A self-proclaimed “hacker,” Alex Markson spent over a decade running a Baltimore-based tech innovation consultancy that built products and start-ups in several different verticals. In 2005, a major shopping mall landlord asked them for help bringing a new retail portfolio to market after acquiring nearly 400 shopping centers through M&A. In a precursor of things to come, Markson’s team digitized all of the landlord’s marketing materials including site plans, tenant lists and photographs and built a touch screen kiosk and corporate website that worked together to display information to prospective tenants at ICSC. It wasn’t long before Markson was working with other landlords with similar requirements. “Commercial real estate was an open pasture,” said Markson. “There was very little technology present.”
Markson exited the consultancy he founded and returned to Southern California, where he was born, setting up shop in San Diego. Using the knowledge he gained building online property platforms, he launched Property Capsule in March of 2014. The company was profitable from the start, fueled by Markson’s passion for the retail real estate niche. “For me, the whole art and science of retail is particularly cool. The industry has basically created baseball cards of all the properties — population and income, tenant lists, site plans, competitors. There are a lot of stats and science to it, but it’s driven by a lot of really smart people — usually without a lot of technology — so there’s also an art to it.”
In retail, unlike most other real estate verticals, a repeat tenant base creates unique opportunities for real estate professionals, according to Markson. “A tenant will be receptive to new sites and retail locations if the site fits their criteria. That’s not how office works. That’s not how industrial works. But if you go talk to Subway or TJ Maxx at the right time of year and you show them ten new sites that are all bang-up fits, then they’re like, ‘cool we’ve got ten new locations.’ You don’t have that in other asset classes. You rarely see a tenant, broker and landlord all working together the way you do in retail.”
Property Capsule centralizes, automates and publishes property information in an interactive format, allowing you to access what you need, wherever you are, from any device. All of the property details, such as overviews, agent contacts, plans, availabilities, photography, maps and demographics are kept in a central repository. Property information can be updated on a desktop or mobile device. Tools include interactive maps and plans that can be displayed on an iPad, smartphone, laptop or trade show kiosk. Traditional flyers and other printed materials can be completely automated as well.
According to Markson, the internet is forcing the real estate industry to shift from an access-based model to a service model, and with that comes uncertainty. But he doesn’t believe that technology will be replacing most brokers anytime soon. “Look at the stock market. You used to hold shares of a company for eight years and now it’s eight seconds. That’s because of technology. People thought that direct access meant brokers would be useless. But there are more stock brokers now than in the history of humanity — and an exponentially higher number of transactions.”
Technology provides a dramatic increase in transparency – this forces brokers to provide increased value through service rather than simply access.
On the other hand, Markson believes that some changing of the guard may be overdue. “Some brokers provide nothing but access. Those people should be fearful when they provide absolutely no value through intuition, knowledge or relationships. If all you provide is a login to some system that somebody else doesn’t have, or access to something through an old boys network, then you won’t make it,” he said unequivocally.
“Sure, it might be threatening to have more transparency,” added Markson. “But the reality is that there will be more transactions that happen so much more quickly with technology. Think of how many more deals you can do when you can offer the Internet version of ‘I know a guy.’ It becomes, ‘I have a network of people that I’ve built and we transmit information about deal opportunities in real time, 24 x 7 x 365.’ That’s a pretty awesome version of ‘I know a guy.’ That’s where everything is moving in CREtech. The broker is dead, long live the broker!”
Property Capsule counts nearly all of the big institutional retail landlords as clients, several prestigious brokerages, in addition to many other companies of various sizes — even guys with three or four properties. The feature-rich platform continues to grow based on user feedback. According to Markson, if they receive requests for a new feature from more than two users, they’ll often add it to the platform. “We feel like the industry is building Property Capsule through us, not that we are building it for them,” said Markson.
Today, the fast-growing but close-knit Property Capsule team works in San Diego’s historic Pioneer Warehouse Lofts located in the trendy Gas Lamp District. From their penthouse office, they enjoy views of Petco Park, home of MLB’s Padres, and San Diego Bay. “San Francisco or New York are the obvious locations for a CREtech startup. But we are not a ‘me too’ company. We are not a cliche start-up. We keep our collective mouth shut and our head down. I started out as a hacker and I’m still a scrappy hacker.”