SOLON, OH—The saying goes that you're known by the company you keep. In the case of MRI Software, among the oldest commercial property technology firms if not the first of its kind, the company it now keeps is among more than 100 software investments made by TA Associates over the years. The Boston-based private equity firm recently selected MRI—founded in 1971, just three years after Peter Brooke launched TA—for its initial foray into real estate software.
“Traditionally, real estate has been a laggard in technology compared to some other industries,” says Patrick Ghilani, CEO of Solon, OH-based MRI. “Here in 2017, that space is maturing with innovation, players, desire and focus from a global perspective.”
Aside from its financial health and track record of both organic and inorganic growth, what attracted TA to MRI was “the fact that we are differentiated in the space, based on the way we go to market with our product and our platform,” Ghilani says. “We are a significantly more open and configurable platform than the largest players in the market, and that, coupled with an almost 50-year legacy of people and service to space, gives us a pretty substantial platform to take those macro financials longer and with a higher trajectory going forward.”
At TA, managing director Hythem El-Nazer cites the size of the real estate software market as one of the reasons his firm opted to enter the space. “It's estimated at $10 billion when you look at both commercial and residential,” he tells GlobeSt.com. “And as we tried to understand the market, our diligence and our research kept pointing to MRI.
“The company has made significant investments in the product over the past five or six years, and has clearly been a beneficiary of the strong tailwinds in the market,” El-Nazer continues. “We kept hearing that not only from their clients but also from prospects and other industry participants. We wanted to back one of the market leaders, and MRI is a clear market leader. Our goal is really to accelerate growth; our investment was intended to help them continue to invest in product, people and partnerships. MRI has a very strong footprint in North America; our goal is to help them accelerate their growth internationally.”
El-Nazer will join MRI Software's board when TA's strategic investment in the software provider closes, as will TA managing director Jason Werlin. GI Partners, which has owned MRI since 2015, will continue to hold a stake in the company.
TA isn't planning to use its MRI Software investment as a launching pad for significant stakes in other real estate tech firms. “If there are areas that are not a focus for MRI, we can evaluate those,” says El-Nazer. “But we view MRI as our platform. This is the horse that we're backing in the real estate software market.”
Much of MRI's recent focus has been on the investment management side of commercial real estate. When it comes to the adoption of technology, “The investment management space is probably a little more immature than the property management space,” Ghilani says. MRI's suite of investment management software products stems in part from two acquisitions, Cougar Software in 2015 and Integratec last year, as well as organic product development, and Ghilani asserts that it's “the most comprehensive platform under one roof.”
SOLON, OH—The saying goes that you're known by the company you keep. In the case of MRI Software, among the oldest commercial property technology firms if not the first of its kind, the company it now keeps is among more than 100 software investments made by TA Associates over the years. The Boston-based private equity firm recently selected MRI—founded in 1971, just three years after Peter Brooke launched TA—for its initial foray into real estate software.
“Traditionally, real estate has been a laggard in technology compared to some other industries,” says Patrick Ghilani, CEO of Solon, OH-based MRI. “Here in 2017, that space is maturing with innovation, players, desire and focus from a global perspective.”
Aside from its financial health and track record of both organic and inorganic growth, what attracted TA to MRI was “the fact that we are differentiated in the space, based on the way we go to market with our product and our platform,” Ghilani says. “We are a significantly more open and configurable platform than the largest players in the market, and that, coupled with an almost 50-year legacy of people and service to space, gives us a pretty substantial platform to take those macro financials longer and with a higher trajectory going forward.”
At TA, managing director Hythem El-Nazer cites the size of the real estate software market as one of the reasons his firm opted to enter the space. “It's estimated at $10 billion when you look at both commercial and residential,” he tells GlobeSt.com. “And as we tried to understand the market, our diligence and our research kept pointing to MRI.
“The company has made significant investments in the product over the past five or six years, and has clearly been a beneficiary of the strong tailwinds in the market,” El-Nazer continues. “We kept hearing that not only from their clients but also from prospects and other industry participants. We wanted to back one of the market leaders, and MRI is a clear market leader. Our goal is really to accelerate growth; our investment was intended to help them continue to invest in product, people and partnerships. MRI has a very strong footprint in North America; our goal is to help them accelerate their growth internationally.”
El-Nazer will join MRI Software's board when TA's strategic investment in the software provider closes, as will TA managing director Jason Werlin. GI Partners, which has owned MRI since 2015, will continue to hold a stake in the company.
TA isn't planning to use its MRI Software investment as a launching pad for significant stakes in other real estate tech firms. “If there are areas that are not a focus for MRI, we can evaluate those,” says El-Nazer. “But we view MRI as our platform. This is the horse that we're backing in the real estate software market.”
Much of MRI's recent focus has been on the investment management side of commercial real estate. When it comes to the adoption of technology, “The investment management space is probably a little more immature than the property management space,” Ghilani says. MRI's suite of investment management software products stems in part from two acquisitions, Cougar Software in 2015 and Integratec last year, as well as organic product development, and Ghilani asserts that it's “the most comprehensive platform under one roof.”
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
