This story originally appeared on Real Estate News.

Redfin is cutting ties with the industry’s top trade organization.

Early Monday morning, Redfin published an announcement signed by CEO Glenn Kelman and other top executives indicating that the Seattle-based brokerage would be leaving the National Association of Realtors. 

In the note, Kelman cited two primary reasons for the decision: an NAR policy that mandates a fee for the buyer’s agent on every listing and allegations of sexual harassment at the highest levels of the organization. 

Despite the ongoing commission lawsuits and growing outcry against NAR, Redfin leadership said this wasn’t an impulse decision. 

“We’ve had many meetings with NAR execs to explore compromises on the policies that would let us continue our support,” Redfin leaders wrote, adding that the company has paid over $13 million in NAR dues since 2017. 

Mantill Williams, VP of public relations and communications at NAR, told Real Estate News through a prepared comment that the organization respects Redfin’s decision but stands by its policies. “Redfin told us in June they were planning to separate from NAR, and we respect their choice to do so,” Williams said.

“The U.S. model of local MLS broker marketplaces has long been — and still is — considered the best value in the world. NAR stands by its pro-consumer, pro-competitive guidance for affiliated local broker marketplaces that ensure equity, efficiency, transparency and market-driven pricing options for home buyers and sellers,” Williams added.

Redfin, which reported having over 2,400 full-time lead agents at the end of 2022, will go further than simply discourage NAR membership — Redfin will require many of its agents to “leave NAR everywhere we can,” the note read. Kelman and team also added that the company had left the NAR board back in June, well before the explosive New York Times investigation into the organization’s ongoing allegations of misconduct.

Kelman, known for his candor and straightforward language, goes even further, saying that “NAR isn’t the future.”

“Our disagreement is with NAR, not with our industry,” the note says. “We love our industry. We’ve tried to love NAR. But enough is enough.”

A jury determined that Zillow did not make deceptive changes to the way it displays non-MLS listings, a significant victory for the company.

The Real Estate Exchange (REX) sued Zillow and the National Association of Realtors over what it says were deceptive practices to conceal non-MLS listings on Zillow’s heavily trafficked website. REX was a low-commission brokerage that ceased operations in May 2022.

In a trial in U.S. District Court in Seattle, a jury decided Sept. 29 that REX did not prove Zillow used false advertising in its decision to put non-MLS listings on a different section of the website. The jury also said Zillow proved its defense on a second claim about unfair or deceptive acts.

“We’re pleased with today’s victory and are ready to move on and focus on what matters: helping customers who come to Zillow get into their next home,” said Will Lemke, corporate communications manager for the company, in an email.

NAR was dropped from the case after U.S. District Judge Thomas Zilly ruled in August that REX Homes’ antitrust claim was without merit, effectively removing NAR as a party to the case. The case continued as Judge Zilly allowed REX’s claims that included unfair/deceptive trade practices.

The case was filed in March 2021, and in the original complaint, REX claims its business was damaged when non-MLS listings on Zillow were relegated to a secondary search results tab, limiting traffic to those listings.

Zillow had modified its site in January 2021 after it began using the Internet Data Exchange (IDX) feed that handles MLS listings. Zillow said it made the change in order to comply with NAR guidelines, specifically its co-mingling policy.

REX launched in 2015, with the goal of transforming the real estate industry to “push past the outmoded practices of traditional real estate brokers to provide a superior outcome for both buyers and sellers at one-third the cost,” its website claimed.

At the time the lawsuit was filed, REX was a licensed broker active in 19 states. Instead of marketing homes through the MLS, the company used digital technology to market directly to consumers, “using data modeling and machine learning to ‘match sellers and buyers of homes as accurately and speedily as possible on Zillow, Google, Facebook, and other channels,'” according to the court filing. 

REX claimed its model reduced the total commission paid to 3.3% on average, well below the national brokerage rate of around 5.5%. It also estimated that in a five-year period, the company saved consumers more than $29 million in commissions.

Seattle-based real estate startup Flyhomes this week announced it plans to acquire certain assets from Home Sale Assured, a Chicago-area company that helps homeowners move into a new home without needing to sell their current home.

• Founded last year by real estate lending veteran Eric Meadow, Home Sale Assured aims to make it easier for lenders to approve new home loans before the close of a sale on a previous home. Flyhomes offers a similar product called Buy Before You Sell.
• Home Sale Assured is a brand operating within Innovative Holdings, LLC. Flyhomes will acquire the brand, and Meadow is joining Flyhomes as vice president of partnerships.
• Flyhomes, known for its service that helps home-buyers secure purchases with all-cash offers, went through its third round of layoffs earlier this summer amid a slow real estate market. Flyhomes acquired host-to-own platform Loftium in February.

Zillow Group revenue rose slightly to $506 million in the second quarter, well ahead of its prior guidance of $451 million to $479 million for the three months ended June 30, the company reported Wednesday afternoon.

But despite exceeding Wall Street’s expectations and outperforming the overall market, the Seattle-based real estate services and media company continued to feel the effects of higher mortgage rates and a challenging housing market.

• Residential revenue, including Premier Agent advertising services for real estate agents, declined by 3% from a year ago to $380 million for the quarter.
• Mortgages revenue fell 17% to $24 million, which the company attributed to higher mortgage rates impacting demand and its mortgage marketplace.
• Traffic to Zillow Group’s websites and apps slipped 3% to 226 million average monthly unique visitors, with 2.7 billion visits, down 8% from a year ago.

One bright spot: rental revenues rose 28% to $91 million for the quarter, which the company attributed to strong traffic and growth in multifamily properties.

Looking ahead, Zillow Group said in its second-quarter letter to shareholders that its current revenue outlook for the third quarter is $458 million to $486 million. That’s below the average analyst estimate of $488.1 million for the upcoming quarter. Shares fell 2% in after-hours trading, after the earnings report.

Lead by serial entrepreneur Rich Barton as CEO, Zillow Group has been remaking itself since exiting the “iBuyer” home-flipping business in 2021 to focus on core businesses including real estate listings, home loans, and real estate agent advertising. Its brands include Zillow.com, Trulia, StreetEasy and HotPads.

“I’m pleased with our steady progress on improving and integrating our customer and partner experiences, especially in touring, financing, and renting,” Barton said in a statement. “The housing super app is coming into focus, opening up significant transaction TAM [Total Addressable Market] for the company and our shareholders.”

On the bottom line for the second quarter, Zillow Group posted a net loss of $35 million, vs. a profit of $8 million in the same quarter a year ago, as calculated using Generally Accepted Accounting Principles (GAAP).

However, on a non-GAAP basis, adjusted for share-based compensation and other factors, earnings per share were 42 cents, significantly ahead of Wall Street expectations of 18 cents per share, as reported by Yahoo Finance.

Overall revenue of $506 million compared with expectations of $471.6 million.

Seattle-based real estate technology company Zillow is leveraging artificial intelligence to create more immersive listings designed to stand out from the pack and help a home sell faster.

The company’s new “Listing Showcase” experience comes from ShowingTime+, a brand under the Zillow Group banner, and relies heavily on photography features and interactive floor plans to bolster online home listing viewing.

Some of the highlights include:

• Immersive interactive floor plan to allows buyers to fully understand a home layout.
• Seamless toggle between photos, the interactive floor plan and a virtual tour. 
• Highlighted floor plan overlay to connect the photos to their location in the home.
• Media grouped by room for easy navigation.
• Self-rotating high-res photo carousel.

To build the Showcase listings, AI is used to select so-called “hero images.” Trulia, another Zillow brand, explained what hero images are and why they matter in this previous blog post. The images in Showcase listings are based on buyer preferences, and they are connected to corresponding rooms in the interactive floor plan or room-by-room displays.

