Eddie Kerman is Investment Director at London-based Pelican Partners, a real estate and private equity investment firm.
You will definitely have heard of social media app Clubhouse by now. A new app on the block, it’s offering a different way to utilise social media than visually orientated Instagram and TikTok. But what could it mean for real estate investors?
New social media platforms are generally greeted with enthusiasm and then a level of anxiety. After all, who wants to add yet another platform or app to their marketing portfolio? Some of the biggest names struggle to break the monopoly of current sites, so might it even be a waste of time – remember Google+?
So, what is Clubhouse and why is it opening doors for residential and commercial real estate investment?
How commercial real estate investors can benefit from Clubhouse
Currently, Clubhouse is only available on iOS. Android users will have to wait a while, but their version is in development. Clubhouse is an invite-only audio social media app. Think of it as a kind of mix of conference calls, interactive radio chat show style interaction and face-to-face drop in app Houseparty.
Clubhouse is solely based on audio-chat, so users can listen to interviews, discussions and conversations between other people they’re interested in. It’s like listening to a podcast that’s live and more exclusive. Users who are invited to the app select topics they’re interested in. These could be anything from business, health, tech to investment, real estate and financial topics.
Users must give the app as much info as they’re comfortable with about their interests. This opens up more individuals to follow and conversation rooms to join. A conversation room is basically like a conference call with an audience of listeners. When a live audio-chat is finished, it disappears in the same was a phone call. However, it is possible to record the live conversation.
The app is currently in Beta, having launched in March 2020. By May last year Clubhouse reached 1,500 users but a value of $100 million. This year, the developers intend to open it up to the whole world when it’s through Beta. New features are being added all the time, and as of 1 February 2021 Clubhouse has more than two million users, with a value of $1 billion making it a true Unicorn in the same vein as SpaceX and AirBnB.
Exclusivity offers opportunities to build influence
As there are hundreds – if not thousands – of conversations going at the same time on Clubhouse, there is always something of interest to listen to. And for investors of all kinds, there are endless learning opportunities. Real estate investing is a topic covered by experts on Clubhouse in the same way that all kinds of other financial information is analysed.
There is an option to listen to conversation rooms or individuals, and if the speakers decide to unmute people, questions can be asked too. And for anyone who has thought leadership on real estate investment to share, then the opportunity is there to set up your own interactive talk show style conversation. Just start a conversation room and start talking. Interested parties will find your room and listen in.
Because the app is so exclusive, those in the know are getting in on the act now. The word is spreading fast and the networking opportunities for real estate investors are there for the taking.
Commercial real estate investors can get involved from the ground up
Clubhouse offers real-time networking opportunities. But for real estate investors it’s about more than meeting people and connecting with peers. Investment deals also take place via the app.
Here’s an example. A commercial real estate owner in South Florida called Beth Azor set up a Clubhouse conversation room called ‘Space Tank’. Loosely based on the US TV version of Dragon’s Den (Shark Tank), the room invites small business owners to pitch directly to landlords. They try and get the cheapest possible pop-up rental space from a range of landlords, including some big names. Small business owners have a real chance to land a great deal on commercial real estate in a direct and accessible way – if their pitches are good enough.
If this is a bit too much risk for commercial property owners and investors, then there are plenty of networking opportunities to take advantage of. By typing ‘commercial real estate investment’ into the app’s search box, users will be shown a list of rooms and clubs that already have thousands of members. And while on the surface this sounds less impressive than the volume of people on apps like TikTok and Twitter – that’s the point. Commercial real estate investors that get in now will already be gaining opportunities when the app inevitably explodes.
No content creation needed – just clever use of networking opportunities
Because the app is still in its relatively early stages, there is a unique opportunity to grow your influence on this newest and shiniest platform. It’s also easy to use due to its simple premise. While investors use Instagram and TikTok to share videos and visuals, that takes content creation time. And while podcasting is another option to utilise to share information and build a following without the hassle of the visual component, it’s still labour intensive.
Clubhouse doesn’t need equipment, editing and polishing. Users aren’t creating a piece of content in the hope of gaining deals, followers and interest. They just need an iPhone (and soon an Android).
Either way, commercial real estate investors should absolutely be using some form of social media marketing. It’s one of the most powerful tools available, particularly in times of societal lockdown and confusion due to global events such as the pandemic.
Clubhouse is another step along the way of democratising real estate investment. For decades, it was essentially accessible to already rich and well-connected people. But Fintech and digital transformation are breaking these barriers, making commercial real estate a viable option for anyone with the acumen to take advantage of new opportunities.