Property owners — particularly homeowners — have long relied on the advice of brokers and investors when selling their assets. CityBldr, a new tool that uses machine learning and AI to predict future land usage and value, is helping property owners get the most out of their sales, attempting to change the way developers, brokers and sellers interact.
The Registry spoke with Bryan Copley, CityBldr’s CEO, on how the platform is empowering property owners and changing the market.
Can you tell me a little bit about yourself and your role at CityBldr? How and when did you come up with the concept for the platform?
I’ve worked for the past two decades in tech, real estate, finance, sales and entrepreneurship. Devyn Cairns and I co-founded CityBldr two and a half years ago after working together on two previous companies, Rebls (which stands for “real estate buyers listing service”) and Everyhome (a platform that put a digital for sale sign on every home in the country).
With CityBldr, we decided to create a real estate arbitrage index that identified underutilized properties after discovering that builders and developers looking for development sites were the power users of Everyhome.
As CEO at the company, I focus on developing vision and strategy, raising money from the right investors on the right terms, hiring the best talent and supporting our hardworking leadership team.
Where does CityBldr operate geographically and what types of services does it seek to provide to sellers, brokers and investors?
We operate in Seattle and Los Angeles (although our platform works in over a dozen metros, adding two a month). We’ll expand to our third market when Amazon’s second headquarters — “HQ2” — is announced.
We help sellers connect with builders and developers, connect owners to brokers (over $500 million in 2018) and help investors find their next development opportunity.
How is the CityBldr platform transforming the commercial real estate industry through its use of machine building and artificial intelligence?
We use machine learning and AI to determine the best use of land. This involves using massive amounts of data to predict the future of land use and measuring the outcomes of different types of land use. We think this data has the potential to change how cities are planned and developed and will change the way buyers and sellers of underutilized property connect and transact.
We’re also building products that make it easy for owners of adjacent properties to sell together, which creates larger development sites that allow for more optimal uses of underutilized urban land.
What sets CityBldr apart from other appraisal sites such as Zillow and Redfin that
evaluate and estimate property value?
First, we value both residential and commercial property. We may have created the first algorithm to instantly value every property in the country. Second, we value the highest and best use of property and juxtapose that with its present use, creating an arbitrage index. Last, we developed the first combinatorial property valuation algorithm, which determines what all properties are worth when sold with neighboring properties. We can determine the value of two properties sold together or 22 (the latter just requires a few more clicks on the map).
What kind of data and sources does CityBldr pull from when creating valuations for property owners? Does CityBldr seek alternate opinions from industry experts? Why or why not?[We have] 51 unique data sources to date, and we’re always looking for more. We categorize these 51 sources into what we call the 4 Ps: public, private, paid and proprietary sources. We’ve been able to get exclusive licenses to several of the paid sources for three to five years.
We never open a market before collaborating with experienced property valuation professionals inside that market. These can be brokers, builders, developers, investors, architects, engineers, appraisers, land use consultants, environmental experts, researchers, planners, REITs, local governments, regional authorities and municipalities. Each of these helps us refine our understanding about local property valuation methodologies and varying nuances and considerations with respect to local land use.
Do you think a shift in the real estate market will occur as more individual
homeowners opt to sell to developers rather than simply placing their home on the market? Why or why not?
We do. McKinsey research found that 70 percent of the United States will live in the urban core by 2050. This means that over the next three decades, an additional 27 million housing units will need to be created in the urban core (spoiler alert: our cities will be under construction for the next three decades).
This reversal of several decades of migration to the suburbs will spur massive development in U.S. cities, and owners will increasingly become aware that selling to builders and developers may be their best option.
How does CityBldr ensure that its business model and technology will be relevant in the future in an industry that is so fast-paced and dynamic?
We consistently talk to our customers. When people tell [us] our products and services suck, we stop offering them. When they love them, we double down. Before we create a new product, we find pain in the market. It’s simple, but it’s also the Amazon method. By continuing to listen to our customers instead of believing the market will eventually come around to our way of thinking, we maintain our relevance and right to exist in the market.
Many traditional players in the market take for granted that they have the right to exist, but only by providing a differentiated product that adds value and responds to the markets’ needs does a company earn that right.
How have databases such as CityBldr changed how brokers interact with their clients?
It’s certainly made groups of owners approach brokers more often. Over 100 groups of owners have signed up for CityBldr to discover their collective property value, and we in turn connect these groups of owners to brokers to help them sell to builders and developers. I don’t know how often this happened in the past, but it’s becoming common on our platform.
How does CityBldr see itself moving forward as technology continues to advance?
We’re excited about closing our first fund and making instant offers on properties. If this fund is successful, we’ll raise more funds focused on various asset classes, strategies and trends.
What markets has CityBldr set its sights on next? Why?
Too many to mention, but the trend we look for is emerging tech hubs. We see many of these germinating in the US and abroad, but we don’t pull the trigger until a major tech employer moves there first. Their commitment to a new market ensures the most critical trait we look for in a city: tech job growth.