Zillow said in a Tuesday news release that the experience will improve as new functionality and AI-enabled features become available in the coming months. For example, listing agents will soon be able to select from AI-generated insights on which home facts and features matter most to home shoppers, to highlight those features in a listing.

“As soon as shoppers land on a Showcase listing, they’ll be virtually transported into the home, giving them a deep understanding of the home’s flow, architecture and design — all before visiting in person,” said Mike Lane, vice president of ShowingTime+, in a statement.

The first iteration of Listing Showcase is available in Atlanta, Chicago, Los Angeles, San Diego and Seattle. The offering will be sold by subscription and be available to a select number of listing agents in each market.

In its latest quarterly earnings report in May, Zillow beat estimates for Q1 revenue as it continues to deal with a slumping housing market. Since abandoning its big bet on iBuying, Zillow has shifted its focus to building a “housing super app” that addresses various aspect of real estate including buying, selling, and renting.

“Our goal is to increase engagement, customer transactions, and revenue per customer transaction by investing across five growth pillars: touring, financing, seller solutions, enhancing our partner network, and integrating our services,” CEO Rich Barton wrote in a shareholders letter at the time.

The News: Seattle startup Picket Homes raised $20 million to boost development of its platform that helps investors analyze, purchase and manage single-family rental properties.

The Product: Picket Homes’ platform features more than 50 million US single-family properties in 25 rental markets. Using machine-trained models and data, it helps investors sift through real estate property listings. The platform provides reports that forecast sale/rental values, expenses, cash flow, and long-term asset appreciation. It also facilitates transactions.

When investors purchase a property, their assets move to Picket’s property management system. The platform offers digital leasing, smart home tech, online bill pay and maintenance requests. It also provides access to a service team and mobile app for residents.

Leadership: The company was launched in 2019 by co-founder and CEO Quinten “Q” Shay. He previously served as the co-CEO of Ador, the well-funded Seattle e-commerce startup originally known as Lockerz, which was acquired by Chinese holding company LightInTheBox in 2014. Shay also held leadership positions in Amazon’s international and tech teams, working for more than six years with the e-commerce giant.

Shay is joined by co-founder and president Henchman LeMaistre, who launched tech-focused property management firm Elara, and co-founder and CPO Charlie Mullan, who helped launch influencer affiliate marketing startup Spangle. Picket has more than 100 employees.

Funders: The Series B financing round was led by LL Funds. It included participation from RET Ventures, which led Picket’s Series A round in 2022. The company did not disclose its total funding to date.

Traction: Picket facilitated more than $270 million in single-family rental home investments last year, primarily with institutional customers. The company said it plans to expand by targeting individual investors.

Picket said purchases on the platform have been concentrated in the Southeast. However, the company added that it’s “rapidly expanding” in the Southwest, Midwest, and Northeast. 

The startup generates revenue through its software platform and brokerage and property management services. It said its investor pool has “grown rapidly” in the last 18 months, and its tech and property management services serve “thousands of residents.”

Pushback: Real estate investing companies have faced criticism in the past. Critics argue their business models help investors gobble up the limited amount of available housing, driving up costs and outbidding first-time home buyers.

Asked about these concerns, a spokesperson pointed to data released last week from John Burns Research and Consulting that shows the cost disparity between owning and renting has risen to an average of $1,030 per month, compared to $884 a year ago. The spokesperson added that its broader mission is to help renters have better rental experiences, driven by its resident mobile app and services team.

“When people want or need to rent a home, we want them to have more and better options,” the company said in an email. “We believe that only by facilitating the acquisition and management of rental properties at scale can we have a meaningful influence over the quality of supply.”

Competition: Several real estate investing startups focus on single-family homes. Seattle-based Havium sells a platform for identifying and managing rental properties, while Arrived Homes allows investors to purchase fractional shares of rental properties.

Real estate market: Picket’s funding comes as higher interest rates have weakened investor appetite for buying homes. Investors purchased nearly 49% fewer properties in the first quarter of 2023 than the year-ago period, according to a report by Redfin. The share of single-family home purchases dropped to 67.3% of investor purchases, the lowest share in the past six years, the report found.

There are also fewer homes for sale. The US housing market was short 6.5 million homes between 2012 to 2022, CNN Business reported. As of April, the monthly supply of homes on the market would last 7.6 months if no new houses were built, according to Federal Reserve data.

The share of U.S. homebuyers making all-cash purchases hit a decade-high in April, with one-third of buyers bypassing mortgage loan options, according to a Redfin report released Wednesday.

All-cash purchases accounted for 33% of home purchases in April, up from 30% a year earlier, Redfin found.

Redfin analyzed county records across 40 of the most populous U.S. metros through 2011. It defines an all-cash purchase as a transaction without any mortgage loan information on the deed.

All-cash offers were most common in Cleveland, West Palm Beach, and Baltimore. They were least common in April in Seattle and the Bay Area — expensive West Coast metro areas. In Seattle, 18.6% of homes were bought with all-cash offers, compared to 65.7% in Cleveland.

Redfin said all-cash purchasers are grabbing a larger chunk of homes because rates deter mortgage-dependent buyers more than all-cash buyers.

In early June, the 30-year fixed mortgage rate stood at 6.79%, approaching its highest level in 15 years.

Costlier mortgages discourage homeowners with fixed rates from selling their homes and prevents many would-be homebuyers from entering the market.

The typical U.S. homebuyer down payment was $52,500 in April, down 18% from a year prior, Redfin found. Down payments have been declining on a year-over-year basis since November due to three reasons, according to Redfin: “less competition among homebuyers, high mortgage rates and declining home prices.”

Redfin Senior Economist Sheharyar Bokhari said homebuyers who are in the position to make an all-cash offer face two choices: they can pay in cash to avoid hefty monthly interest payments, or get a loan and invest the extra cash in assets that return enough to offset the higher fees.

He added that homebuyers who cannot afford to make an all-cash offer have two choices: they can drop out of the housing market altogether, or accept the pricier mortgage rate.

In an already sluggish housing market, the rising trend toward cash payments could further weaken demand for startups selling mortgage products.

Seattle-based mortgage startup Tomo, which raised $110 million, laid off 44 employees last year as a result of higher interest rates. New York-based digital mortgage lender Better has also struggled.

Zillow Group’s mortgage business saw revenue decline 43% to $26 million in the first quarter.

After predicting that the sluggish housing market had started to rebound in January, Redfin this week blamed real estate market conditions as part of the reason for its latest round of layoffs.

The Seattle real estate company downsized on Tuesday by 201 employees, or about 4% of its workforce, marking its third round of cuts in less than a year.

The layoffs come despite the company’s declaration at the beginning of the year that the housing market had begun to recover. “We’re not out of the woods yet, but homebuyers are coming off the sidelines,” Redfin deputy chief economist Taylor Marr wrote. He cited increases in the number of users requesting tours and contacting agents to start the home-buying process.

Redfin CEO Glenn Kelman said during the company’s first quarter earnings that tour scheduling, a “leading indicator” of market trends, was on the rise. Tour requests experienced a year-over-year decline of 40% in November, whereas in January and February, the decline was around the 20% range.

After the market “bottomed out” in November, when mortgage rates were over 7%, buyer demand started to return when rates eased, Alina Ptaszynski, a Redfin senior communications manager, told GeekWire on Thursday. But as the year goes on, buyers are struggling to find homes because rate-locked sellers are holding back and constraining transaction volume, she added.

“At that time, we also acknowledged then that we weren’t out of the woods yet and the market was still touch and go,” Ptaszynski said. “We stand by that and continue to track and report on the market weekly.”

The company has consistently cited lagging supply as a key factor in declining home sales. In a report released Thursday, Redfin data journalist Dana Anderson wrote: “People are reluctant to sell because they don’t want to give up their low mortgage rate, it’s hard to find another home to buy and many Americans recently moved.”

