SMU grad Kyle Waldrep surveyed the state of commercial leasing and decided to fix it rather than join it.
When you met Kyle Waldrep its clear you’re dealing with a smart guy. He graduated from SMU in 2016 with two degrees; one in Political Science and another in Corporate Communications. Like many new grads, once the square hat and ’16 tassels were lovingly stored away, he began to explore his career options that summer. An entry level job as a commercial leasing agent with a big name broker happened to be one of them. And as you would expect from someone with two BA’s from SMU, Kyle started doing his homework on the job, the industry, and (significantly), the tech it used.
The more Waldrep studied the industry, the more he realized that the opportunity was not to join the leasing business, but to launch a proptech start-up to help improve it. The company he founded is Dallas-based Dottid, a transaction automation platform focused on the leasing cycle. Now, with several years of primary use-case research in hand and an all-star Advisory Board that would be the envy of any Silicon Valley start-up, Dottid has closed a $4 million seed round and is poised to make a big splash in the proptech space.
What Waldrep discovered in his interviews is just one example of the head scratching disconnects between value and tech in commercial real estate. If your car is in the shop after a fender bender you may well receive a daily update from your mechanic on the progress of the work via a system like Carwise. I did a quick search on their website and discovered that there are 216 mechanics within 20 miles of my house that use the “mechtech” platform to text me photos of the work done and even allow me to message the shop with questions.
But if I’m going to sign a multi million-dollar lease committing my company to years of financial obligation I had better have access to a fax machine. This is what makes the current state of proptech so exciting… the most valuable assets in the world are routinely managed by technology from the days of Reagan and Gorbachev.
A recent study by the University of Oxford examined real estate transaction practices around the world and found universal inefficiency affecting transaction time and leaking value out of the economy. Oxford, working with CBRE, HMLR, and several major UK law firms, created a common-process model consisting of 150 individual actions within a typical commercial real estate transaction. The research identified seven common friction points within the process that contribute to lost time and value. Unsurprisingly, five of the seven friction points Oxford documented are related to the absence of automation and inconsistent data standards.
The study examined eight emerging proptech technologies that would improve real estate transactions; from blockchain to drones. Again, it should be no surprise that adoption has been slow. The authors of the study point out “the real estate industry is slow at adopting these new technologies, and it is arguable that the most significant transformation yet to take place is the normalisation of technologies which automate current manual procedures.”1 Said another way…the global proptech opportunity is just beginning.
Waldrep’s own research confirmed the Oxford conclusion, “There are so many different people, entering the process at different times, with very different roles and using different systems. I had to believe it could made easier for everyone,” said Waldrep. This insight led Waldrep to start Dottid. “I passed on the leasing agent job, cashed in my savings, and began to read my way through the industry,” recalls Waldrep. Over the next 18 months he conducted over 250 end-user interviews across the industry, talking to leasing agents, owners, institutional investors, and property managers. Developing a detailed process map of his own, Waldrep documented all the friction points he could in order to zero in on where he felt automation could improve performance best.
The global proptech opportunity is just beginning…
The deep research Waldrep conducted over almost two years yielded at least two critical observations. First, compressing cycle time from tenant inquiry to move-in with some good automation would accelerate time-to-revenue for the asset side of the transaction. Second, the tenant-searcher experience is universally horrible. “It is really amazing in this day and age that the end-payer (tenant) is basically left in the dark most of the time. There is almost no consumer experience at all for the tenant in the leasing process,” he says. What Waldrep’s research proved was a highly manual, document heavy leasing process. The communication tempo is also very intense. And yet, email and phone calls are the most common tools used in closing a lease. Oh, and don’t forget the fax machine.
The Dottid solution is designed to speed up revenue by shortening the interval between the initial tenant inquiry to the date they move in. Optimization is the focus of the Dottid solution. The ideas is to make the process transparent to all the participants, bringing them all together around the same virtual table. That table includes all the documents in a single location, routine updates and collaboration through the platform, as well as real-time metrics on lease execution. “This isn’t about kicking anyone out of the process. It is about giving everyone a seat at the table,” said Waldrep.
The idea is that a single platform for collaboration will increase the accountability on the asset side of the transaction. But, it will also allow the customer-side, the paying tenant, to gain visibility and awareness throughout a process that might otherwise be fairly infrequent and foreign. Waldrep recalls interviewing a dentist in Austin looking for medical space. “I know what LOI stands for, but what does it mean for me? Do I need to be involved or not?” the dentist complained.
One might argue that the dentist needed a better broker not an app. But these are not mutually exclusive. Good brokers work closely with their tenant clients to shepherd them through the transaction. The Dottid solution gives those good brokers a more powerful means to deliver their services by automating the routine and liberating them to focus on the complex.
It seems reasonable that Dallas should give rise to a strong proptech sector. Dallas is one of the leading commercial real estate markets in the country. According to a recent JLL report, DFW has had an amazing 10-year surge in commercial real estate. In 2019 the metroplex had $20 billion in development underway. The Dallas market saw 4.6 million square feet of absorption with another 5.3 million square feet in development. CBRE places Dallas as #7 in the entire country in co-working footprint.
In the course of hundreds of discovery meetings, Waldrep was able to connect with some big thinkers in commercial real estate, and they started to take notice of this young man with a simple idea; speed-up time to revenue by automating common tasks in a single system. “I can’t tell you how many times I was laughed at because I was a fresh college graduate with no real estate experience and little tech background,” Waldrep said. But he listened, and learned, and persisted through several years of discovery and honing of the Dottid concept. His investment thesis began to get attention.
Like many start-ups, Dottid stayed alive through 2017 and 2018 with the help of family and friends and few small loans. Along the way he got the attention of some very big names in commercial real estate — notably in Dallas.
Despite the lonely beginnings in 2017 that amused some early contacts, no one is laughing now. With a fresh seed round of $3.85 million, Dottid could be considered something of a cause celebre among Dallas CRE elite. In fact, seven of the eight Advisory Board members Dallas heavy weights, and they include some very big names indeed. Members of the Dottid Advisory Board include Don Goldstein, former CIO of CRBE. Catherine Rodewald, the past CEO of Prudential Asset Resources. Also on the dream team are two Dallas titans of real estate investing, David Ridley and David Farmer. Ridley and Farmer are the founder and former COO of Invesco respectively. Other Dallas thought leaders on the Dottid advisory team include Laurie Dotter, real estate lawyer Ashley Martzen, and Dallas VC Johnathan Crowder.
According to Waldrep, “Dallas is ripe for a leading proptech start-up to get behind — one that can have a national and global impact.” With a full war chest, a solid-gold brain trust, and years of research behind it, Dottid could be that break-out proptech story as big as Dallas.
- Saull, Andrew and Baum, Andrew. “The Future of Real Estate Transactions, Report Summary” University of Oxford, Said Business School. March 2019. p2. https://www.sbs.ox.ac.uk/sites/default/files/2019-03/FoRET-ReportSummary_0.pdf
May 22, 2020: An earlier version incorrectly identified Don Goldstein as the former CIO of CREB. Mr. Goldstein was the former CIO of CBRE.
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