Here’s a new one in the proptech world: TSA PreCheck, but for renters. 

A new company called 100 raised $5.2M in a preseed round — 100 says it’s the largest preseed fund-raise ever for proptech — and is partnering with Clear, the airport security company, to launch the Verified Renter Network. 

The goal is to identify renters with minimal fraud and security risk and let those renters whiz through the apartment application process without the landlord having to do additional checks.

Rental fraud has been a growing problem for apartment owners, especially with the rise of TikTok, where renters share tips on how to forge documents to obtain units they can’t afford, skip out on rent and disappear before they’re caught. The CEO of Camden, one of the country’s largest multifamily owners, has had his identity stolen multiple times by people using his name and credit to rent apartments.

More than 70% of major apartment landlords saw an increase in fraudulent rental applications in 2023.

One thing that has allowed rental fraud to pay off so well for renters is the wave of eviction moratoriums enacted around the country during the peak of the coronavirus pandemic. Those policies significantly extended the timeline to evict nonpayers, and renters — both good and bad actors — have racked up huge amounts of rent debt that weighed on landlords. 

Moratoriums have largely been shut down by now, and rent delinquencies are starting to be worked through, but that isn’t the case everywhere.

Washington, D.C.’s affordable housing industry is in crisis as rent delinquencies are causing developers and operators to shut down. Last week the District enacted emergency legislation to unwind some of the pandemic-era policies that are delaying evictions and to provide funds to renters to pay off their rent debt.

— Mark F. Bonner, Kayla Carmicheal, Jay Rickey and Catie Dixon

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On Our Radar

• Could back-to-back hurricanes spark insurance chaos? First came Helene. Now comes Milton. There is precedent for that. One month after Hurricane Katrina hit Louisiana in 2005, Hurricane Rita also struck the state, triggering $6.8B in additional insurance claims. Combined Katrina-Rita losses totaled more than $50B and caused premiums to spike up to 50%. Insurers pulled back aggressively. This created a hard market, with reinsurance costs jumping 76% and commercial property premiums rising 40% in Louisiana and Texas. Many businesses toiled to secure coverage. That led to underinsurance and stalled redevelopment for years. That shift also drove a spike in demand for alternative risk financing and captive insurance solutions. Milton, now a Category 4 storm, is set to strike Florida on Wednesday.

• Small-business sentiment was still weak in September. The NFIB Small Business Optimism Index edged up to 91.5, remaining below the 50-year average for the 33rd straight month. Uncertainty hit a record high of 103. Capital outlays fell to 51%, and inventory gains dropped to their lowest since June 2020. Meanwhile, 34% of businesses reported unfilled job openings, and inflation remained the top concern for 23% of owners.

• REITs contributed $278B to the U.S. economy in 2023. A study by EY for Nareit also found that U.S. REITs generated 3.5 million full-time jobs last year. This includes 1.3 million jobs from REIT operations, 1.8 million jobs from construction and capital expenditures, and 431,000 jobs from dividend and interest payments. 

• Energy supply threatens Ireland’s data center dreams. Ireland’s low taxes and strategic location once made it a top EU destination for data centers, but it faces setbacks as energy supply constraints and regulatory roadblocks stall new projects. Government restrictions on data centers, which consumed 21% of Ireland’s electricity in 2023, are pushing tech giants like AWS to explore alternatives in Germany, Spain and the UK. 

This Morning’s News

INDUSTRIAL — Ares Splurges On Global Real Estate (FT): Ares Management is snapping up GLP’s international logistics assets for $3.7B, a major move to bolster its global real estate footprint. Learn more about the assets Ares scored.

DATA CENTERS — IPI Partners Weighing $1B Sale To Blue Owl Capital (Bisnow): Blue Owl Capital is in talks to buy IPI Partners, the parent company of data center firms Stack Infrastructure and RadiusDC. Learn more about the deal.

DATA CENTERS — Capex To Surge 40% By 2025, Says Citi (Seeking Alpha): Citi expects the big four cloud providers, Amazon, Google, Microsoft and Meta Platform, to increase data center spending by 40- to-50% year over year in 2025. These are the big four cloud companies Citi is eyeing.

Today’s Deep Dive: Office Owners Coming Around Slowly On Accommodating New Mothers, But Not Kids

Two days before Christmas in 2022, tucked into a $1.7T appropriations bill, Congress passed a law that requires large employers to provide a dedicated space for new mothers to nurse and pump breast milk at the office. 

President Joe Biden signed the Providing Urgent Maternal Protections for Nursing Mothers Act, or PUMP Act, into law just before New Year's.

Many owners of office space across the country missed the memo. Nearly two years later, adoption has been slow, even as more studies suggest providing resources to working mothers boosts employee retention and productivity.

Despite many office landlords spending recent years running a race to outdo the amenities of their competitors, that competition hasn't led to a hoped-for boom in childcare amenities, and even legally mandated nursing spaces are often an afterthought.