For eight consecutive months, new listings of U.S. homes for sale have been declining at double-digit rates, with a 25% drop from the same period last year in the four weeks ended April 9, the report found.

Stubborn inflation, high interest rates, and a crisis in confidence in the banking system are also keeping many would-be buyers and sellers sidelined, the spokesperson noted.

Thirty-year fixed mortgage rates dropped to 6.3% in the period ended April 7. That was the fifth consecutive weekly decline and the lowest levels reached in two months. The rates are still higher than pandemic lows, when rates dropped to the 3% range.

Redfin said last year that it expected the market in 2023 to contract 30% from 2021 during its third quarter earnings announcement. That expectation has not changed and the company believes that sales could remain sluggish into 2024, Ptaszynski said.

Other forecasters have reported conflicting predictions for home values in 2023. Zillow economists predict a 0.5% increase in home prices between January 2023 and January 2024. Meanwhile, economists at Moody’s Analytics expect prices to drop 4.2% between December 2022 and December 2023.

Redfin has already made a series of cost-cutting measures in response to its predictions of a declining housing market. The company said last November that it would wind down its home-flipping program RedfinNow and eliminate 862 positions, or 13% of its workforce. That came after an 8% workforce reduction last June.

Redfin revenue fell 25% in the fourth quarter. The company also reported a net loss of $61.9 million, compared to $27 million in the year-ago quarter.

Housing market conditions have not been uniform in various geographies. Some local markets are performing even weaker than national numbers, leaving excess staffing in those areas, Ptaszynski said.

“That being said, there are some markets that are doing better than the national numbers, but we need to staff appropriately and respond to economic conditions,” Ptaszynski said.

Redfin laid off 201 employees, or about 4% of its workforce, on Tuesday as it continues to trim expenses in response to the housing downturn and ongoing economic uncertainty.

A company spokesperson confirmed the cuts to GeekWire on Wednesday. This is the third time in less than a year the Seattle real estate company has conducted a workforce reduction.

“While another layoff is painful, especially for those leaving the company, Redfin must continue to adapt to the current economic climate,” the spokesperson said in a statement.

Redfin said last November that it would wind down its home-flipping program RedfinNow and eliminate 862 positions, or 13% of its workforce. That came after an 8% workforce reduction last June.

Redfin revenue fell 25% in the fourth quarter after mortgage rates and a sluggish market kept many buyers and sellers on the sidelines. The company also reported a net loss of $61.9 million, compared to $27 million in the year-ago quarter.

The layoffs come despite Redfin’s statement in January that the housing market had begun to recover. That report cited increases in the number of users requesting tours and contacting agents to start the home-buying process.

The most recent round of cuts will mostly affect workers in the real estate support segment. Laid off employees will receive 10-15 weeks of severance depending on tenure and healthcare coverage for three months, according to the spokesperson.

A number of real estate tech companies have laid off employees in Washington state over the last year in response to the market downturn including Zillow, Flyhomes, Compass, and others.

The University of Washington will move ahead with a building envisioned as a gateway into a reimagined part of its Seattle campus after prevailing in a lawsuit brought by a prominent developer.

Alexandria Real Estate Equities Inc. (ARE) filed three claims against the UW in Thurston County Superior Court in Olympia, Wash. Last Friday, Judge Carol Murphy sided with the university (see ruling below) in finding that ARE’s final claim “lacks standing as a disappointed bidder” in its quest to develop a building currently referred to as W27, which will house research centers in clean energy, medical science and more.

Pasadena, Calif.-based ARE, which has significant properties and investments in the Seattle region, participated in the request for quotation (RFQ) and request for proposal (RFP) processes and was one of two finalists for the project.

The UW chose Baltimore-based Wexford Science + Technology to develop the project. The two parties entered into lease contracts in which Wexford will design, finance, construct and maintain the new facility, and lease back roughly 100,000 square feet of space to the UW. Wexford has 17 “knowledge communities” in its development portfolio.

ARE first filed suit in June 2021, disputing the UW’s development RFP process. It also filed a request for a preliminary injunction that was dismissed by Murphy.

The judge concluded that the process for selecting a developer “was not arbitrary” and was “thoughtful, robust and ultimately fair.”

ARE has partnered with the UW going back to 1998, according to the court ruling.

“We absolutely intend to appeal,” said Joel Marcus, ARE executive chairman and founder, in an emailed statement to GeekWire on Wednesday.

The UW rejoiced at the closing of the ongoing dispute — which it referred to as a “nearly two-year effort by ARE to delay the project.”

“We feel buoyed by the court’s decision, which reinforces the legitimacy and professionalism of our selection process and clears the path for us to move ahead with this pivotal development,” Lou Cariello, UW’s vice president for facilities, said in a statement provided by the university. “At the same time, we are disappointed that ARE engaged in this legal approach, which has already resulted in significant costs to taxpayers in attorney fees, increased costs, and delays to the project.”

Update: The UW expressed disappointment Thursday in ARE’s plans to appeal the ruling.

“ARE has failed on all three claims and it is disappointing that ARE may appeal the Court’s clear and decisive decision and prolong this wasteful process,” UW spokesperson Victor Balta said. “ARE’s continuation of this effort is an affront to the taxpayers of the state of Washington and disruptive to the UW’s public mission.”

The UW envisions W27 as a gateway into what it’s calling Portage Bay Crossing, a neighborhood in the university’s west campus that will “merge education and student life with cutting-edge research, pioneering public/nonprofit institutions and private companies.”

The 340,000-square-foot, 11-story building will be located at 3919 University Way N.E.. The UW said it will be home to both academic and private research laboratories and offices, the Washington Clean Energy Testbeds, a rooftop solar panel testing area, the Institute for Protein Design and the Brotman Baty Institute. It will also house Connect Labs by Wexford Science + Technology.

Alexandria is a dominant player in life sciences real estate. Its buildings house operations for some of the Seattle area’s biggest biotech companies, including Seattle-based Sana Biotechnology and Bothell-based Seagen. ARE is developing a life sciences hub at Seattle’s almost three-acre Mercer Mega Block. 

The Puget Sound Business Journal reported that the firm’s 432-property North American portfolio totals nearly 41.5 million square feet and generates over $2 billion in annual revenue. In the Seattle area it owns 46 properties totaling 2.8 million square feet, generating $109 million in annual revenue, according to the Journal.

Thurston County Superior Co… by Kurt Schlosser

A new report commissioned by Challenge Seattle, a coalition of business and tech leaders, says more companies need to help finance and build affordable housing as part of a comprehensive solution to the state’s housing crisis.

Examples include private companies developing housing themselves, donating or discounting surplus land for non-profit developers or community land trusts, or providing below-market financing or grants to encourage new housing.

“Large private companies based in areas with high housing costs have an interest in their workforce’s housing availability and costs, and therefore have a strong reason to be part of the solution,” the report says.

That’s one of the takeaways from the 125-page report, “The Conspicuous Crisis: Addressing Housing Affordability in Washington,” released Thursday morning, produced by the Boston Consulting Group for Challenge Seattle.

It’s a follow-up to a widely cited BCG report in 2019 that laid the groundwork for Microsoft, Amazon, and others to commit hundreds of millions of dollars to finance affordable housing in the Seattle region. Apple, Google, and others have likewise launched their own commitments and initiatives in California.

The new report acknowledges those efforts, in addition to new state laws and local policies addressing housing affordability and homelessness.

However, the report says the problem is outpacing efforts to solve it, with a disproportionate impact on people of color, compounding the history of racial discrimination in home ownership.

“Given that these initiatives were all implemented recently, it is too early to definitively state their impacts on housing affordability,” writes Challenge Seattle in an introduction to the report. “But we do know that based on the magnitude of the crisis, these actions alone will not be sufficient to address the challenge we face.”

