A D.C.-based commercial real estate data startup that tracks development projects has expanded to four cities since its March launch and has several more on the horizon, but it has yet to raise any outside money.
Recity, founded by entrepreneur and real estate investor Guggan Datta, in September had been looking to raise $1.5M to fund its expansion. Datta, who has self-funded the business up to this point, saw revenues picking up and ultimately decided not to raise money.
“I would fully expect, with our current model, moving forward revenue is going to cover expansions,” Datta said. “Previous to the first three quarters of last year, we were burning cash growing to get the platform built. Now we’re breaking even and making money. The focus is to keep making more money and grow the business organically, at least until a no-brainer offer comes along.”
Datta, who previously co-founded Arlington-based Ignited Discovery and owns retail property on D.C.’s H Street corridor, declined to say how much he has invested in the company himself, only saying that it is “way more than I wanted to put in.”
But Recity now has 50 companies signed up on its platform, with at least half of those in the last two quarters, Datta said. Its customers pay up to $15K annually to subscribe to the service, though that can vary depending on how many employees they have using it and how many markets they want access to. After launching in D.C., Recity expanded to Boston, Chicago and Seattle and most recently launched in New York City.
“Since launching in Chicago and New York, our ability to get into enough markets where we can sell national deals has teed up our success,” Datta said. “There is a lot of money to be made in regional markets, but national deals I think are going to be a real key to growth.”
In the near term, Recity plans to expand within its current markets to cover entire metropolitan areas. Datta then hopes to launch in San Francisco, Los Angeles and Miami next, followed by eventual expansions to Denver, Nashville, Charlotte and other similar markets. Recity would not be the first D.C.-based commercial real estate data company to expand across the country, but Datta said he is no Andy Florance.
“CoStar will tell you about rent comps and information about existing buildings,” Datta said. “We’re not trying to reinvent the wheel. Instead, we give you a complete look at everything that will happen in the future.”
Recity tracks commercial real estate projects starting with the point a developer acquires land, updating its database with each new bit of information that comes out. Its team of nine researchers combs through zoning and permitting documents, culls news releases and calls developers to track projects at every stage until they are delivered.
The platform, available on a computer or mobile device, shows each development on a map, with colors indicating the stage of the project. For each project, it displays renderings, building type, size, developer, architect, projected cost, acquisition date, permit status, expected delivery and other relevant information.
In addition to looking at individual projects, users can analyze development data for entire submarkets. Using pre-set submarkets or creating customized ones using dotted lines, users can view metrics such as the number of active projects in a geographic area, the total square footage by property type and the ratio of commercial to residential space.
The platform can be useful for developers and investors looking to gain intel on a neighborhood before making a deal, Datta said, or for brokers helping clients get a picture of the development happening in an area.
CBRE Executive Vice President Mike Muldowney, a multifamily investment sales broker, started using Recity with a personal membership as soon as it launched and later convinced his firm to buy a subscription for 10 users. He said he often uses the mobile app to show out-of-town investors the development activity happening in a neighborhood of interest.
“You could pull it up whether you’re on a property tour or a presentation and talk about an intersection and what’s going on there,” Muldowney said. “The data seems to be detailed enough and updated frequently enough to make it usable.”
The only similar service Muldowney has used to see development activity is Dodge Data & Analytics, but he said its reports are not as user friendly. He expects Recity will be successful in its expansion to new markets.
Foulger-Pratt Acquisitions Associate Nick Beeson said he uses Recity when analyzing potential development opportunities.
“We can march down a certain corridor and see where there’s activity, see where there’s empty pockets,” Beeson said. “It’s also a way of visualizing a timeline of the pipeline so you can see the queue of delivery. That’s very helpful because timing is everything.”
Beeson said he has not used another platform that tracks development data like Recity. He also compared the startup to CoStar, the $12B company that gives information on commercial properties.
“CoStar can provide a lot of leasing context for multifamily and retail and office leasing, but CoStar does not have a platform as useful as Recity for tracking a development pipeline,” Beeson said. “It fills in the holes for developers that CoStar leaves.”
Foulger-Pratt recently opened a Southern California office, with plans to acquire properties in Los Angeles and San Diego, and Beeson said he hopes Recity expands to that region.
“Given that we are kind of the new guys in town in L.A. and San Diego, I would very much welcome Recity’s implementation out there because it would certainly help me as someone who’s trying to learn those markets,” Beeson said.