Fifth Wall's new Flagship Fund, Plus CBRE's Industrious Acquisition

The latest in real estate technology

January 17, 2025

Before we jump in, as a firm proudly founded in Los Angeles, we are deeply concerned and saddened by the devastation caused by the ongoing fires in Los Angeles. Our thoughts and prayers are with everyone affected and the many who have lost loved ones, homes, and businesses or have been displaced or otherwise impacted. We encourage those impacted or at risk to follow updates on the fires on Watch Duty and to join us in donating to the CA Fire Foundation.

FIFTH WALL LAUNCHES NEW FUND, STRATEGIC INVESTORS

Yesterday, we announced the launch of our latest Flagship Fund.

Along with this fund, we're excited to welcome brand-new LP commitments from Lowe's, Public Storage, Ryman Hospitality Properties, Federal Realty Investment Trust, Kite Realty Group, TITAN Group, Independence Realty Trust, Riyadh Valley Co., Sidara, and many others, in addition to several other prominent institutional investors.

You can read more about the new fund and our firm’s 2024 highlights in The Real Deal, Commerical Observer, BisNow, Inman, and the full press release on PR Newswire.

CBRE ACQUIRES INDUSTRIOUS

Big news in PropTech and for us at Fifth Wall this week: CBRE, one of our first investors and the world's largest commercial real estate services and investment firms, acquired Industrious, one of our earliest investments.

CBRE increased its stake in the company to 100% at a valuation of $800 million based on accelerating growth, sound execution, and thoughtful partnerships. Jamie Hodari, who the Wall Street Journal dubbed the “anti-Adam Neumann,” will join CBRE’s leadership team to lead its building operating businesses.

In a reaction post on LinkedIn the day the news broke, Fifth Wall CEO & CIO Brendan Wallace wrote, “Industrious wasn't always the obvious winner. When Fifth Wall invested in 2018, the flex office space was dominated by WeWork, backed by nearly every major VC and institutional investor. Betting on Industrious at the time was a contrarian move—one that proved prescient. Industrious pioneered a management model more aligned with landlords, reminiscent of hotel management, and that approach reshaped the industry.”

We’re excited for the entire Industrious team, impressed by CBRE’s vision and commitment, and pleased to share this update with our LPs and community.

MASSIVE OPPORTUNITIES IN…PARKING?!

Thanks to our portfolio company, Neighbor, the nation’s leading marketplace for monthly parking and self-storage, we have lots of insights to offer today regarding opportunities in multifamily parking. We led Neighbor’s $53M Series B round in 2021; they were overperforming then and still are four years later. Hence, we’re excited to cover Neighbor’s latest report on multifamily parking intelligence. Read on for our takeaways and download the report, produced by Neighbor’s Parking Research Team, Ralph Johnson, and Joseph Woodbury.

1. Leaving money on the table, nay, pavement

In the wake of flashy AI innovations and enhanced focus on energy transition work domestically, developments in the parking industry can easily slip under our radars. But parking is no afterthought in the world of real estate. Parking revenue (among other ancillary income channels) can represent up to 10% of a REIT's total revenue. Building on that idea, the crux of Neighbor’s new report focuses on the realization that—whether with respect to optimizing pricing or getting creative about attracting new customer cohorts—multifamily property owners often miss opportunities to boost net operating income (NOI) from parking.

Neighbor’s research shows that owners of an average 50+ unit property in Miami are leaving close to $200k on the proverbial pavement, on average. Market rates are also more than 150% higher than multifamily rates across the ten major U.S. markets the report covers. This is even more surprising when you consider active market headwinds for the multifamily space new multifamily permits are down ~16% YTD (based on NAHB data).

2. The tl;dr on the ‘why’

The next question we imagine you, the astute readers, will be wondering is some version of “Why?” Why is parking, of all things, an under-tapped revenue stream? Here are a few key reasons Neighbor identified, as well as strategies for multifamily owners to adjust and adapt accordingly:

The price is too damn low: Resident and multifamily parking is often underpriced (and often by a lot), with the two notable market exceptions being New York City and Washington, D.C.

You’re more powerful than you think: Asset managers and owners sometimes have more pricing power than they realize, based on how much money they miss out on in multifamily parking settings.

Keep it local while minding your market: Optimizing parking pricing can increase NOI and overall property valuations, provided that property owners adjust prices strategically. Best practices for parking pricing optimization are executed with r...