The new report expands on the 2019 study by taking a statewide approach — finding, for example, that nearly 1 million Washington state households spend more than 30% of household income on housing related costs.

Increasing the role of private companies is one of 19 recommendations in the report to boost the housing supply and make housing more affordable and accessible to middle- and low-income households.

But the biggest focus is on increasing residential density through zoning reform. The report notes, for example, that more than 90% of Mercer Island and more than 70% of Seattle and Bellevue are zoned for single-family homes.

“Zoning reform is the critical enabler for removing regulatory barriers standing in the way of the private market producing more housing units,” writes Challenge Seattle. “In the context of Washington, we would need to change zoning laws to allow for more density and re-zone more land for multi-family residential uses.”

Challenge Seattle is led by CEO Chris Gregoire, the former Washington state governor. Members include Microsoft CEO Satya Nadella, Expedia Group CEO Peter Kern, Puget Sound Energy CEO Mary Kipp, T-Mobile CEO Mike Sievert, Zillow Group CEO Rich Barton, and leaders of other companies across the region.

Read the full report here.

Newly released renderings show a building planned for the west campus of the University of Washington in Seattle that will be home to research centers in clean energy, medical science and more.

The project, previously announced in March and currently known as W27, is envisioned as a gateway into the recently named Portage Bay Crossing. The UW refers to this area as “a dynamic and interdisciplinary urban community” that will “merge education and student life with cutting-edge research, pioneering public/nonprofit institutions and private companies.”

The 340,000-square-foot, 11-story building will be located at 3919 University Way N.E.. The UW said it will be home to both academic and private research laboratories and offices, the Washington Clean Energy Testbeds, a rooftop solar panel testing area, the Institute for Protein Design and the Brotman Baty Institute. It will also house Connect Labs by Wexford Science + Technology, the developer on the project.

“The dynamic environment in this new space will unleash Washington students, faculty and companies to create home-grown technologies that can scale solutions to address the climate crisis,” Daniel Schwartz, director of the Clean Energy Institute and professor of chemical engineering, said in a statement.

The first two floors of the building are referred to as the understory, and will provide multiple indoor/outdoor amenity areas that are covered and shaded. The upper floors, 3 to 11, have a crenelated facade to both maximize views and decrease solar heat gain. Plans include a cascading open lobby and event space, public art, conference rooms and two restaurant spaces.

The site also includes green space with plazas, a mid-block crossing connecting University Way N.E. and Brooklyn Avenue N.E., large gathering areas, and improved Burke-Gilman Trail access and functionality, the UW said in a news release.

The design is nearly complete and currently being reviewed for permits by the City of Seattle. The name of the building will be announced in the coming months.

Zillow Group announced Thursday that it acquired Milwaukee, Wis.-based marketing service VRX Media, a move that broadens its suite of listing services it sells to agents and brokers.

VRX offers real estate-focused content such as aerial drone photography, virtual staging, 3D tours, and high-definition images. The company operates in more than 60 U.S. metros. It was founded in 2015 by former real estate agents Seth Green and Nathan Strom. VRX’s services will be released alongside Zillow’s other offerings in 2023.

Terms of the deal were not disclosed. The purchase marks Zillow’s 18th acquisition to date.

Zillow CEO Rich Barton wrote in his third quarter letter to shareholders that the company was bundling its real estate listing services under one umbrella brand called ShowingTime+. The company has been able to assemble the pieces for the suite of services through a series of acquisitions and in-house development. The new bundle includes:

• Dotloop, software that helps real estate brokerages manage documents digitally. (acquired in 2015)
• Bridge Interactive, a listing data management service. (acquired in 2016)
• ShowingTime, a software to facilitate home showings. (acquired in 2021)
• Rich Media Technology, an AI-generated floor plans and 3D home tours.
• VRX Media (2022)

“We expect the combination of ShowingTime+’s software capabilities and Zillow’s audience reach and proprietary technologies to allow us to access listing agent wallet share through both software and marketing spend, further broadening our reach within the addressable market we are going after,” Barton wrote in the shareholder letter.

Zillow has struggled amid the broader housing market downturn, with its stock down more than 43% since the start of the year. In a series of cost-cutting measures, the company confirmed in October that it laid off around 300 employees. It also said that it would tighten discretionary spend and reduce marketing costs.

The U.S. housing market continues to show signs of weakening, impacting Seattle real estate tech companies such as Zillow Group and Redfin. And the trend may continue.

“We think that the housing market could get worse,” Redfin CEO Glenn Kelman said during the company’s earnings call Wednesday. “We haven’t seen U.S. home sales dip below 4 million units a year in decades — and the U.S. population has grown.”

Redfin missed its third quarter earnings expectations and earlier Wednesday announced it would lay off employees for the second time this year, eliminating 862 positions, or 13% of its workforce.

The company also said it plans to shut down its home-flipping “iBuying” program RedfinNow.

The cost-cutting measures are a response to a broader housing market downturn due in part to rising inflation and mortgage rates. Single-family housing starts, which indicates the groundbreaking of a new home foundation, dropped nearly 19% in September. The amount of building permits allocated fell 17%. And existing-home sales are down nearly 24% from the same period last year.

“We plan to keep increasing our share of the market, but that market in 2023 is likely to be 30% smaller than it was in 2021,” Kelman wrote in a memo to employees Wednesday. “The June layoff was a response to our expectation that we’d sell fewer houses in 2022; this layoff assumes the downturn will last at least through 2023.”

Redfin axed 8% of its workforce in June. The company’s headcount has dropped 27% since April.

“Housing companies are in the jungle now, but Redfin has been there before and come out stronger,” Kelman said in a press release detailing the earnings.

The Seattle real estate giant reported revenue of $600.5 million through the three months ended Sept. 30 and a net loss per share of $0.83, which both narrowly missed analyst expectations of $603 million and $0.80, respectively.

Redfin stock fell more than 10% Wednesday but bounced back Thursday. Shares are down nearly 90% this year.

The decision to shut down the iBuying program eliminates Redfin’s largest liability and source of cash burn, RBC Capital Markets analyst Brad Erickson wrote on Wednesday. He added, “given the losses across the business and investors’ likely liquidity concerns with $300M of homes still on the balance sheet, it was a critically important decision.”

Redfin is one of a handful of real estate companies that invested heavily in iBuying to make real estate transactions more seamless. But it’s proving to be a difficult business, particularly with the market slowdown.

Zillow Group last year shut down its own iBuyer arm, Zillow Offers, resulting in a $405 million write-down and a 25% workforce reduction. Opendoor, the leading iBuying company, laid off 18% of its workforce earlier this month and reported a nearly $1 billion loss in the third quarter.

In the third quarter, Redfin sold 530 homes through RedfinNow, with an average sale price of $550,903. That accounted for nearly half of its total revenue during the period.

Redfin said it recorded an $18 million write-down related to RedfinNow for its third quarter earnings, “as a result of purchasing homes during 2022 at higher prices than RedfinNow’s current estimates of the values if we were to sell the homes as of September 30, 2022, net of selling costs.”

Redfin’s inventory value of its homes at the end of October was approximately $265 million, with another $92 million under contract to sell, filings show. The company expects to own less than $85 million in homes by the end of January, then completely rid its inventory of homes by the end of the second quarter of 2023. As a result of Redfin liquidating these houses, it will gain about $100 million in cash on its balance sheet, Kelman said.

“Laying off 862 colleagues and friends is heartbreaking,” Redfin CEO Glenn Kelman said in the earnings release. “But I feel relief about closing RedfinNow with relatively low losses.”

