Whether you own or manage commercial properties—or work with investors looking for healthy returns—you understand the need for an open, transparent relationship with tenants. Data from the U.S. Bureau of Labor Statistics, going back more than 25 years, shows that only about 45–50 percent of private-sector businesses survive their first five years of operation, regardless of the economy. Business closures and changing consumer behavior during the pandemic magnified the need for owners to understand their tenants’ performance and even take an active role in tenants’ success. Now, a New York–based startup company has devised a solution that gives owners something akin to a tenant scorecard. We asked the company founder and CEO to share the story behind the platform and what he aims to achieve.
When I worked as a tenant rep in New York City, I would get a client into a property and then I’d get questions like, “Do you have any insight on how I should market in this neighborhood?” I felt as though I needed to become more of an adviser than a broker at that point, and I didn’t have the tools to do that. That’s what inspired me to solve commercial real estate challenges with software solutions.
I put together a team of property owners, retailers, restaurateurs, and technologists. My partners Xan Goldberg and Debbie Reich are property owners and co-founders of the product, along with our tech guru Alex Libkind. Our team sat back and asked, what’s driving this industry? The answer is consumer spending. Transactions are the performance analytics for retailers and restaurants. With Guesst, lenders, landlords, and tenants can all see what the consumer is spending—online, in store, and BOPUS [buy online, pick up in store]—in real time. The overarching mission is to foster trust and transparency between property owners and their tenants, with the ultimate goal of helping small to medium-sized businesses thrive. Currently, we’re privately funded. Building owners pay a monthly subscription fee of $150 per tenant. If you have a property with 10 tenants or more, we give you a customized rate.
We work with multiple point-of-sale systems—Shopify, Square, Clover, Toast, Lightspeed, and so on. Our job is to integrate with the ones that we feel have the most adoption with small to medium-sized businesses nationally. We also integrate with the third-party delivery services, like GrubHub and DoorDash. We’re not exclusive to any one of them. That’s why our customers like our platform. The delivery services all work in different silos, and a restaurant could be using one or three or 12 of them. And we’re getting granular with the data—not only which delivery service picked up the goods but what percentage did they charge? If all the stakeholders have access to this data, they can make better decisions going forward.
Everybody needs performance analytics. My wife and I track our steps. People track their stock portfolios daily. We envision a world where property owners will be able to track the performance of their tenants—and not just track it but move from being reactive to being proactive so they can help tenants succeed.
On the owner side, we’re working with retail REITs and also street retail. Our goal is to work with property owners that have 1 million to 20 million square feet of retail. That way we’re able to aggregate and anonymize that data and share it with the right players, as long as they have the right permissions in place. Building owners can track the daily sales performance of all their tenants on a single dashboard. Our newest feature, Daily Auto Debit, allows tenants to automatically transfer funds directly to the property owner based on their individual lease arrangement. The feature converts long term monthly payment obligations into current daily cash flows.
For brokers, the platform is not only a tenant retention tool but a way to court new business, because now a new business can test a certain area for a short time, and the property owner can see what sales are. Then they can land on a fixed rent. Brokers, owners, and tenants can collaborate for success. Our goal, over the next two to five years, is to scale across the United States, maybe even North America, and then make our way of abroad.
We’re in a period where brick-and-mortar businesses need more attention. I feel property owners could become a little more like community managers, where they’re looking at the data, leaning in, and helping tenants see how to turn fixed costs into variable costs and save money—not 90 days from now, not a year from now, but in real time. Ultimately, I want to help small and medium-sized business keep dreaming. I feel like that’s why I was put on this planet.
Earlier in my career, I worked in marketing for Arista Records. I used to do tours, what I call cultural currency events, for artists like Biggie, Whitney Houston, Celine Dion. My job was to cultivate a new audience, to get people off their couch to come see an artist—like Alicia Keys, who, at that time, nobody had heard of. That’s where I learned to tell compelling stories.
Today, the retailers and restaurants that are going to rise and stay current and relevant and meaningful have to tell compelling stories to get people off the couch. We weathered the storm, and we’re here to make sure that we see a harvest, and the harvest is getting back to some normalcy in our neighborhoods. We are moving into the world of localization times 10, and I see a lot of optimism in small to medium-sized businesses. Some are scared. Some are on the fence. But I’m talking to people who have got their second round of PPP loans, and they’re looking for creative lease terms.
To me, it’s kind of like a blank canvas, and we can create a masterpiece. If we don’t, someone else will do it for us. At Arista, I remember someone dropping a compact disc on my desk and saying, “Hear that? You won’t hear that sound next year.” He was talking about the impact Napster and other music-sharing platforms would have, and he was right. I made a promise to myself back then that if I could either buy technology or partner with technology to stay relevant on the job, I would do it. Yesterday it was digital music. Today, we hear about bitcoin and NFTs. It’s not going to stop. As I like to say, some people’s imaginations are life’s coming attractions. I’m pleased to say, I’m all in with a technology solution for the retail real estate industry.
Jay Norris, a former real estate broker specializing in tenant representation, is co-founder and CEO of Guesst. Through integrations with retail and restaurant point-of-sale systems, Guesst offers all parties—brokers, property owners, lenders, and tenants—a window into real-time consumer spending patterns.