Fifth Wall: Could this $212M real estate fund be the new norm?

Fifth Wall co-founders Brendan Wallace (left) and Brad Greiwe (right)

April 29th, 2020 – 10am CT. To register, please visit the Analyst Call page.

Brendan Wallace and his partner Brad Greiwe have just announced Fifth Wall Ventures, the largest commercial real estate-focused venture fund to date (well, as far as we know). Among its investors are heavyweight players such as CBRE, Equity Residential, Hines, Host, Lennar, Lowe’s, Macerich, and Prologis. Following the official announcement, the duo threw a launch party at their swanky new Venice, CA headquarters. Is this the return of the glitzy tech launch party?

We recently caught up with Wallace, and he assured us it was just a small get together. Regardless, Fifth Wall won’t be the last big fund debuting in the near future. In fact, he told us why we should expect to see even more (and bigger) players in built tech.

  1. The built world is a really big space. Wallace ticked off just a few segments he is tracking (real estate, construction, hospitality) and their share of gross national product. We got a little lost in exactly how he got to his total tally, but however you slice it, it’s a really, really big number.
  2. Real estate has produced some of the biggest unicorn companies. He cited Airbnb and WeWork as examples of recent startups in the real estate world valued at $10+ billion.
  3. The bar is still set low. You can achieve massive ROI with companies that digitize vendor logs or improve workflows, for example, which have low technological risk.
  4. The built world is still a hidden gem. Compared to other similarly giant sectors, the amount of money focused on venture in this industry is still relatively low. Wallace believes there is more venture money focused on the cannabis industry, even, than on the built space.
  5. The ecosystem for industry tech is not as fully developed as in other sectors. Wallace even suggested a potential Fifth Wall accelerator program in the future.

So, despite already having plowed millions into a handful of promising startups and raising a nine-figure corporate venture-supported fund, Fifth Wall might just be another chapter in a story that is still very much unfolding. Perhaps we shouldn’t be surprised to see several more $100 million plus built world funds announced in coming months.

As for the glitzy, Hollywood “dot com” era launch party we felt sure would mark the beginning of the growth of real estate tech venture?

“It is really more of an open house for the new space,” Wallace says. “I wouldn’t make a special trip for it.”