The pandemic has introduced prolific changes to the workforce and how companies view the traditional office/employee structure. With many companies looking to restrategize their approaches to their commercial real estate needs, understanding their lease portfolios enables these companies to strategically plan for the future, armed with data and transparency. Occupier is a collaborative lease management platform that allows both brokers and commercial tenants to centralize lease administration, transactions, and accounting. ASC 842 is a new accounting standard that requires companies to disclose leased assets and all private companies are now required to adopt this standard in 2021. Occupier makes compliance seamless. The company, founded in 2018, already helps companies like Draft Kings, Outdoor Voices, Five Guys, AuntieAnnie’s, and Cinnabon manage their lease portfolios.
AlleyWatch caught up with Cofounder Matt Giffune to learn more about the state of commercial leasing during the pandemic, the company’s progress since we last spoke in 2019, future plans, latest round of funding, and much, more.
Who were your investors, and how much did you raise?
Our seed round funding of $5 million is led by Alate Partners and MetaProp, with participation from Second Century Ventures, Thomson Reuters, and commercial real estate industry leaders across the United States.
Tell us about the product or service that Occupier offers.
Occupier creates software for commercial tenants and their brokers to help with lease administration, transaction management, and lease accounting. Our knowledge of new lease accounting standards helps ensure that our businesses remain compliant. Our platform allows real estate teams to centralize their real estate strategy’s core components to provide them with data to make smarter, more informed decisions. Occupier creates better alignment between your teams so that everyone knows who needs to do what and when — ultimately leading to greater efficiency and business success.
What inspired the start of Occupier?
The power is in the hands of the tenant.
We believe that the success of a business relies on smart real estate decisions. More than ever, across all industries, your real estate decisions have greater implications for your company. Therefore, we believe that all commercial real estate decisions should happen online.
Current real estate software is not designed to meet the needs of modern real estate teams. Many CRE professionals find themselves falling back on spreadsheets and emails to do most of their business. Outdated IWMS platforms handle lease accounting and facilities management to satisfy back-office needs, but they do little to help business stakeholders and brokers. These tools don’t equip real estate teams with the right data to make smarter, better decisions, and we intend to change that.
My partner, Andrew, and I have seen the issue from both sides. We’ve spent over a decade in commercial brokerage at JLL, and we’ve watched the landlords transform from paper-based processes to software solutions at VTS. By taking control of their real estate strategy, occupiers can deliver better business results.
Real estate is typically the second-largest investment for businesses. But the tools many companies equip themselves with are outdated and unsophisticated, which makes them unprepared to make sound decisions. We started Occupier to enable companies to make more informed real estate decisions that align with key business initiatives, using insights and collaboration that don’t exist in antiquated systems to drive better business outcomes.
How is Occupier different?
Occupier is different from other lease management systems by providing an intuitive user interface that engages all stakeholders inside and outside the business. We can automate the entire lease life cycle’s decision-making process, including planning, site selection and negotiation, lease management, and compliance with lease accounting standards. By centralizing the entire lease workflow, we engage every business stakeholder that touches a company’s real estate data in a single pane of glass.
What market does Occupier target, and how big is it?
We focus on commercial real estate occupiers in the United States. These are companies that hold leases for office, retail, and industrial space across portfolios that range from five to hundreds of leases. Our target market is massive. Virtually every private and public company issuing financial statements can benefit from Occupier. Globally, our addressable market to 420,000 companies represents a $6.5 billion opportunity. It’s estimated that this market is less than 5% penetrated today, with the new regulations being a key driver for the remaining 95%.
The COVID-19 pandemic has significantly affected the real estate industry, and it’s more important than ever for business leaders to understand their real estate needs to navigate this changing market.
What’s your business model?
For tenants, our business model is an annual subscription based on the number of lease locations, with ongoing services provided. Tenant representation brokers also sign up for an annual subscription based on a per-seat model.
How has COVID-19 impacted the business?
For most businesses, real estate is typically the second-largest expense. COVID-19 showed that companies across the country need access to their leasing data quickly to understand their rights within real estate contracts and agreements. Our platform serves as a system of record and workflow for commercial real estate. It improves access to data and communication for employees working in different spaces to collaborate more efficiently and effectively.
Due to the pandemic, all businesses have been forced to rethink their real estate strategy; therefore, adopting modern, easy-to-use technology is more important than ever to ensure long-term success.
For most businesses, real estate is typically the second-largest expense. COVID-19 showed that companies across the country need access to their leasing data quickly to understand their rights within real estate contracts and agreements. Our platform serves as a system of record and workflow for commercial real estate. It improves access to data and communication for employees working in different spaces to collaborate more efficiently and effectively.
What was the funding process like?
While the pandemic presented uncertainty in the global financial markets, we demonstrated that we had built a product with immense value and experienced rapid customer growth and adoption. This enabled us to speak with investors looking to partner with a company with strong SaaS business fundamentals and a unique differentiation in the market. We spoke to hundreds of investors, but the investors with deep experience in the proptech space proved to understand the opportunity and the unique challenges facing commercial real estate.
What are the biggest challenges that you faced while raising capital?
The biggest challenges we faced were the sheer number of investors in the market and narrowing our search down to those that best understood our market opportunity and the unique problems that our users experience.
What factors about your business led your investors to write the check?
Growing new customer bookings 400% over the past year, especially during a pandemic, was definitely a factor. Our team includes industry veterans from commercial real estate and proptech, which demonstrated our ability to rapidly understand the industry dynamics and value drivers for our business. Finally, our addressable market’s size and depth present a massive opportunity to build a large business.
What are the milestones you plan to achieve in the next six months?
We’re planning to use the capital to scale our team, with immediate hires focused on product engineering, sales, and marketing. We’re also wanting to accelerate our product road map to solve more problems for an increasingly wide range of stakeholders on commercial real estate’s tenant and broker sides.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Keep talking to customers and solve their problems. If you are providing value, you can monetize your product through sales and raise capital if needed.
Where do you see the company going now over the near term?
We are going to double our headcount in the next 12 months to execute on our product road map, which includes IFRS and FASB lease accounting compliance, dynamic workflow tools for transaction management, and integrations with other systems to centralize more data to enable frictionless decisions.
What’s your favorite outdoor dining restaurant in NYC?
Not necessarily for dining, but my favorite outdoor spot is the sidewalk seating at the Ear Inn in Soho.
