2020 had been a tough year from all aspects, and at this point, it seems that 2021 is working tirelessly to catch up. Too many companies and too many fields were required to adapt to the ‘new normal’ and innovate their future with the hope of staying in business. New York City, which was the epicenter of the virus up until a few months ago, witnessed its shiniest star, the real estate market, taking a huge hit and failing to recover. The exodus from the city may now be over, but this real estate broker’s heaven has still undergone a serious change.
One of the big questions that the coronavirus pandemic has raised in New York is whether the Manhattan rental market can ever fully recover. While we begin to see a light at the end of the tunnel with lower prices and higher demand, innovation may be at hand to expedite the recovery.
Knock is an AI-based end-to-end leasing platform that automates the entire leasing process, from lead generation and self-touring to application & lease signing. The company pivoted its offering last August as Covid continued to affect landlords and tenants. “We are currently working with some of the largest landlords of buildings across Manhattan, Brooklyn, Queens, and the Bronx’’, says Erez Cohen, Co-Founder & CEO. “Our platform has facilitated thousands of self-tours over the past few months.”
Cohen and co-founder and CTO Guy Yoshpe, both served in the IDF’s prestigious Intelligence Corps Unit 8200 and later in prominent cyber-security companies.
When Cohen moved to NY as part of his previous job, he was surprised by what he describes as “the outdated NYC leasing process:” “Everyone hates searching for an apartment, and the current process especially does not meet millennial and Gen Z expectations of an on-demand and empowering experience, nor does it utilize technology to remove the enormous amount of friction throughout the process.”
He realized that the residential real-estate-rental process is extremely inefficient and takes much longer than it should. “Why can’t you get off an Uber in the west village, tour 30 units in a few hours with no preparation beforehand, and sign a lease, all in the same day?”
Shortly afterward, this idea became a vision and the Knock founders decided to use their substantial security backgrounds and technological skills to turn this vision into a reality; little did they know what was in store for the city and the world. When Covid-19 hit, they realized their vision should be pivoted to create a full digital leasing solution with full automation of every component of the residential leasing process.
“Landlords and property managers are wasting $20B annually on leasing inefficiency, including long vacancy periods, inefficient agent costs, time-consuming scheduling and touring. This inefficiency is amplified by today’s circumstances. ‘’It takes days to bring a lead into a unit,” they claim. “About 30% of all inquiry emails and scheduling requests do not receive a response. The other 70% often receive a response days later. In addition, there is no visibility, no analytics, and no feedback to learn from and optimize the process.’’
They’ve noticed that useful information for landlords, such as costs of visits, the demographics of potential customers, etc. is not available. “Landlords are forced to rely on their agents to do their job, pay high broker fees or leasing officers’ salaries, and suffer from long days that the unit is on the market due to the friction in the process,” Cohen and Yoshpe insist. “For the renters, the automation value is obvious. Most of us have been frustrated due to the overwhelming friction in the rental process. Renters are always waiting for the agent to respond, arrive, and process applications.” With the Covid pandemic, in-person showings may be one more aspect that leaves renters behind.
The Landlords do not have to work with them, at least not at this point. “But they do have the option to work with us directly, in the same way, they would work with traditional brokerages. Aside from the increased efficiency, visibility, and fewer days on the market, an automated platform charges much less than a traditional broker and can save landlords hundreds of thousands of dollars a year.”
The Israeli entrepreneurs have built a tailored solution to replace each element of the leasing process. Each step has its own unique proprietary technology that brings efficiency to each element. “When we add a new unit, we use live big-data of relevant recent transactions to evaluate the most accurate rent pricing for the unit.” Following that, the discovery process is in charge of lead generation using syndication technology that syncs Knock listings to every existing 3rd party service, including StreetEasy, Zillow, Apartments.com, RentHop, Craigslist, Facebook, and more, as well as an in-app search engine. Today, traditional brokers do this manually.
When a potential renter from any listing service sends an inquiry, the AI Leasing Bot, which, in the spirit of Siri and Alexa, is named Sharon, responds to the inquiries within seconds and follows up every single lead throughout the leasing funnel, 24/7.
The potential renter can immediately check out the apt. “That is why we created self-touring technology that enables verified visitors to tour apartments on their own, in person, without scheduling, and without an agent on-site. While renters tour on their own, we have security measures in place to ensure we know who is in the building and exactly when they are in the apartments.”
For screening and lease signing, the system verifies users prior to touring. “If they want to apply for the unit, the platform facilitates the application process, from credit score to a background check and lease signing, including a security deposit and first month’s rent.
The real estate market in the Covid era is already shifting. Leases are now being signed digitally, payments are online, and video tours are becoming more relevant. Cohen and Yoshpe believe that there is no reason to stop there. All major cities are experiencing record-high vacancy rates, and the friction in the process is similar throughout cities in the US, as well as outside of the US. “Our technology assists landlords and tenants and can make a broker’s job much easier and more efficient. Any industry that has not been completely disrupted needs to adopt technology to stay relevant. Residential leasing is no different. Brokers”, they insist, “need to reinvent themselves to stay relevant in this market. Unfortunately, we haven’t seen them make that shift yet, which is why we have been targeting directly to landlords.”