During the earnings call, Wedbush Securities analyst Jay McCanless was skeptical of Redfin’s plans to liquidate all of its homes before the third quarter of next year, citing Redfin’s “bearish” view of the overall housing market.

Redfin CFO Chris Nielsen responded by saying that the company is pricing the properties to be competitive to sell but at a price point that provides as much profit as possible.

“Hope is not a strategy here,” Nielsen added. “We’re not waiting for home prices to improve.”

Other highlights from Redfin’s third quarter financials include:

• Its net loss during the quarter was $90.2 million, compared to $18.9 million in the year-ago quarter.
• Mortgage revenue of $48 million was down from $53 million last quarter. However, the total attach rate of Redfin customers also getting a mortgage has grown to 17%, more than double that of last year.
• Website and app traffic rose 3% year-over-year to about 51 million average monthly users.
• Total market share rose to 0.8%, up two basis points from the year-ago period.

DoorDash, the food ordering and delivery company, is expanding its office footprint in Seattle two years after starting an engineering outpost in the city.

The company, which now employs about 600 people in Seattle and Washington state, has moved into a 30,440-square-foot space at the 2+U building at Second Avenue and University Street in downtown Seattle.

DoorDash first announced its plans to set up shop in Seattle in October 2020. The company has been working out of co-working space at 1201 Third Ave.

The new space includes communal workstations, conference rooms, phone booths, a parent’s room, a focus room, all hands space, and a modular room used for training and larger meetings, according to DoorDash.

The office is led by Director of Engineering David Azose, who previously spent three years with Uber in Seattle and more than nine years at Microsoft as a software developer and engineering manager.

“We’re thrilled to call Seattle and the Pacific Northwest home,” Azose said. “With the new expanded office, we hope to attract and welcome talented individuals who are looking to make an impact, while empowering local businesses in Seattle and beyond. Our Seattle hub continues to grow to support key business initiatives as we accelerate into new growth categories and innovate upon our core logistics platform.”

DoorDash is using a flexible work model for its corporate employees in the U.S., allowing teams to decide how best to leverage in-person and remote work.

The Seattle office market “continues to see high vacancy,” at 12.79% in the third quarter, according to a recent report from Kidder Mathews. The commercial real estate firm said future office demand “remains a big question,” adding that “all eyes will continue to be on job growth as well as the positioning of companies to repopulate their spaces which has been at lower density levels than pre-Covid with many employees continuing to work from home or adopt a hybrid model.”

New York-based real estate brokerage Compass has laid off 84 employees based in Washington state as part of a reduction that largely targets the company’s technology workforce.

In a filing with the U.S. Securities and Exchange Commission on Tuesday, Compass said a significant portion of its cuts in headcount would come from the company’s product and engineering team.

A Worker Adjustment and Retraining Notification from the Washington state Employment Security Department on Wednesday put the number at 271 workers, with 84 “local” and 187 “virtual.” A Compass spokesperson said “virtual” employees were remote or spread across the country, but have to be assigned a location, so the Compass system considers them Washington employees.

Amid a cooling U.S. housing market driven by increased mortgage rates, Compass previously stated in an Aug. 15 earnings call that it would be cutting costs in order to achieve profitability in 2023. Seattle-based Redfin also made cuts this summer, laying off 8% of its workforce to address to the housing downturn.

In an email to Compass agents on Tuesday, founder and CEO Robert Reffkin said the company was fortunate to be able to reduce costs while still investing more than any other company in the real estate industry.

“For example, the biggest reduction came from the technology team, however, our technology team is still over 700 people strong and likely larger than every traditional brokerage company’s tech team combined,” Reffkin wrote.

Founded in 2012, heavily funded Compass made a splash in 2019 when it cut the ribbon on a West Coast engineering hub in Seattle, right in Amazon’s backyard.

Reffkin said at the time that big companies like Amazon, Microsoft and the engineering hubs of Facebook and Google that are set up in Seattle drew Compass to the city.

“A lot of big companies have enough people that want to be part of transforming a new industry,” Reffkin said.

In March 2020, Compass laid off about 375 employees due to the onset of the COVID-19 pandemic. Seven months later, Compass acquired Modus, a Seattle startup that automated the title and escrow phase of closing on a home.

After raising more than $1.5 billion from investors, Compass raised another $450 million when it went public in April 2021. The company posted a loss of $494 million that year.

This past June, it shut down Modus, as it began its cost-cutting moves. The company laid off 450 workers, or 10% of its total workforce.

When it comes to co-working spaces in Seattle neighborhoods, Pioneer Square’s loss is Ballard’s gain.

The Pioneer Collective has moved its office and meeting space to the northern end of the city, taking 14,000 square feet in Ballard’s Tommer Building at 5101 14th Ave. NW. The building is in the heart of the neighborhood’s celebrated “Brewery District” and even sits above the Great Notion Brewing taproom.

Pioneer Collective was forced to move out of its flagship home of seven years in 2021 to make way for the development of the Railspur Hotel project in Pioneer Square. The company also operates locations in Belltown and Tacoma.

“Our customers have been asking us to open in North Seattle since 2015,” TPC co-founder Audrey Hoyt said in a news release. “It’s taken years to find the right opportunity, but we couldn’t be happier about where we landed.”

The company credits a “slow and steady strategy,” as well as a diverse product offering, with enabling it to survive tough times for co-working spaces during the COVID-19 pandemic. Revenue streams come from such things as monthly co-working memberships, private offices, meeting and offsite rentals, event space rentals, and mail processing services.

The pandemic was especially hard on co-working spaces. Among the Seattle area’s co-working casualties were Impact Hall, Atlas Networks, The Riveter, Hing Hay Coworks, Ballard Labs and Office Nomads. More than 800 co-working spaces permanently closed their doors nationwide, according to Upsuite, a flexible office space provider.

In August, the co-working space and coding bootcamp Galvanize closed its Seattle location, also in Pioneer Square, after seven years. WeWork closed a Ballard location during the pandemic in 2021 and then reopened the space last March.

The Pioneer Collective offers private one-person offices on up to nine-person offices, with prices starting at $875 a month. Memberships range from $145 for eight drop-ins a month to 24/7 access at $300 per month. More details are available here.

Arrived Homes, a Seattle-based startup that allows investors to buy shares of single-family homes, is adding short-term vacation rental properties to its investing platform.

“We’re thrilled to announce Vacation Rentals launching on Arrived,” the company said in an email to users Wednesday. “Vacation rentals are fully furnished homes that are leased for short-term stays (1-30 days) on platforms like Airbnb & VRBO.”

The company has already listed seven properties designated to be short-term vacation rentals. Investors can buy shares of these homes, which have names like “The Mirage,” which is located in Joshua Tree, Calif., and “The Ace” in Scottsdale, Ariz. These rental property assets total $5 million, the company said.

“Platforms like Airbnb have helped vacation rental owners generate over $150 billion dollars in rental income from serving 1 billion guest arrivals, and yet, less than 0.5% of these guests have been able to access the wealth-building potential of this rapidly growing asset class,” CEO and co-founder Ryan Frazier said in a statement. “We’re changing that today by adding these assets to our platform.”

Arrived has about 100,000 people signed up for its service, with about 10,000 users actively investing. On average, there are about 200-300 investors per house. The startup uses crowdfunding to help these investors purchase shares of rental properties for as little as $100, aiming to democratize real estate investing beyond wealthy individuals and institutional buyers. Investors on the platform can earn passive income while the company handles everything from property acquisition and management.

Investors on the platform have been eager to put their money toward short-term rentals. The Nashville-based vacation rental “The Oasis” sold out all of its shares on the first day of trading on Wednesday and was listed on the trending page on the Arrived website.

