Real estate tech company founded by Houstonian launches locally, looks for office space
A New York-based company that uses technology to optimize the commercial real estate leasing process is expanding into Houston — and it's a bit of a homecoming for the company's CEO.
SquareFoot, which was founded by Houston native Jonathan Wasserstrum in 2011, has launched in Houston following the closing of a $16 million series B funding round led by Chicago-based DRW VC. The company uses tech tools — like a space calculator and online listings to help users find the right office space quicker and easier than traditional methods.
The Bayou City's growth in small businesses and startups makes for a great market for SquareFoot.
"Houston, in addition to being a leading market for business, is a city in transition," Wasserstrum says. "We've witnessed a growing trend of smaller companies cropping up, with startups showing that they're here to stay. I want SquareFoot to be a major part of the city's growth and evolution."
The idea for a company, Wasserstrum says, came from a friend in Houston who was struggling to find office space for his small company. Years later, that problem's solution would be SquareFoot.
SquareFoot's Houston operations are up and running online, and the listings and resources will continue to grow. Wasserstrum says the team will also open a physical office in Houston, and the team is currently looking for its own office space in a "highly-desirable" area, Wasserstrum says.
"That will not only make it easier for us to show office spaces to prospective clients, but it also sends the message that we understand these clients better than anyone," he explains. "Where you choose to open your offices is part of the story you're shaping for candidates and clients."
In regards to Houston-based employees, Wasserstrum says he will start with tapping a few Houston real estate experts. He will take the business model that was successful in New York and adapt it for Houston
"It's not only the East and West Coasts where innovation is taking place," Wasserstrum says. "We want to help Houston continue to grow as a stellar place to launch and grow a company."
National expansion is Wasserstrum's big goal, he says, and after settling in Houston, he plans to next enter into Washington, D.C., and a few other major markets.
Wasserstrum explains what the Houston expansion means to him, how tech is changing real estate, and trends he's keeping an eye on.
IM: What does it mean to be expanding in your hometown?
Jonathan Wasserstrum: Houston is where I grew up. My whole life has been shaped by what I saw and learned in Houston. I moved away for college, and have built my career on the East Coast, but Houston will always be a big part of me. My parents still live there so I have good reasons to fly home and to come home again.
As I've built out my company, SquareFoot, since 2012 at our NYC headquarters, I have dreamed of being able to expand our services nationally. We have helped over 1,200 companies find and secure office spaces in major cities. As our executive team considered where to invest in and to expand to next, Houston emerged at the top of the list. We made this decision for professional growth reasons, but that choice has an emotional element for me as well.
Going forward, I should have additional good reasons to fly home and to see my parents more often than I have had the occasion to over recent years. Plus, we save on hotel costs!
IM: What makes Houston a great place to expand into?
JW: From an office space perspective, Houston is an under tapped market. There are countless companies looking for the services we provide, but nobody has yet figured out how to build a company to serve them specifically.
We acquire many of our clients through online search — people looking for office space are literally searching online for solutions. We've seen in recent months and years a surge in searches from Houston, which indicated to us that there was a gap that had developed there. We've long had a digital presence there, thanks to these searches, but now we're increasing our physical presence on the ground. We'll hire a broker and put an office there in the coming months.
IM: What sort of trends are you seeing in office real estate? Are these trends happening in Houston already?
JW: Over the past years, we've seen a sharp increase in demand for flexible solutions. Traditional coworking spaces have worked out for many companies, but it's not for everyone.
At the same time, the long-term leases that are usually required upon signing on for an office space of your own has largely kept growing companies out of the market; it has scared them off. We realized there had to be a middle option so we launched FLEX by SquareFoot last year. Now, for the first time, all companies can find the spaces they want with the terms they want.
We are excited to introduce FLEX to the Houston market and to show companies there that there's more lease flexibility and opportunity available than they might think. Change in commercial real estate happens slowly over a long period of time. Houston has the chance now to be a part of their changing wave.
IM: How is technology changing the industry?
JW: For many decades, commercial real estate operated the exact same way. And it intended to stay that way because nobody had reason to believe anything was broken or wrong. However, there were several inefficiencies that clients just had to deal with because that was the industry standard.
The first one was the lack of transparency of which office spaces were unoccupied or what they'd cost. Brokers would lock up this information and keep clients at a distance, unless they were willing to sign on to work with them. With SquareFoot's online listings platform, we have unlocked that information, have educated countless people, and have made for a more seamless and enjoyable process for our clients as partners in their searches.
The other technological breakthrough we've made is in our mobile app. Still, in 2020, too many clients are taking tours of these offices with pen and paper and occasionally snapping a photo or video to send back to their stakeholders. Our app solved those issues once and for all, enabling better communication back and forth and a better user experience for all. Regardless of which team member goes on the office tour with our broker, everyone is clued in and on the same page.
We want everyone on the greater team to buy into the vision, and to recognize the potential, not just one representative who happened to be on the office tour one afternoon.