DXD Capital, which uses data technology to inform real estate investments, closed a $53 million funding round in November of last year — overselling its initial goal by $3 million.
To date, the company has 12 approved projects in that initial fund, said company executive vice president Martha Hargrove, adding more than half of the investors in the $53 million round that closed last fall are from New Mexico. Hargrove said she couldn't identify who any of the investors were.
The startup uses a data platform to help identify opportunities to develop storage facilities. The demand for storage will increase if current conditions continue, co-founder Drew Dolan told Albuquerque Business First.
“If the cost of living outpaces incomes, that means people have to rent or buy smaller places,” Dolan said. “Therefore, they’re going to need storage. And I think storage really becomes an extension of people’s lifestyle.”
DXD has created a set of proprietary tools. One is a listing monitor, which provides an inventory of properties for sale, which when combined with data, allows the company's underwriting team to analyze opportunities at scale, Hargrove said. The second piece of technology allows DXD to reverse engineer the site selection process and analyze self-storage investments at scale using a variety of characteristics, she said.
Using data, DXD can analyze income levels, single-family housing, multifamily developments and other characteristics of particular areas. The company is working to incorporate zoning data into the platform, which could tell users whether self-storage developments are allowed in certain areas.
“We really run more like a tech company,” Dolan said.
With that in mind, DXD is in the business of real estate development with construction underway in Phoenix, Arizona, and Las Vegas, Nevada, according to the company. Florida and the Northeast may also provide opportunities to build self-storage facilities.
DXD also plans to acquire existing self-storage facilities, which can be easier than new construction. As part of that plan, DXD recently brought on a vice president of acquisitions as well as a director of construction, Dolan said.
A total of 16 people work at DXD. Its leadership includes Dolan, CFO Amanda Giannini, CTO James de Gorter and principals Gary Delaney and Cory Sylvester.
DXD is already working on its next fund. Its structure has yet to be finalized, but Dolan said it will be for acquisitions and ground-up developments.
“Truly, behind us was a very unique advantage to use data and analytics at a level it had never been done before,” he said.
— Albuquerque Business First managing editor Chris Keller contributed to this story.
This article has been updated to clarify the nature of the proprietary tools that DXD has built.
