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Honest Buildings raises new funds for CRE project software

A US$30-million round of funding has been closed by New York City-based Honest Buildings, which b...

A US$30-million round of funding has been closed by New York City-based Honest Buildings, which bills itself as the only project management platform built for and backed by real estate owners.

Image: Honest Buildings provides project management software designed specifically for commercial real estate.

Honest Buildings provides project management software designed specifically for commercial real estate.

Honest Buildings’ software is utilized by several Canadian-based property owners and managers, and one of its key investors is First Capital Realty.

“Owners, operators and managers rely on Honest Buildings to manage billions of dollars in total project value through centralizing project data, increasing transparency, automating bid management, capital planning, reforecasting and standardizing reporting,” said Honest Buildings chief brand and performance officer Crystal Proenza.

“Industry leaders like Brookfield, Oxford Properties, Beacon Capital Partners, Invesco, SL Green, QuadReal, Altus Group, First Capital Realty, The Durst Organization, Silverstein Properties, JBG Smith, Harvest Properties, Parkway Properties and Rudin Management utilize the intuitive software to streamline project management processes, increase revenue through faster project delivery, reduce project costs and make data-driven decisions on projects portfolio-wide.”

Honest Buildings says companies using its software are able to save five to 15 per cent of project costs, and reduce project completion times by five to 20 per cent.

The founding of Honest Buildings

Chief executive officer Riggs Kubiak launched Honest Buildings after a decade in the commercial real estate industry, including five years at Tishman Speyer in acquisition, asset management and global sustainability. Since building owners take all of the capital risk on projects, Kubiak’s philosophy is they should also be directly involved with his company and its technology.

“He learned first-hand the frustration and inefficiency of the real estate industry relying on outdated, paper-based processes, and he believes strongly that innovative enterprise technology can solve these problems in the same way it has in almost every other industry,” Proenza said of Kubiak. “He wanted to build the product he and his colleagues needed and partnered with a few of the most influential real estate owners in New York City to do so.”

Honest Buildings has now closed its Series B funding round, with an additional investment of US$5 million led by First Capital, one of Canada’s largest owners, developers and managers of grocery-anchored, retail-focused urban properties.

The latest investment in Honest Buildings raises the total to date to US$48 million.

The privately owned company doesn’t disclose revenues.

“We take a partnership approach to the market and believe the future of real estate tech requires a deep collaboration and integration between real estate owners and the technology companies themselves,” said Proenza.

Latest funding part of rapid growth

One way Honest Buildings has differentiated itself, according to Proenza, is through its dedication to user experience and design. The latest funding is focused on accelerating technology and product functionality.

“The product team spends countless hours working directly with customers, watching them use the product and looking for ways to make this business software as intuitive, or even more so, than many of the consumer applications that people rely upon in their personal lives,” said Proenza.

Honest Buildings’ project volume increased by 13 times and facilitated $13 billion in projects managed during the past two years. A company survey conducted in Q4 of 2016, involving 60 property owners utilizing the software, found it saved those firms more than $100 million in project costs during the year.

Honest Buildings doubled its workforce in 2017 and continues to grow, Proenza said. The company is now at about 80 employees.

Since several of Honest Buildings’ investors and users are based in Canada, Proenza said a satellite office could open here in the future if growth continues at the current pace.

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