June 14, 2024
TLDR: Henry is an AI copilot for commercial real estate (CRE) brokers that seamlessly integrates a brokerage’s internal data set with external sources to generate custom presentations and financial modeling for deals. Our mission is to help CRE brokers close more deals faster, earning more while doing less manual work. To achieve this, we’re initially focusing on enabling brokers to generate marketable presentations, using their own branding, in seconds—a task that typically consumes 3+ hours a day.
The U.S commercial real estate (CRE) market is valued at over $16T with annual transaction volume of ~$1.5T (absolutely massive). CRE is responsible for some of the largest wealth creation in history - Stephen Schwarzman @ Blackstone, Sam Zell @ EQR and Stephen Ross @ Related - but it is so much more than just a means to generational wealth. Real Estate is personal. It’s the apartments we live in, the restaurants where we dine, the stores where we shop, the resorts where we vacation, and the offices where we work. There is just something special about witnessing the skyline of NYC, SF, or Chicago and knowing it all ties back to our market. CRE has been the main driver of significant economic growth in some of the greatest periods of human history: from the Industrial Revolution to the post-WWII boom to the Roman Empire.
However, the commercial real estate industry is notoriously slow to adopt technological change and a notoriously hard market for tech companies to crack. For every winner, there is a graveyard full of companies that couldn’t quite figure out the customer. But that makes this so much more exciting. The beauty of building in a big market with a tricky customer is that when you create a truly great product, there is no one around to stand in your way of total market domination. And that is exactly what we intend to do here at Henry.
Every commercial real estate transaction requires an investment sales broker (transaction = when a building is sold from one party to another). Think of the investment sales broker as the glue of the transaction, without them, the deal falls apart. The broker is responsible for running the deal process end to end: from convincing the owner that it’s time to sell in the first place, to presenting the building to a host of potential buyers, to managing the bidding process, to quarterbacking the due diligence, and, finally, to closing the damn deal. This process of running multiple deals at the same time is excruciatingly painful, often requiring 15+ hour days and taking between 60-90 days to complete. Calling the broker a jack of all trades is not giving the role justice; the broker is a tightrope walking magician who must balance sales, underwriting, negotiation, and compassion with absolute grace. Despite the importance of the role in every single transaction, there has been virtually no software built to help modernize the process and bring the workflows to the modern era …hint hint until now.
We are developing the first GenAI native platform solution for CRE brokers. In short, our mission is to empower brokers with ‘superpowers’, enabling them to close more deals and increase their earnings. We’re starting with creating marketing materials for property (Like Offering Memorandums, and Broker Opinion of Value), a labor intensive and repetitive task that consumes over 50% of a broker’s time.
Without going to deep into the nitty gritty, the presentations include everything from the financials (private information such as the rent roll, t-12, P&L, lease details, proforma, capex), property description (publicly available information like the photo sourcing, layout, lot size, rentable square feet, building height, property condition report), and other nuances such as owner information, market summary reports, tenant information, and a bespoke narrative (why is the owner selling, why is this a good deal, what does the future look like). For a broker, the traditional process of synthesizing all of this information is time consuming because it’s scattered, unorganized, and comes from both private and public sources.
I was speaking to a broker yesterday about her OM process and she mentioned she had just spent 3 hours looking through, and I kid you not, city county minutes to research upcoming development projects in Durham, NC. From there, she spent 45 minutes on Apartments.com going unit by unit to benchmark rent comps because that’s the only way to do it accurately. Then she spent an hour researching recent demographic trends and major nearby employers to the subject property. Finally, she spent 25 minutes labeling aerial shots of the property that were taken on a drone. I’m showcasing this example to explain the nuances and complexities of these presentations. In short, analyzing, organizing, classifying, and packaging the data in a presentable manner is excruciatingly painful and stuck in the stone age. That's where we come in.
Henry streamlines this workflow by retrieving information, making sense of it, presenting it effectively, and distributing it in a finished product (that can be edited!). As an AI copilot, Henry aggregates data from various internal and external sources, organizes it, and builds custom presentations for each deal. This focus on presentations is our entry point into the broker's workflow, with plans to automate further aspects like prospecting, deal management, search/data retrieval and more.
Our long-term vision is to transform the unstructured world of CRE data into the most powerful CRE database in the world. By capturing data from the heart of every CRE transaction (the broker), we have unparalleled access to CRE data’s source of truth and in turn can provide unparalleled insights and capabilities. As more brokers use Henry, the data will improve, offering more accurate and real-time data than competitors like Costar ($40B market cap), which still relies on call centers. Our goal is to start with a best-in-class workflow solution and build an impenetrable data moat.
The commercial real estate industry is at a pivotal moment. Despite its enormous economic influence, it has lagged behind many sectors in adopting technology. Market trends have placed brokers under increasing pressure to close deals faster and more efficiently, making the need for tools that streamline workflows and enhance productivity more urgent than ever.
The explosion of data from both private and public sources coupled with recent advancements in Generative AI presents an untapped opportunity. This data remains largely unstructured and underutilized, and Henry's ability to aggregate, organize, and analyze it have created a perfect storm for innovation in real estate. By launching Henry now, we are poised to lead the digital transformation of the CRE industry, empowering brokers to achieve more with less effort, make better decisions using better data and setting a new standard for real estate transactions.
Adam and I grew up 2 blocks from each other in the Bay Area. We played on the Varsity tennis team as doubles teammates since we were freshman and have remained close friends for over 15 years. We know each other's strengths and weaknesses, temperaments, and abilities better than almost anyone else. If you think founders get upset at one another, let me tell you it’s a whole different story when you both have tennis rackets!
After high school, Adam went on to graduate at the top of his class in computer science at Colgate at the same time as being a full time firefighter for the Hamilton Fire Department and building his first company, Halligan. Adam sold Halligan while in college for $3.2M. After college, Adam wanted to learn how to scale an engineering team beyond just himself which is why he joined ZocDoc and grew to managing a killer 27 person team.
My story isn’t quite as good as Adam’s. Before starting Henry 30 days ago, I co-founded and led all GTM @ Lev, a marketplace connecting cre investors to lenders. Lev raised $110M of venture capital, closed over $3B of transactions since its inception and generated over $10M in annual revenue.
Adam and I are stoked to be working together on this massive problem and bring the commercial real estate industry into the age of Generative AI. We are very thankful to YC for believing in us off no more than an idea and are hyped to be moving to SF next week! If you’ve gotten this far down on our non technical “white paper” we just want to say thank you for the support, it really means a lot. Now let’s get back to work.
With Love,
Sammy and Adam
P.S
If you are a commercial real estate broker please please reach out to me directly sammy@henry.ai or book time with me here. The only way we're going to be able to deliver a great product is by listening to you.
