Tale of a technology innovator
- By Wendy Broffman
- Published August 2016
Every industry has its innovators, the thinkers who introduce new ideas, methods and products, some of which go on to disrupt or, in some cases, displace an existing market or technology with something brand new and more efficient.
In the multifamily arena, where change is slow to manifest and acceptance of new technology even slower, there are very few true disruptors.
Much of the industry changing technology, like revenue management that emerged in 2007, was driven with investments from the large REITs like Camden Property Trust and the former Archstone-Smith and, while that technology is widely used today by medium to large apartment companies, it was slow to catch on, even among some of the other REITs.
"There hasn't been a lot of innovation or disruptive technologies developed for the apartment industry in the past ten years that I can think of," said Mike Mueller, CEO of LeaseHawk, the most recent of several wildly successful companies in the multifamily arena that he has founded or funded throughout his multifamily-focused career.
A man with a vision
Mueller is one of those technological trailblazers, who early in his career envisioned leveraging technology to solve problems not only of the day, but foreseen in the future, pinpointing solutions to needs many people weren't even aware would be an issue in years to come.
He envisioned the Internet and then the smartphone would change the way owners and investors marketed and rented apartments. He founded one of the industry's first Internet Listing Services (ILS), and the first online apartment reservation system and, in April 2005, to help educate the industry, launched the Apartment Internet Marketing Conference (AIM), which was purchased in 2007 by Steve Lefkovitz of Joshua Tree Internet Media.
His cutting edge visions have fueled his private investments and, since 1999, Mueller has put his money where his intuition leads him.
He made ground-floor investments in RealPage 16 years ago, when it was still a DOS-based system, and funded the startup of LeasingDesk and advised MyNewPlace, both of which were acquired by RealPage in 2007 and 2011, respectively. RealPage went public in 2010.
"I knew the future was going to be a computer-based property management system that Steve Winn, CEO of RealPage, was creating, so it turned out to be a very good investment for me," said Mueller, who now envisions a completely new type of platform.
He believes when investing, timing is everything-being in the right place at the right time with the right technology-but he credits his team for making his visions a reality. "I may have a vision, but it's the people that I have on my team that are able to implement and execute it," he said, adding that some have been with him for more than a decade.
According to Mueller's LinkedIn page, his current investments include Capital Access, a privately owned finance company that provides loans to small businesses; Contatta, a privately held software company similar to Slack, and AnyOneHome, a call center company for the apartment and single-family market. He also owns interests in GrayHawk Capital, a diversified portfolio of technology companies, and MindCrowd.org, a collaboration with TGen that conducts memory research related to Alzheimers.
To bring his latest ideas to fruition, Mueller had to wait nearly 20 years for technology to catch up.
The idea behind disruption
Today, through LeaseHawk, Mueller is merging best practices and technologies from a number of other industries to create an entirely new platform that promises to change forever the future of apartment leasing and the way apartment owners and operators manage their customer/renter relationships.
Mueller sees a future where analytics measure every aspect of every customer communication and interaction, whether text, email or voice calls, making customer revenue management finally available, he said in June.
Mueller's personal foray into and interest in the technology field began during his 16-year stint as a commercial real estate broker, a career he entered after graduating from the University of Nebraska-Lincoln with a BS degree in business, after being accepted to the school on a pole-vaulting scholarship. Just recently he was invited to serve on the Dean's Advisory Board.
While working from 1979 to 1995 as a VP at Coldwell Banker Richard Ellis (CBRE), one of the world's largest brokerage firms, Mueller utilized VisiCalc, the first computer spreadsheet program for personal computers, originally released for the Apple II by VisiCorp, to analyze apartment buildings in Phoenix.
That effort in 1983, years before the desktop or personal computer became commonplace among real estate brokers, resulted in a 23-building portfolio sale for $165 million-a deal that in today's dollars would translate into a billion dollars plus, he said.
Mueller's feat with the Apple II prompted Apple to write a story in their newsletter describing how he leveraged the computer to generate success in commercial real estate.
By the early 1990s, Mueller was cataloging, via a computer database program, the rental rates and value of every apartment property in Phoenix-a tedious task that paid off when apartment owners called him to ask what their buildings were worth.
Because he already had the information in his database, he was able to fax the value of their buildings to his clients immediately, while most brokers might need a 24-hour turnaround window before they could gather and pass on similar information to their clients.
"Within a matter of seconds I'd say, 'Walk over to your fax machine, I just sent it to you,' and they would be blown away by the speed and efficiency the technology offered," said Mueller, adding that today, just as it was back in the 80's and 90's, "technology is really about speed and efficiency and how to do your job better."
The database also paid off when his friends and clients asked about apartment rents in any of the areas around Phoenix.
"I could easily print out what we called a rent survey and show them exactly where the building was on a geocoded map, what the different floor plans were and the rents. You couldn't get that information back in the early and even mid-90s because classified advertising and the print publications typically didn't publish pricing or give detailed floorplan information," he said.
But Mueller realized there were bigger fish in the technology sea.
"The problem I was solving for then and now solving for 20 years later, is how to quickly, easily and accurately provide an apartment renter, who is looking for an apartment home, the real-time information they need to help them make a leasing decision. The more information they have at their fingertips, the easier and faster they can make that decision," he said.
Publishing lead times made it difficult to include this information because it would be outdated by the time it was published, since some periodicals, like ForRent Magazine, came out monthly.
So Mueller had the idea to include in the printed rent ad a number to call for pricing-258-RENT.
"The technology used at the time, and still used today, is referred to as an IVR, or Interactive Voice Response system that prompts the caller to hit a certain number on the keypad for a specific area such as 1 for Phoenix or 2 for Scottsdale, before prompting the caller to hit a key for the number of bedrooms he or she is looking for."
"The technology forced you to go through a lot of prompts, which was cumbersome, but, at the end, the system had enough information that it would then fax you a list of all the properties that met your criteria."
"When I launched that back in the mid-90's, it was great technology and we had a lot of interest, but it was very expensive because, in order to get people to call 258-Rent, you had to advertise on billboards, in magazines and on radio," said Mueller.
Moreover, the challenge of which advertising source got credit for the lead and ultimately the lease was and is still opaque.
"When you walk into an apartment property it was typically the rental magazine that got the credit for the add source, probably because they delivered donuts and had the relationship with the leasing agent. So it was frustrating," said Mueller, recalling how nearly every magazine subscribed to during that time period included an AOL disc to sign up for Internet service.
"I must have had a collection of about 50 of those. I said to myself, 'This Internet thing is really the future. It's a lot faster and easier to find information and now everyone has access to it across the country,'" he said.
With that realization, he approached the CBRE board of directors in 1995, explaining he wanted to catalog every apartment in the U.S. and put them online so they would become searchable for renters and brokers alike.
"I explained that we could use that information to do all kinds of analytics and proformas. They said, 'That's a nice idea, Mike, but stick with what you know. Go back to being a broker.' I said, 'Well, if you don't put me in business, your competition will.' And I went to Bill Millichap at Marcus & Millichap and about half an hour into the conversation, he asked me, 'How much do you need to launch and when can you get started?' because Bill was in Palo Alto and saw what was going on with the Internet.
"So I figured out how to catalog all the apartments in the United States and created a huge database-which became one of the very first ILSs-and we put it online under the heading 'AllApartments.com' to ensure we popped up at the top of the list, because back then everything online was categorized by alphabet, and AllApartments also was descriptive of our service," explained Mueller.