PropTech unicorn is investing in Retail when others won’t. The decade long decline in Retail real estate has scrambled portfolios and left operators scratching their heads about how to recover value. Technology helped create the mess, and it must might help solve it.
by Dave McKenna, Editor CREB October 23, 2109
The rise of ecommerce has fundamentally disrupted the century-old retail business model and brought havoc to the retail commercial real estate market. With declining rents, and the demise of a number of big-name retailers, retail real estate has been the poor man of commercial real estate for a decade.
VTS, the fast-growing leasing and asset management start-up that has recently gained unicorn status, is betting on retail’s future with development and acquisition activity in the space.
Success in retail, and the real estate it lives in, demands a higher order of analysis than is normally seen in office or industrial. Sales per square foot, traffic counts, and average transaction size are just not things an office park needs to worry about.
In the volatile and chaotic world of retail, the demand for data and analytical tools to develop insights from it has always been significant. Now it is existential.
While others are shedding retail from their balanced real estate portfolios, VTS is doubling down on retail. The leading commercial platform announced its purpose-built retail solution back in 2016 and has been quietly expanding the platform since.
VTS has over a billion square feet of retail space on its platform today according to Nick Romito, CEO and Co-founder of VTS. “There’s a set of tools or features specific to those things retailers want and we are building those. The importance of the customer relationship has always existed for retail, whereas in Office people didn’t actually realize they had the same customers in other places because the east coast team didn’t talk to the west coast team,” said Ravio in a recent Propmoto interview.
VTS is expanding its retail portfolio with the acquisition of PropertyCapsule, the San Diego based provider of the leading automated marketing and prospecting software used by over half of the top 100 retail landlords in North America. VTS is not only acquiring an innovative technology used by the data intensive space, but it is also gaining access to a rich set of retail owners with very little overlap with its current roster.
With this move, VTS is signaling its confidence in the future of retail and is helping to bring the technologies together that will assist this sector in responding to the evolving threats it faces from online retailers.