In November, Jane and Andy Freeman received an unexpected letter in the mail.
A company called CityBldr reached out to notify them that their Shoreline, Wash., home might be worth a lot more than they thought. Intrigued, they gave the Seattle startup a call. They learned that CityBldr software flagged their property as one of a handful that could be sold together for a much higher price than individually. In other words, the whole could sell for considerably more than the sum of its parts.
Working with CityBldr, the Freemans and two other neighbors agreed to sell their properties collectively. With three committed, four additional homeowners signed on, too. This week, all seven homes will go on the market as one unit, targeting developers eager to build more housing inventory for the region’s booming population.
CityBldr zeroed in on the properties for a few key reasons. Combined, they would make plenty of space for a large housing development, they’re located across the street from the Light Rail station going in at 145th St., and the properties fall within a region that was rezoned from single-family to mixed-use residential housing last year.
According to Jane Freeman, her property has the potential to sell for $100-140 per square foot when purchased as part of the assemblage of homeowners. Individually, her 7,000-square-foot lot is currently estimated to be worth about $497,381. Sold on its own, the house would have gone for about $71 per square foot.
“At the lowest, we would be getting for our part of the assemblage a minimum of $700,000,” she said.
CityBldr has been working with about 50 groups of homeowners, like the Freemans and their neighbors, to help them sell their properties collectively. The Seattle startup charges a 6 percent fee for its services, comparable to what a traditional broker would charge. Homeowners can use the website to find out if their property is undervalued for free.
“We tell them what the best and highest use of their property is and what the value is to a builder or developer if their property is underutilized,” he said. “To builders and developers, their core competencies, we learned, weren’t sales and acquisition, they were actually building. They wanted to take these sites and improve them and build them and develop them to best and highest use. They didn’t want to have a tool built for them, to help them go find sites.”
Instead of doing their own scouting, CityBldr is providing that tool for developers and homeowners in the Seattle area and, as of last week, Los Angeles. Copley says the service will expand to 10 markets in the next six months.
To fuel that growth, CityBldr has raised a $1.6 million investment round, led by real estate developer SRM, which is known for building the Seattle Google Campus. A long list of additional investors participated in the over-subscribed round, including Start It Labs, Millenium Global, PWR Financial, Realogics Sotheby’s, and TUNE CEO Peter Hamilton.
Copley hopes CityBldr’s software can eventually be used to help address Seattle’s homelessness and housing affordability issues. CityBldr is working with a handful of Seattle non-profits to advance that agenda.
As for the Shoreline homeowners, CityBldr’s software predicts their parcel will be used to develop 220 units of multifamily housing. “CallisonRTKL is the architect that has drawn up the plans for the site and corroborated that the software’s yield study is accurate,” Copley said. “The site will attract both local and regional developers and builders as well as foreign investors.”
CityBldr, which launched in May of last year, has broader ambitions than helping homeowners upsell their properties. The company aims to help cities identify and understand underutilized land to make more efficient urban planning choices.
“CityBldr’s goal is to create smart cities,” Copley said when the startup launched. “We can use artificial intelligence paired with empathy and create happy, functional, sustainable communities.”