The following article was originally published in Banker & Tradesman on Dec. 16th, 2018
Who: Gabriel Safar
Title: CEO, LeasePilot
Industry experience: 20-plus years
With his background as a real estate attorney, Gabriel Safar knows firsthand about the piles of paperwork that are generated by even the most routine lease transactions. That led to the idea for his Boston-based software startup, LeasePilot, which is designed to streamline much of the back-and-forth between landlords and tenants during negotiations. LeasePilot went live in March 2017 and now is helping process 100 lease transactions monthly. Its clients include Oxford Property Group, Washington, D.C.-based JBG Smith and Indianapolis-based shopping center REIT Kite Realty
Q: How did your background as a real estate lawyer influence your vision for a software product such as LeasePilot?
A: I spent 10 years at large firms like Bingham McCutchen when it existed, and Goulston & Storrs. I’ve been all-in on LeasePilot for four years now. It’s not a legal service provider– we’re a technology provider. Our mission is to pair innovative and scalable technology with legal customers to dramatically speed up the leasing transactions.
It takes about 90 days to go from understood and agreed-upon business terms to a closed lease. I quickly came to the realization that source of delays is not something any other industry would accept with their inventory. There are huge revenue and cost complications. The other thing that dawned on me is I recognized the lease is the sole source of truth in the commercial real estate business, and it’s locked up in paper documents. People are going through leases and trying to understand them. It’s a missed opportunity.
I’d been reading a book by Richard Susskind, a legal futurist, looking at the future practice of law, and identifying shortcomings and opportunities. Reading his book really inspired me. One thing I hear from customers all the time is that time kills deals. When you have a 90-day lag between the deal and getting something signed, there’s always the risk that transactions die.
Q: How does LeasePilot work?
A: We call the guts and heart of LeasePilot context-aware automation. What I mean is that LeasePilot pairs a technology platform while maintaining and recognizing legal customs and practices. A lease is an agreement with lots of dependencies and relationships. That’s the type of scenario where software shines. Part of our set-up involves modeling that lease and giving lawyers and non-lawyers a set of automation tools that allows them to free their minds when you think about changing provisions in the lease. The automation takes care of all that. The lawyers can free their time to think about how they can add value in the transaction.
We’ve seen scenarios where four hours of legal work is turned into 20 minutes of administrative assistant work. It might take a week for a lawyer to free up four hours. An administrative assistant can free up 15 minutes every day. You add that up and you find the time savings. But what I find extraordinary is the data element. By drafting a lease in our platform, we’re acquiring an enormous amount of valuable and untapped information about a landlord’s portfolio that’s locked up in the paper documents. All the information that runs a real estate operation’s other system, the CRM, needs information from the lease. How does the information get into the system? They have to read the lease, type in an abstract, and give it to another person. With LeasePilot, we eliminate that process.
Q: What’s the business model and fee structure?
A: It’s a software-as-a-service model. There are two ways we charge in our fee system: the first one is different solutions bundles, and the second is based upon transaction activity. LeasePilot is designed to align the value we deliver with the software pricing. The primary value is reducing that 90-day period as much as possible and making that data available to consume.
Q: Where are the savings to clients realized?
A: The first is by reducing that period. There are huge revenue implications. That’s what our customers are most interested in. You sign sooner, you collect rent sooner. The second element is that 90 days of back-and-forth does represent a lot of cost. Part of that is legal, the other is just opportunity costs for people in their organization who could be doing other things. The last is there’s an administrative cost of doing all of that.
Q: Where did LeasePilot get its initial funding?
A: We raised from friends and family to start and had a number of real estate lawyers as participants. Then we raised our first institutional round from Rose Park Advisors, which uses the research of Harvard Business School professor Clayton Christensen, author of “The Investor’s Dilemma.” They only invest in companies that are consistent with the principles of disruptive innovation. We can say we have the imprimatur of the people who wrote the book on it.
Safar’s Five Favorite Albums:
- Random Access Memories by Daft Punk
- Blues + Jazz by Ray Charles
- Goldberg Variations played by Glenn Gould (historic 1955 debut recording)
- Another Side of Bob Dylan
- Lullaby Sleep Baby – a signal to his two young kids that it’s time for bed.