The startup aims to expand its offerings across both single-family rentals and vacation rental properties. It also plans to open in new markets such as Florida, Texas, Nevada and Indiana. However, it may face roadblocks as various jurisdictions are cracking down on short-term rentals by enforcing various zoning laws, such as the bill signed by Honolulu Mayor Rick Blangiardi that requires property owners to book their unit for a minimum of 90 days.

Real estate investing platforms, like Arrived, have faced criticism for gobbling up housing supply and driving up prices. The company previously defended its business model by saying that there is a demand for “quality rental housing” for individuals and families who may not have the financial means or incentive to purchase a home, adding that it does not bid on housing stock that would otherwise be owner-occupied.

The startup was founded in 2019 by a trio of tech vets including Frazier, CTO Kenny Cason and COO Alejandro Chouza. Its cap table features high-powered backers including the venture capital arms of Jeff Bezos and Marc Benioff, along with investments from former Zillow Group CEO Spencer Rascoff, and Uber CEO Dara Khosrowshahi, among others.

Arrived has a total inventory of 150 single-family rental properties in 27 markets across the country, totaling more than $55 million in total asset value.

As CEO of Seattle-based real estate company Redfin, Glenn Kelman knows plenty about the realities of the housing market in the United States. Now he knows the reality TV version.

Kelman is one of the buyers on “Buy My House,” a show designed to tap into viewers’ obsession with all things real estate and show what it looks like when homeowners try to sell their properties to industry professionals.

The first six episodes of “Buy My House” are now streaming on Netflix, and the show has been compared to the popular reality series “Shark Tank” — but for real estate. Kelman told GeekWire the show has less bite and is more like “Manatee Tank” for real estate.

“The other real estate entrepreneurs are all lovely, and the people pitching us were often in the middle of a messy, exciting, emotional transition in their lives,” he said. “They’d gotten sick or their kids left home or they’d run out of money or they were selling everything to go off on a big adventure.

“What we were evaluating wasn’t an off-the-wall idea to program pillows with an iPhone; it was someone’s home,” Kelman added. “It gave the show more heart.”

Kelman, who has led Redfin for 17 years, is joined on the show by fellow “tycoons” Brandon Copeland, an Atlanta Falcons linebacker; Corcoran Group President and CEO Pamela Liebman; and financial property specialist Danisha Wrighster. TV personality Nina Parker serves as host.

Each 30-minute episode features four pitches to the pros by homeowners from all over the U.S. Looking to make a deal on the spot, each homeowner tells the story behind why they are selling and weighs the offers from the investors.

Redfin was approached by a production company called Critical Content in 2019 when the company was putting together a pitch to sell the show to Amazon or Netflix. Kelman thinks he was chosen for his title as CEO, but he initially declined because he said he can’t even stand the sound of his own voice in a message. He changed his mind when he pictured a Redfin competitor taking the spot instead.

“Redfin still isn’t the most well-known name in real estate, so part of my job is to spread the word,” Kelman said. “Underdogs have to take more chances.”

A trailer for the series (above) calls Kelman a real estate mogul who is “changing the way America buys and sells homes with his revolutionary company, Redfin.”

In the first episode, titled “The Algorithm,” Kelman bids $730,000 on an Austin, Texas, couple’s home, and then raises his bid to $775,000 to secure the win. Liebman calls him a “shrewd deal maker” and says he’ll probably flip the house for $875,000.

Kelman said “seeing how the sausage was made” by a crew that came together from all over the world was the most interesting part of being on TV. In a series of tweets last week, he detailed more of his experience on the show and some behind-the-scenes nuggets.

Kelman said Redfin bought a bunch of houses on the show and sold them. He credited RedfinNow, the company’s direct home-buying business and the employees within that business with helping him look like a seasoned investor on the show.

Those employees supplied Kelman with data and local expertise about the neighborhoods where he and Redfin were buying homes. With his own money, he donated to a ministry and invested in a company that builds houses out of compressed earthen blocks.

“It would’ve made a better show if Redfin had bought more of the outlandish homes, a winery or a golfing complex, but the middle-class places with standard layouts are easier to price and trade,” Kelman wrote in his own recap of the experience.

Flyhomes is the latest tech startup to cut jobs.

The Seattle real estate company laid off approximately 20% of its staff, a spokesperson confirmed to GeekWire. The company did not provide an updated headcount. It has 763 employees, according to LinkedIn. One employee said 200 workers were let go.

Tech firms across various industries are laying off employees or freezing hiring as a way to curb expenses amid the current downturn. Rising interest rates are affecting U.S. home sales, which has forced real estate companies such as Flyhomes and others to trim headcount.

Flyhomes cited the impact of interest rate increases on demand for housing in a statement about its layoffs.

“To build the world’s best home buying and selling experience, we must operate in a manner that is both fiscally prudent and sustainable in the face of uncertain economic conditions,” the company said.

Redfin, another Seattle real estate company, laid off 8% of its workforce last month. Compass also cut jobs and shut down its Seattle-based title business.

Other Seattle-area tech startups including Convoy, Qumulo, and Esper have laid off employees in recent months. Google is freezing hiring for two weeks, The Information reported Wednesday.

Founded in 2016, Flyhomes helps people buy homes using a cash offer program which presents customers as the equivalent of cash buyers. A majority of the company’s revenue comes from agent commissions.

The startup also offers mortgage services and has a Buy Before You Sell program that helps sellers buy and move into their next home before selling their current property.

Flyhomes has helped customers buy nearly $3 billion worth of homes.

The company is led by CEO and co-founder Tushar Garg. It has raised more than $200 million to date, including a $150 million Series C round raised in June 2021. Investors include Norwest Venture Partners, Battery Ventures, Fifth Wall, Camber Creek, Balyasny Asset Management, Andreessen Horowitz, Canvas Partners, and former Zillow Group CEO Spencer Rascoff.

Offices in Seattle will remain partly empty until 2024. 

At least, that’s what commercial real estate company Broderick Group predicts in a market report for the second quarter of 2022, saying that economic pressures and the work-from-home movement will keep vacancy rates high in commercial spaces in the region throughout 2022 and 2023. 

In a previous market assessment, Broderick was optimistic that organizations and employees would return to the office, citing the easing of pandemic-induced restrictions and rising levels of vaccinations. However, “with the most significant and serious impacts of the pandemic behind us, the anticipated wave of migration back to the physical workplace has failed to materialize,” this quarter’s report notes.

According to the report, the overall Seattle direct vacancy rate was 13.84% for the second quarter of 2022, while the sublease vacancy was 4.67%. That’s a total rate of 18.5%, up from 14.5% from the first quarter of last year.

Many tech companies are debating their back-to-office plans. Many employees became used to remote work during the pandemic and are now balking at the idea of going back to the office. Long commute times and high gas prices are among reasons why they prefer to continue to work from home. 

While there has been a “notable bump” in occupancy during several days per week this year in Seattle’s offices — signaling at least some adoption of hybrid work — they are struggling to average beyond 40% occupancy, the report found. 

Prior to the pandemic, Broderick calculated there was roughly 5.5 million square feet of active tenant demand. But, in the second quarter of this year, it found that number decreased to about 2.2 million. 

Of that demand, tech is the biggest customer, accounting for 34% of total office space leased, or 3.2 million square feet. Other big players include medical, at 10.2% (973,000 square feet), followed by banking, insurance and real estate at 8.2% (786,000 square feet).

Despite diminishing demand for office space, the report notes that there were roughly 380,000 square feet of “significant leases” in Seattle in the quarter. It added that it is monitoring about 400,000 square feet worth of pending leases across the city that it expects to close by the end of the year. 

Many of these new leases were in high-quality buildings, specifically selected to lure employees back to the office.

“Employers are leveraging transit, building amenities, and quality of space as a tool to enhance the office experience and therefore accommodate employee needs as they return to the office,” the report says. 

