VTS has become one of the most prolific commercial property technology companies. They have captured much of the market when it comes to lease and transaction management in the U.S. in multiple commercial property types. With such a prominent position in the commercial property industry, the company has expanded into other categories to keep up its breakneck growth. They raised eyebrows (and the bar for valuation) when they acquired the tenant engagement app Lane for $200 million and the property operations tool Rise for $100 million, both in 2021. Now many, myself included, wondered why they decided to branch into building management software and what other categories they have on their roadmap. I recently had a chat with a co-founder of the company, Ryan Masiello, to learn about their product expansion strategy.
The first thing he told me was that he wants VTS to be known for pushing boundaries. “We want to be the company that is always getting into the newest, craziest stuff,” he said. He explained that the company has already shifted a lot since its inception. They started out as a virtual property showing company (VTS stands for View The Space) but shifted into a transaction platform.
Their new product, Activate, is a building management platform that will connect to their other suite of products. The reasoning behind the move is to become the go-to product for managing a building just like they have done for leasing one. “We have become an operating system for brokers,” Masiello said. “Now we want to become the operating system for the entire building ecosystem.”
Since data created during the leasing process can be useful to building managers, and building management metrics are increasingly being used in leasing negotiations, the VTS team thinks integration between different functions will help their expansion. “As a company, we are really good at bringing data to life,” Masiello said. “We think that we will be able to help our clients use data from every aspect of our platform to make better decisions.” With the new product offering, metrics like tenant satisfaction will be utilized by the leasing team while information about the current state of the leasing market can be accessed by building management.
In a time when buildings use dozens of different types of software, often all from different companies, Masiello thinks VTS can provide a bit of simplicity. “One of the things we hear most from our clients is that they want fewer tech vendors,” he said. He also noted that as market conditions get worse it will force many property companies to simplify their operations.
At the end of the conversation, Masiello wanted to dispel a misconception about his company. “Most people think that we just build products for large landlords but, in fact, the majority of the buildings on our platform are owned by landlords that only own a handful of other buildings,” he said. Since most big landlords already have building management and tenant experience software in place, it is exactly these smaller landlords where the future market for building management software lies.
At this point VTS may be considered a “legacy” PropTech company. It has established itself as one of the leaders in an important part of the commercial property universe. But even with its size and following, the heads of the company are not staying stagnant. The move into tenant experience software shows that they are not willing to sit complacently while the young startups continue to innovate. If they continue to successfully expand into other categories, VTS could continue the fast paced scaling that they have been known for and further solidify themselves as a go-to tool for an even larger part of the property industry.