Covid-19 has had an immediate, global impact on a number of industries, few more so than commercial real estate.
However, as the pandemic has forced countless companies to re-think how they find and lease office space, Austin startup Elevate Growth Partners, a new tenant-focused brokerage and tech company, sees opportunity for growth.
In a recent interview, Elevate co-founder Chris Skyles showed Inno a demo of his startup's new software, Elevate IQ, and shared details on why he thinks Elevate could become one of the biggest real estate tech stories in Austin since HomeAway.
Skyles is confident Elevate has a big opportunity for a couple reasons, despite a global pandemic. First, the startup's C-suite is built out of mostly experienced tech and real estate entrepreneurs who are also invested in Elevate. And, secondly, the startup's new software offering has the potential to be licensed out by major firms -- if Elevate doesn't get acquired first.
Skyles founded SkylesBayne commercial real estate in Austin, becoming one of the leading firms for early- and growth-stage tech startups hunting for space. In 2018, he teamed up with former Rockfish founder and YouEarnedIt executive chairman Kenny Tomlin, who bought out other SkylesBayne partners, allowing the co-founders to launch a new venture.
Soon thereafter, Mike Ward, former CEO of World First, joined the team as chief operating officer. And Peter Freeland, who founded Unbundled Capital and co-founded BuildGroup, joined the team as an investor and board member. The company has so far raised $2 million, which Skyles said is all it needs at this point.
"It’s basically all Elevate clients who saw what we built and said, ‘screw this I want to get on board,’ wrote a big check into the company and then jumped into the C-suite and took an operational role," he said.
Earlier this summer, Elevate launched its software product, Elevate IQ. Skyles said the company will begin to license it out near the end of 2020 or start of 2021, with a focus on foundation deals with national-scale firms.
He said Elevate presents a major step forward for the industry. Typically, commercial real estate searches involve brokers emailing PDFs and spreadsheets full of options. They often include a coversheet with a photo of the office building and a complicated list of pricing and square footage. But it usually takes weeks of Q&A between prospective tenants and brokers before a deal reaches its final stages.
“It’s just a freakin’ disaster,” he said. “At this point the client is totally lost and confused.”
Elevate IQ is cloud-based and has a dashboard where clients and brokers can interact, without anyone having to download and organize documents. The software presents properties and simplifies the leasing data so tenants can quickly see lease costs and terms. It also pulls in high-quality images by automatically notifying landlords that there are interested parties and requesting images, which are often spread across various websites and flyers. The platform also often includes virtual tours.
That interactivity helped Elevate recently land one of its first-digital only clients -- an undisclosed California-based company currently exploring an IPO and moving to Austin.
Elevate has similarly helped companies including Hippo and Buc-ee's find office space with comparative ease and no in-person visits, Skyles said. And it also counts Walmart Technology among its clients.
This type of software automation-meets-traditional brokerage has the potential to change in the industry, he said.
“The future of the industry is going to be connecting the best human talent with really good automation software that allows the best brokers to do 2-3-4 times more deals on an annual basis," he said. "It will just aggregate most of the deal flow through a few of the best, highest-producing brokers. And a lot of the brokers who are just hanging around looking for low-hanging fruit will probably have to go find a new industry to work in.”
Most recently, the Austin Business Journal reported that its real estate sources say Elevate is leading TikTok's search for office space in Austin, in what could be one of the larger and most talked about deals in the city since Tesla announced its plant would be built here. Elevate has declined to comment about any involvement with TikTok's search.
But Skyles is up-front about what he sees as Elevate's potential, saying the startup could become an acquisition target for industry leaders or land large enough licensing deals for its software that it becomes an industry standard going forward.
While initially focused on Austin, one of the hottest markets in the nation, Elevate plans to first expand to Dallas, then other cities in Texas, before launching in hot tech hubs like Raleigh and Nashville.
“I think we’ve got a tiger by the tail here. And I see this sort of sleeping giant emerging with these big hitters coming together here.”