That’s a problem for the corporate return-to-office movement.

Read the full story here.

ENTERTAINMENT — Cineworld Seeks $1.8B Refinancing Deal (Bloomberg): The theater giant filed for Chapter 11 in 2022 to cut its debt and renegotiate its leases with U.S. landlords. The debt comes due in 2028.

RETAIL — Strip Malls See 18% Annual Traffic Surge (CNBC): Visits to the nation’s 68,000 strip malls jumped 18% last year. Retailers like Macy's are trying to get a piece of the pie, but strip malls are often criticized for being eyesores and hurting business districts. Learn why strip malls aren't struggling.

INDUSTRIAL — Former Amazon Exec Secures $100M For Logistics Startup (The Information): Dave Clark, former logistics Head at Amazon and CEO at logistics firm Flexport, has raised $100M for his new logistics venture. Here's what you need to know about the new company.

INSURANCE — Hurricanes Blow Holes In CRE Valuations (NYT): Escalating insurance costs from relentless storms are hammering commercial real estate. Insurance brokerage Marsh McLennan estimates premiums on commercial properties rose an average of 11% last year but as much as 50% in storm-vulnerable places. Landlords and developers are turning to lenders for help.

RETAIL — ECD Automotive Design Plans Retail Expansion (ECD): ECD will open new showrooms across the U.S. to enhance its presence in the custom-built luxury car market. Dig into the company's new retail strategy.

HOTELS — Marriott Expands City Express Brand (Seeking Alpha and CoStar): Marriott is set to introduce its midscale City Express brand to the U.S. and Canada, a move aimed at capturing more budget-conscious travelers. Get background about the new brand and see Marriott's other plays in midscale space.

CAPITAL MARKETS — Retail, Hospitality Insolvencies Could Surge In 2025 (Bisnow): Bankruptcies have spiked 35% YOY and 86% ahead of 2022 in Ireland, particularly in the retail and hotel sectors. One-quarter of all insolvencies this year were retail, as 162 such companies have gone out of business so far. Hospitality isn’t far behind, with 110 closures, 17% of the total. Dive into the state of the two sectors in Ireland.

ECONOMY — Fed Official Signals Optimism For Soft Landing (FT): New York Fed president John Williams expressed confidence that the U.S. economy is “well-positioned” to achieve a soft landing. Read the statement from Williams.

CONSTRUCTION — Cost Growth Slows To Lowest In 3 Years (RLB): The quarterly national average increase in construction cost was 1.07%, compared to 4.91% year-over-year. Get the annual changes by metro areas. 

ENTERTAINMENT — Oakland Asks Coliseum Site Developer To Pay 14% More (Bisnow): The city of Oakland has changed the terms of the deal to sell its half of the Oakland Coliseum to the African American Sports & Entertainment Group. It raised the purchase price of the former home of the Oakland A’s 14% to $125M and moved the deadline to pay the bulk of it up a month to May 30. Get into the details about the site.

DATA CENTERS — White House Eyes Nuclear Revival (Reuters): The U.S. is exploring reviving shuttered nuclear reactors to help meet demand for emissions-free electricity, according to a White House adviser. Two projects are already underway, including Three Mile Island in Pennsylvania. Find out more about the Three Mile Island project.

OFFICE — Embattled Tech Firm 2U Moves HQ To Crystal City As CEO Departs (Bisnow): 2U, an education tech company that emerged from Chapter 11 last month, has moved its headquarters from Maryland to Virginia. It used to occupy 309K SF in Lanham, Maryland but did not say the size of its new HQ in a JBG Smith-owned building near Amazon HQ2. Read more.

HOUSING — Homebuyer Sentiment Climbs To 2-Year High (CoStar): Confidence among U.S. homebuyers reached its highest point since 2022, but high prices are still keeping many buyers on the sidelines. Fannie Mae forecasts 5.7% mortgages by year's end.

RETAIL — Sam's Club Tests Checkout-Free Technology (CNBC): Walmart-owned Sam’s Club is trialing a ‘Scan & Go’ technology at new clubs with no checkout lanes. Store workers will instead have about four-times more space to fulfill e-commerce orders for curbside pickup or home delivery. Sam's Club plans to open 30 new clubs in the next few years. Online-only items will cover the stores' floor.

DEVELOPMENT — Construction Of World’s Tallest Skyscraper Resumes (CNN): Work on the 3,280-foot-tall Jeddah Tower in Saudi Arabia, set to be the tallest skyscraper globally, has restarted nearly seven years after work stopped amid an anti-corruption purge. Read more here.

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The First Draft is produced by Director of Newsletters Jay Rickey, Managing Editor Catie Dixon, Editor-in-Chief Mark F. Bonner and Deputy Newsletter Editor Kayla Carmicheal, with an assist from ChatGPT. We’d love your feedback! Email us at firstdraft@bisnow.com.