort of system that could replace agents with software.
“We truly aren’t going to do that,” says Weber. “And it’s our job now to eliminate all of this scepticism with knowledge.”
Knowledge is power
Before getting to the inner workings of the company itself, Weber’s own background is well worth delving into. Because if knowledge is power then he is in a prime position to serve both sides of the proptech union.
Born in Fairbanks, Alaska – “I am from the least – cosmopolitan, least-international place in the US” – Weber started his career as a product manager on the Excel team at Microsoft, where he played a pivotal role in the launch of Excel 2007. After a brief spell at Zillow (the Rightmove of the US), he took a career leap in 2008 and joined CBRE in Seattle to work as a tenant and then a landlord rep before leaving as a first vice-president.
“My parents thought I was totally insane,” he laughs. “Coming out of tech and into property in 2008? It was quite a crazy move.”
But one that has stood him in good stead: “I’m not just a tech guy,” he says earnestly. “I worked in property for nearly six years and when I was at CBRE I got pitched so many crappy technologies. So I understand what it is to be a broker and to be approached by time-wasters.”
And it was a mounting frustration around the amount of basic data and admin work he found himself doing as an agent, twinned with the aforementioned “crappy technologies”, that inspired Weber to branch out on his own to offer something different. He set up Hightower in 2013 out of a Seattle coffee shop and by May 2015 the business had attracted $22m (£18m) of investment. Now it is 110-people strong, operating in 1,500 cities across 12 countries.
All great news for Weber and his team. But what is it that has made the business model so successful and how does it deliver such huge ROIs?
Conversion rates
“We increase revenue by reducing the average time that properties are on the market by about five days,” he says. “Then we are increasing the deal conversion rates by 6-7%. And that’s just on the dollar savings.
“The two other buckets are productivity and risk. We can reduce the number of person-hours spent on admin by about 11% on the productivity side. And risk is a huge one. We can eliminate future risk.” Such as? Weber uses the example of ensuring a big tenant is given the right to expand an adjacent space as part of the deal. What happens if it gets missed and you accidentally lease the space to someone else? “Our system will prevent that space ever being accidentally leased. It sounds very technical and boring but breaking these encumbrances – say, one or two times a year – can cost six or seven figures in legal fees or a lost deal.
“Over an entire portfolio we can put hundreds of thousands of dollars or pounds back in property owners’ pockets. It means that we can sit down with a big industrial owner like we did this morning, look them in the eye and say, ‘Guys. For every quarter that goes by that you are not running a technology platform like this, this is how much it is costing you’.”
In terms of competitors, Hightower is going head to head with fellow leasing and asset management platform giant VTS. “We respect what they are doing,” says Weber. Very sporting. But is there room for both in the market? “I mean, it’s a $50tn asset class spread throughout the globe…” Again though, is there room for two? “You know, I think there is. Obviously we have aspirations to be the number-one provider in the space and we are doing everything we can, tactically and strategically, to achieve that. I think we have an opportunity to do that now and in the European context it comes down to building up trust.”
Suspicion
On this point, Weber is quick to concede that, returns aside, he understands the suspicion of Hightower in the market. Particularly in the UK and Europe, where there are nuanced systems that are unfamiliar to an US company: “We have town halls and what I call ‘Rude Q&As’ with agents, which I want to do here in the UK. We have probably done around 100 in the US now. It is where we explain what we do and where the agents fit in so they can then take the information back to their clients – whether that’s Grosvenor, Derwent, British Land – and explain it to them,” says Weber.
“But I can totally see why, despite all of this, some agents are still sceptical. And I want to make it very clear, right from the start, that they have every right to be. They have built up successful businesses, they are good at what they do. So we know we had damn well better deliver some ROI here if we are going to earn any trust. The hard questions we get from agents are: ‘Prove to me this is going to save me time’, ‘What’s your long game?’ ‘Are you going to try to replace agents with tech?’ – and I would stress again that we are absolutely not trying to do that. We are trying to reduce workload. And there is a lot of scar tissue to cut through to get people to feel comfortable with us. But here’s the thing. We aren’t going away any time soon.”
On the subject of moving a US company into a UK market, Weber is open about the challenges that creates. “We know full well there are a lot of nuances around how business is done, whether it’s here in the UK or in Amsterdam, Paris, Spain,” he says.
“That’s why we have such specially curated local teams. And we also recognise the need to partner with really smart local firms. That big industrial owner that I was with today? We talked about how we work together to make sure that their deep understanding of the market and all those nuances make it onto our platform. And we do that across the board, so all of that crucial local knowledge will be baked into the software.”
Ambition
If Weber’s choice of socks alone was not evidence enough of his commitment to all things software – and, for the record, it really should be – then it is his unwavering ambition to bring US tech into the UK. And encouraging others to do the same.
“We want the European market to see us as a technology company that is committed to being part of the property community, too,” he says. “The two have felt very disconnected for so long. But we can see how the property sector can leverage tech to move this industry forward. To make us more productive, reduce risk in business and make more money.
“As for Brexit? That has not put me off the UK market whatsoever. Not at all. And I will be taking that message back to the US. Leave it to me. I will happily let everyone across the Atlantic know that UK proptech is open for business. Because it is.”
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