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Industrious Raises $80M in Funding Co-Led by Fifth Wall, Riverwood

Rapidly growing Brooklyn-based flexible workspace provider Industrious, which has attracted members from Hyatt, Instacart, Chipotle, Fullscreen, Mashable and Pivotal, is about to get even bigger.

After tripling the number of its locations in the U.S. to 35 over the past three years, Industrious has completed its latest fundraising round and pulled in $80 million in Series C funding co-led by Los Angeles-based Fifth Wall Ventures and Riverwood Capital, according to an Industrious news release today.

The company has now raised a total of $142 million since its founding in 2013, according to a spokeswoman. It plans to further its expansion by adding about 30 more locations this year. Also Industrious is projecting its revenue growth will triple this year, according to Jamie Hodari, a co-founder and the CEO of Industrious. He also said that in 2018, the company plans to launch an app that will help connect tenants to events. He declined to go into further detail about the product.

“Our network is growing very quickly and that is a capital intensive proposition,” Hodari told Commercial Observer. “We have to be able to serve our customers where they are, wherever that is across the country.”

img 0036 Industrious Raises $80M in Funding Co Led by Fifth Wall, Riverwood
Industrious plans to open many new locations around the country this year. Photo: Industrious

Other investors in the funding round include Alrai Capital, Outlook Ventures, Rabina Properties, Schechter Private Capital and Wells Fargo Strategic Capital, the release indicates.  

Fifth Wall, a venture capital firm that invests in burgeoning real estate companies, is backed by major property owners such as Hines, mall-operator Macerich, Prologis and Rudin Management Company. (Industrious is not the first coworking provider that Fifth Wall has invested in, but it is the first that has been publicly announced.) It has already invested in VTS, Appear Here, WiredScore and Enertiv, as CO reported first in January.

The company chose to invest in Industrious because of its ability to attract Fortune 500 companies to its model.

Industrious does not create flashy spaces designed with startups in mind, but implements sophisticated designs with actual offices—and a handful of coworking desks—at its locations.

“It’s an elegant, simple, refined aesthetic that attracts large companies,” said Brendan Wallace, Fifth Wall’s co-founder and managing partner.

Wallace added that Fifth Wall also selected Industrious because he believes the office space provider partners more with landlords than do its competitors, based on the structure of the lease agreements it signs.

The Fifth Wall co-founder declined to elaborate, but said Industrious is different than say a WeWork, which signs a lease and then fills its spaces with members whose collective fees work out to much more than the price of the original lease. In WeWork’s case, the coworking giant receives more upside than the landlord does for the space. (A spokesman for WeWork declined to comment.)

“I think that landlords have grown increasingly cautious to coworking players, including WeWork,” Wallace said. “What [Fifth Wall’s investors] were looking for was a coworking partner to deploy across their national footprint.”

Source: commercial

Fifth Wall, Rudin Raise $4.3M in Seed Funding for PropTech Company

Fifth Wall Ventures led a $4.25 million seed funding round for Enertiv, a property tech company that creates hardware and software to track the performance and energy usage of building systems, Commercial Observer has learned.

Rudin Ventures, the Rudin family’s investing arm, also joined the funding round as well as New York Angels, Cerium Technology and MetaProp NYC. Enertiv, a seven-year-old company with 15 employees, is currently using its technology in 200 buildings across 30 states. The funding will help Enertiv expand its products and hire up to 10 more employees, such as product engineers and data scientists, within the year.

“We know we have a great team, we know we are solving a problem that often gets overlooked, we know we are really far ahead in the [industry], it’s nice that that was finally acknowledged by some key players like Rudin and Fifth Wall,” Connell McGill, a co-founder of Enertiv, told CO.

Enertiv builds meters, “Internet of things” sensors and software applications that allow it to capture data from building systems, such as energy usage from boilers, elevators, pumps, chillers and exhaust fans. This gives landlords knowledge about the intricate workings of their structures.

Furthermore, through Enertiv’s system one can digitally check on any specific equipment in their property, allowing building managers to quickly identify and repair problems, and even predict equipment failures ahead of time. Also if an equipment breakdowns the system will alert the building manager automatically. Ultimately, this technology can help owners reduce energy consumption and save money, McGill said. The company’s technology can also integrate with energy meters built by other companies.

Fifth Wall’s partners, which include major real estate owners and developers like Hines, Lennar, Macerich, and Rudin Management Company, invested in Enertiv because they are concerned about “energy consumption and energy savings,” said Adam Demuyakor, a senior associate at Fifth Wall.

“In older office buildings, there is no management system or brain there, so it’s a ‘dumber building,’” Demuyakor said. “Plugging Enertiv’s smart meter in, will turn them into ‘smart buildings.’ The potential for Enertiv is quite large.”

McGill declined to share the total amount of funding the company had to date.

Enertiv’s products have helped property owners reduce total operating expenses on average by about five percent, according to McGill. Another significant benefit for landlords is having buildings that operate smoothly.

“This is what helps differentiate one real estate company’s services and the experiences that they provide from others,” McGill said. “If they are able to preempt some of these issues—it’s too hot in this space, it’s too cold, there are odors, there is no hot water or the elevator is not working—if they are able to get ahead with our data that’s potentially 50 to 100 tenant complaints that aren’t coming in.”

