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Commercial real estate, particularly the retail variety, has taken a big hit from the coronavirus pandemic. Rent payments have been missed, and stores have been vacated as a quarantined populace shifts even more of its shopping online and away from brick-and-mortar establishments.
Office space, too, has entered turbulent times as businesses transition to remote workforces in response to the COVID-19 crisis. Even companies that own their headquarters, such as Tampa-based insurance firm HCI Group Inc. and Venice-based drinkware manufacturer Tervis, have put those buildings up for sale, seeking $47.5 million and $14.5 million, respectively, for the properties.
“I've been hearing about the retail apocalypse for about 15 years, and it just hasn't happened.” Jeff Landry, co-founder and CEO of ID Plans
The trend could turn out to be bad news for CRE valuations. But that could be good news for Tampa-based ID Plans, a tech company that uses a web-based, Software-as-a-Service platform called ID 360 to help CRE property owners nationwide manage and market properties. While the company had handled real estate data for clients for nearly two decades, ID 360 is its newest, and most robust iteration, of the service.
Founded by Jeff Landry and Mike Rustenberghe in 1999, ID Plans has seen other periods of turbulence, from the dot-com crash to the recession of the late 2000s, roil the CRE market. Each time, the company, with 45 employees and some 400 clients, has come out stronger. Landry, 57, declines to disclose the privately held firm’s revenues but says sales have grown about 28% year-over-year from 2017 to 2019.
The coronavirus pandemic, however, is an altogether different type of crisis. Landry, in guiding ID Plans to maintain its growth trajectory, says the first thing to do is to not panic.
“I've been hearing about the retail apocalypse for about 15 years, and it just hasn't happened,” he says, pointing out U.S. retail sales rose by 17.7% in May, far above the 8% forecast. “It might just be a knee-jerk reaction, but I think it will continue. People are going to go back out and shop.”
ID Plans, Landry says, has been careful to focus its sales strategy on open-air strip malls and shopping plazas anchored by grocers like Publix, rather than enclosed malls that have struggled mightily, even before COVID-19, to attract shoppers and, thus, generate little interest from property brokers and REITs that might want to use ID 360.
“There will be more vacant spaces, so we couldn’t be busier,” Landry says, adding it was pure coincidence — or perhaps serendipity — that the company rolled out ID 360 amid a global pandemic that has severely curtailed business travel. “We've introduced a virtual tour that’s very upward trending.”
ID 360 can show a user the condition of a building’s roof, down to the tiniest details. It also displays hundreds of data points that display everything from the age and location of the HVAC system to reports on Americans with Disability Act compliance. The ID 360 listing for a gym in a shopping center in Nashville, Tenn., for example, has 413 specific data points.
“We have data on more than 700 million square feet of property,” says Jordan Hearin, the ID Plans Chief Technology Officer, who played a key role in creating ID 360. “By the end of 2021, we should have over a billion. Quiet, for 21 years now, we’ve been collecting this data, building it and building it and building it.”
Landry says the biggest challenge has been updating the way ID Plans presents the data it collects. When he first started out, the paper-based product was called Remote Property Manager. Then, with a shift to PDF documents, it became Space Profile. But with information technology changing so quickly, it’s taken about five or six years, Landry estimates, to get ID 360 up and running — “To get it right,” he says, “has been a struggle.”
What hasn’t been a struggle, much to Landry’s surprise and delight, has been customer adoption. “Anytime there's change, there's going to be resistance,” he says. “But as it turns out, people really embrace the product. They love it, which is great.”
That statement is borne out by ID Plans’ sales trends, Landry says. About 97% of the company’s revenue comes from existing and returning clients, who pay a one-time data collection fee of $1,100-$10,000 and then a recurring monthly subscription that ranges from $30-$250.
ID 360 is “comparable to most other SaaS products,” Landry says. And although architects, who he views as the firm’s only competitors, can provide similar services, Landry says ID 360's platform wins the day. "We give clients a consistent delivery — the format’s always the same.”
(This story was updated to reflect the correct title of Jordan Hearin.)
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