According to the report, another reason for the slowdown in office space demand was a result of rising interest rates and inflationary pressures. These factors not only impacted the office space valuations but have also increased costs for companies.

Despite the slowdown, Seattle’s office space remains attractive. The report points to the leasing prices of the Madison Centre ($959.30 per square-foot) and 1101 Westlake ($985.64 per square-foot) as evidence that institutional investors remain bullish on the region. 

The report adds, “as our national economy begins to shift out of a recession, we believe Seattle will be amongst the first major markets to recover and realize pre-pandemic levels of growth.” 

A husband-and-wife duo and tech veteran are jumping into the crowded space of real estate investing with a startup that aims to simplify identifying and managing single-family rental properties.

The Seattle-based company called Havium provides two services: Its software component scours real estate offerings for lucrative investment opportunities in a select region, while its concierge service connects its clients with a property management company that will provide tenants and handle upkeep. 

“Imagine you could put on a pair of glasses and look at any property or look out over the entire state of Washington and only see the properties that make sense to buy as an investment,” said CEO and co-founder Jamie Nacht, who previously held a leadership role at J.P. Morgan. 

Nacht co-founded the company with Cristin Nacht, his wife, and their technical co-founder Arash Motamedi, who currently holds a leadership role at Microsoft.

The 5-year-old startup currently manages a portfolio of homes worth more than $16 million spread across various markets in the Pacific Northwest. The company has already generated nearly $2.7 million of wealth for its clients, according to its website.

Havium is gearing up to scale, gaining approval in both Idaho and Oregon to expand its operations. It aims to finance this growth and build out its suite of services by raising outside capital for the first time.

Because the company expedites the process of identifying and operating an investment-worthy property, it has also become an attractive option for those looking to participate in a 1031 exchange, where real estate investors have a limited time frame to swap one investment property for another to avoid paying capital gains tax. 

“Historically, people run around like crazy trying to find properties that can pencil correctly,” Jamie Nacht said. “People come to us beforehand and they say, ‘Hey, I’m going to sell this property and the day that it’s going to be sold is next Thursday.’ And then we just tell our system next Thursday is the first day that we’re allowed to buy property for this client.” 

Havium is going after a massive market. The company estimates that there are an average of 6.5 million single-family homes that are put on the market each year in the U.S. 

The startup makes its money in a variety of ways. It takes a commission at both the purchase and sale of client investments, charges one-time platform onboarding fees, and has recurring monthly revenue from each investment property in operation.

The company said it will be adding several additional revenue lines based on services its clients have been requesting.

So-called proptech, which includes real estate investing platforms such as Havium, has become a crowded space. Several related startups have sprung up, with each filling out their own niche. 

Arrived Homes, for example, allows users to crowdfund a micro real estate investment trust. Its focus is to lower the barrier-to-entry to that asset class for its users. Pacaso allows wealthy investors the chance to own a portion of a luxury house, ranging from 2-to-8 owners per property. And LEX, a New York-based investment company, announced it plans to take the SOLIS building in Seattle’s Capitol Hill neighborhood public. 

These proptech startups meanwhile have faced criticism for gobbling up a limited supply of homes, particularly in cities with high housing costs. Pacaso, for example, faced pushback in communities ranging from Napa Valley to Maui for allegedly driving up property values. 

Asked how Havium fits into this conversation, Jamie Nacht argued that the company operates in markets where investing in single-family homes does not affect the overall prices, such as the Pacific Northwest.

Rising interest rates have made purchasing a home harder for some would-be buyers. This, in turn, is creating more demand for rental property inventory. 

“If there are more people looking for rental housing — and if you own during that period — it’s better for you,” he added. “It’s countercyclical to the house prices.”

One way to describe Havium’s target client is to put them in the “high earner, not rich yet” category, or a so-called “H.E.N.R.Y.” This might be a tech worker with a large equity compensation package, or someone who was recently hired as a surgeon, among others.  

“They want to invest in real estate,” co-founder Cristin Nacht said. “But they don’t have the time or the desire to handle all of the stuff that goes along with it.”

Up until this point, the startup has bootstrapped its finances, relying only on word-of-mouth advertising to market its services. Cristin Nacht said this has allowed the company to refine how it operates, setting it up to be able to scale effectively into new markets.

Havium plans to use additional funding to fuel software development, hiring, expanding into new market geographies, and helping clients finance their property investments.

JetClosing, a 6-year-old Seattle startup that digitizes the home closing process for buyers, sellers, and realtors, is shutting down, GeekWire has learned.

The company is closing June 15, according to an email viewed by GeekWire that was sent from a JetClosing employee to a customer. In the email, the customer was encouraged to take their business to another title company.

GeekWire called JetClosing’s corporate phone number and reached a receptionist, who wasn’t able to provide comment when asked about the company’s shutdown. GeekWire has reached out to others at the company, and its investors, and will update when we hear back.

The company, founded in 2016, was one of the first spinouts of Seattle startup studio Pioneer Square Labs and was part of a growing trend in real estate to shift the homebuying experience online.

JetClosing used machine learning, cloud computing, and other technology to digitize the title and escrow process and eliminate loads of paperwork. Its competitors — incumbent title and escrow services — could do the same job, but JetClosing sold itself on being able to do it faster, cheaper, on mobile, and with more transparency.

The company charged a flat escrow fee to both sides for each transaction and made additional revenue on issuing owners and lenders title insurance policies. It also helped homeowners refinance.

The startup benefited from a strong U.S. real estate market as well as habits ushered in during the COVID-19 pandemic, where people relied more on digital tools to skip in-person meetings and complete home transactions from anywhere in the world.

However, JetClosing was also battling larger incumbent competitors and a recent cooling housing market affected by rising mortgage rates. Some high-tech mortgage startups such as Better and Blend have laid off staff this year.

Economic uncertainty is also causing tech startups across various industries to trim expenses and slow hiring. 

JetClosing is led by President and CEO Anna Collins, who took over for original co-founder and CEO Daniel Greenshields last year. Collins previously led Bulletproof, the lifestyle company with a brain-boosting coffee product, as president and COO. She spent about six years at Amazon, including as GM of Worldwide Prime Membership, and also held leadership roles at PhotoRocket, Microsoft, drugstore.com, and aQuantive.

Greenshields previously spent nearly 15 years helping run ShareBuilder, a company sold to Capital One (which later sold it to Etrade) that digitized and sped up the process of buying stocks, bonds, mutual funds, 401(K) plans, and more.

“It’s a very consumer friendly product. We specialize in drama-free closing,” Greenshields said about JetClosing during an episode of the “GeekWire Elevator Pitch” in 2018. He envisioned a “massive expansion opportunity” at the time.

JetClosing is licensed to operate in Arizona, Colorado, Nevada, Florida, Pennsylvania, Texas, and Washington. The company has offices in Seattle, Las Vegas, Phoenix, Austin and San Antonio, Texas.

The company raised $20 million in a Series A round in 2018 and was nominated for Startup of the Year at the GeekWire Awards that year. It closed an $11 million Series B round in March 2021 and had raised $44 million to date at that time.

The company’s investors included PSL Ventures, T. Rowe Price, Imagen Capital Partners, Trilogy Equity Partners, and Maveron.

A year ago, JetClosing employed about 80 people. The company now has 65 employees according to LinkedIn.

GeekWire Managing Editor Taylor Soper contributed to this report.

A federal jury in Texas this week sided with Redfin in a patent lawsuit brought two years ago by Surefield, a Seattle startup that was launched by Redfin co-founder David Eraker several years after his departure from the company.

The lawsuit involved technology for 3D online home tours, a feature that has taken on added importance over the past two years as the pandemic has made in-person tours more difficult in some cases.