Rudin was interested in Enertiv because it had been working on a similar concept. The landlord created tech company Prescriptive Data, which has a product called Nantum that collects building data like occupancy and electricity usage to help maintain optimal indoor temperatures and efficient energy use. Rudin executives hope there comes a time when they can find ways to partner Enertiv tech and Nantum.

“We were really impressed by [them] and think they have built and grown a really great company with a great product,” said Michael Rudin, a senior vice president of Rudin Management. “There are obviously a lot of buildings that are the right fit for what Enertiv is doing and that’s why we found it to be attractive. And maybe there is a way down the road that the technical teams [of Nantum and Enertiv] will collaborate.”

Source: commercial

NYCHA Embraces Tech for Its Aging Buildings

The cash-strapped New York City Housing Authority is taking a giant leap into the 21st century.

NYCHA and the Fund for Public Housing, a nonprofit created to fundraise for the agency and forge public-private partnerships, hosted an event Tuesday night where real estate tech startups pitched ways to improve the agency’s aging, poorly maintained buildings.

The tech event comes as the agency faces hard times, with the potential of losing millions in federal funding. As a result, NYCHA has been looking for ways to fix up its buildings and reduce energy costs without getting hit with a hefty tab.

The authority stands to lose $370 million in funding under President Donald Trump, thanks to a proposed $7.4 billion budget cut to the federal Department of Housing and Urban Development. NYCHA is the city’s largest landlord and the country’s largest public housing authority, housing 400,000 low-income New Yorkers.

“In a city where more than half of New Yorkers pay more than 50 percent of their income towards rent, let alone our residents that are struggling to pay their rent already, these cuts are devastating,” NYCHA Chairwoman Shola Olatoye told Commercial Observer.

Even in the face of a bleak financial future, Olatoye is trying to push forward with NYCHA’s controversial NextGen plan, which calls for upgrading the authority’s 2,500 existing buildings and developing new residential projects to generate extra revenue. The agency needs $17 billion to bring its buildings and infrastructure up to modern standards. One pillar of the plan involves using technology to “improve customer service and increase efficiency,” and another calls for developing a sustainability agenda and reducing the agency’s carbon footprint. The startup competition aims to address both those goals.

“To be in the center of innovation and problem solving, to actually connect with those thinkers is really important to help us work smarter, be more efficient with our resources and ultimately improve the quality of life for our residents,” Olatoye said. “In times of crises, you have to find a way to leverage resources for the long-term and this gives us a great platform to see what might be possible.”

Ten companies gave brief presentations on how their technology could aid NYCHA leadership, maintenance workers and tenants. At the end of June, public housing officials will choose three proposals to pilot in a handful of NYCHA buildings from July to October.

Several firms served up promising proposals. One company, hOM, provides on-demand amenities to roughly two dozen large apartment buildings in Manhattan and Brooklyn, and it wants to do the same for NYCHA. The service offers weekly group fitness classes (yoga, core work, meditation) in whatever space a landlord has available, whether it’s a conference room, basement, or courtyard, and it organizes a monthly social calendar with activities for tenants. The company also helps tenants organize their own events, like communal dinners or bike rides. Co-founder Ryan Freed proposed offering two classes at one NYCHA property to gauge residents’ interest in the service.

Two startups presented relatively simple solutions to improve the wasteful heating and cooling systems in many of the agency’s outdated buildings. Radiator Labs pitched a cover that shrouds radiators, trapping steam inside the pipes and preventing the steam from condensing till cool air can be added and then released to the room. The device has a fan that turns on and circulates hot air when the room drops below a set temperature. Then it shuts off once the room is warm enough. It helps landlords stabilize the temperature in apartments and save on fuel costs.

A second firm, ThinkEco, tackled the cooling side of things. Its seven-year-old invention, the Modlet, is essentially a Wi-Fi-connected power outlet that tenants can control with a smartphone app or a web portal. It allows residents to turn their air conditioners on and off remotely and schedule specific times for the A/C to run. ThinkEco also built a rewards platform that offers incentives for users to save energy.

A handful of startups floated money-saving solutions that involved installing sensors in NYCHA buildings to track energy usage. A company called Carbon Lighthouse claimed it could help landlords slash their energy use by up to 30 percent by collecting data on electricity, gas and steam heat from sensors and upgrading inefficient mechanical systems. Another one, PanSofik, proposed putting in sensors that detect temperature, humidity, light and human presence and beam that data back to secure servers.

“You could put a sensor in a hard-to-reach place under the roof, and if the roof started leaking, [the sensor system] would send a text or email to the building management team,” said Tony Bowden, a partner in PanSofik.

The final presenter, Connell McGill of Enertiv, said his company could offer not only sensors but custom-built meters that track HVAC and utilities and can predict when certain mechanical systems, like fan belts, will fail.

When asked how his pilot would work for NYCHA, he replied, “I noticed that only a sixth of your non-residential tenants are direct metered by the utility. You’re leaving about $20 million on the table every year. We could help you recover that immediately.”


Source: commercial