The jury, in the U.S. District Court for the Western District of Texas, found unanimously that Surefield did not prove by a preponderance of the evidence that Redfin infringed on a total of 10 disputed claims across four Surefield patents. The jury also found that Redfin proved by clear and convincing evidence that those claims were invalid.

Surefield had alleged that Redfin and Matterport, its partner and provider of the feature, copied the appearance and underlying technology from Surefield, which was first to market.

Eraker said at the time of the suit that this allegedly unfair competition from Redfin hampered Surefield’s ability to raise VC funding, and forced his company to pivot to a different business model.

Redfin, a publicly traded high-tech real estate brokerage based in Seattle, denied that the 3D home tours on its site infringed on Surefield’s patents. In a court filing, Redfin also cited testimony from a Matterport executive who said that Redfin had no involvement in the technological direction and implementation of the feature.

In court filings, both Redfin and Matterport pointed to Google’s Street View Indoors technology as prior art as part of their efforts to invalidate the Surefield patents in dispute in the case.

Matterport filed a separate lawsuit against Surefield in federal court in Seattle this week, seeking to invalidate the patents, and asking for a declaratory judgment that Matterport doesn’t infringe on them.

We’ve contacted Eraker for comment on the Matterport lawsuit, and the jury verdict in the Redfin case.

Redfin said in a statement that it was gratified by the jury verdict and “happy to put this behind us.” The company recently settled a separate lawsuit filed in 2020 by the National Fair Housing Alliance and other organizations.

Related Documents

• Surefield’s May 2020 lawsuit against Redfin
• Jury verdict in U.S. District Court for the Western District of Texas
• Redfin filing outlining its case and seeking court judgment
• Matterport lawsuit against Surefield in U.S. District Court in Seattle

Seattle-based real estate company Redfin agreed to pay $4 million and implement a new internal monitoring system to settle a lawsuit that alleged its practices discriminated against communities of color.

The settlement, filed April 29 in U.S. District Court in Seattle, resolves a suit filed in 2020 by the National Fair Housing Alliance and other organizations. The suit focused on Redfin’s practice of setting a minimum home price in each market to determine whether it will offer its services for specific properties.

Under the settlement, Redfin will stop using home price thresholds when referring business to partners.

Redfin will continue using home price thresholds to determine whether its employee agents will offer services for specific homes. At the same time, it will implement a system to monitor and report on the impact of these thresholds on predominantly non-white communities, and take corrective action as needed.

NFHA wanted to “ensure that companies do not use their technologies, including digitally-based platforms, to deny people the housing opportunities and services they deserve,” said Lisa Rice, the group’s CEO and president, in a statement. “The steps Redfin has agreed to take are a positive move toward stamping out some of the nation’s most harmful practices, like redlining and appraisal bias.”

However, even with the settlement, Redfin says it’s incorrect to call its pricing thresholds redlining.

When the suit was filed, Redfin CEO Glenn Kelman said the company complied with the Fair Housing Act, using minimum price thresholds in an effort to ensure it could pay its employees a living wage.

“Throughout our history, we’ve made progress in broadening the price range of properties we could profitably sell, expanding from Seattle and San Francisco to cities across North America,” Kelman wrote at the time. “We’ve built a network of over 5,000 partners in an effort to serve customers for every home on our site, but our own agents still can’t make a decent living selling the lowest-priced homes.”

The company admitted no wrongdoing as part of the settlement.

“We do not make service determinations based on race or the demographics of the neighborhood,” a Redfin spokesperson said in a statement to Fast Company. “Home price is the only fair and objective way to make that determination because home price determines the fees we earn.”

Update: Here is Redfin’s full statement as provided to GeekWire:

“Redfin and NFHA both have long standing commitments to fair housing, and we’d rather spend money to advance fair housing rather than litigation. Our commitment to broadening the price range of the homes we can sell is why, every year, by design, we lose money selling low-priced homes. As part of the settlement, we will increase our investment in serving buyers interested in low-priced homes in communities that have historically been underserved by the real estate industry. Since we can’t afford to have our employees sell an unlimited number of homes at money-losing prices, Redfin will continue the general practice of using price to decide whether to serve a customer via a partner or an employee. Redfin hasn’t broken the law and we continue to stand behind our business practices. The settlement does not include an admission of liability. We recognize there is much to be done to make housing fair and to reverse decades of inequality and we will continue to do our part.”

Read the full text of the settlement.

Microsoft released a new video Wednesday that shows the latest progress on a multi-year redevelopment project reshaping a large swath of its headquarters in Redmond, Wash.

In an update on its website, the company said workers are close to finishing the first building on the new East Campus, a Thermal Energy Center that will use hundreds of deep wells for clean energy to heat and cool the new buildings.

Among other tidbits, Microsoft said it is modernizing the famed “Lake Bill” to better match its natural surroundings. The lake, which is really more of a pond, was named after co-founder Bill Gates, and it’s one of the few elements being preserved from the company’s original Redmond campus.

The company also provided new details about artwork planned for the new campus; an original Microsoft mouse that will be “concealed” in one of the buildings; and a series of new all-electric kitchens that will use induction cooking as part of the company’s larger environmental goals.

The project is taking place on 72 acres of Microsoft’s 500-acre Redmond campus, with 3 million square feet of space replacing the original Microsoft buildings on the Redmond campus.

The company moved to Redmond in 1986 from nearby Bellevue, where Microsoft was based for a period of time after Gates and Paul Allen relocated the company from Albuquerque, N.M.

Microsoft said in February that the first office building in the new campus was on track for occupancy in late 2023. Prior to the pandemic, the first buildings were expected to open in 2022 and 2023.

Knock has come knocking in the Seattle-area real estate market.

The company, which helps homebuyers compete with cash to sweeten offers in competitive markets, announced Tuesday that it is expanding to Seattle and other Western Washington locations.

Homeowners will have access to such products as “Knock Home Swap,” which provides 100% of the money necessary to buy a new home before listing a current house, and “Knock GO,” or guaranteed offer, which helps first-time buyers make an offer that’s competitive with cash.

Qualifying buyers can use Home Swap and GO for loans of up to $3 million. Knock also announced the addition of jumbo loans to its product portfolio, expanding the limit of qualifying Home Swap listings to $2 million in Seattle.

“Our innovative home loan solutions make all buyers competitive with cash buyers and eliminate the common pain points such as timing a sale with a purchase and living through repairs and showings that make it harder than it needs to buy and sell a home,” Knock co-founder and CEO Sean Black said in a news release.

New York and San Francisco-based Knock was launched in 2015 by the founders of Trulia, the online real estate company acquired by Zillow that same year for $2.5 billion.

The company announced $220 million in new funding in March and also reduced its workforce by 46%. The move came a year after Knock pursued going public via SPAC at a $2 billion valuation, but ran into the realities of COVID-19 and investor fears. Black wrote about it all in a March blog post, and made mention of the demise of the home buying business Zillow Offers and how Knock differs.

“On one hand, this proved Knock pioneered the superior alternative model,” Black said. “Knock does not buy houses from consumers at a discount like iBuyers, but rather we lend consumers 100% of the money they need to buy their new house and help them manage the entire process of buying and selling with their agent in our mobile apps. But investors needed a timeout to understand how the Zillow Offers news would ripple through the entire sector. Meanwhile, we continued to grow Knock across every metric that mattered to the business.”

Knock now operates in 75 markets in 15 states across the U.S. In Washington, it will be active in the Seattle-Tacoma-Bellevue, Bellingham, Mount Vernon-Anacortes, Bremerton-Silverdale-Port Orchard and Olympia-Lacey-Tumwater areas.

Not to be confused with the Seattle startup that builds apartment property management software, Knock does compete with Flyhomes, another Seattle startup that helps clients purchase houses directly with cash and raised a $150 million round last June.

Knock does not employ agents who buy or sell homes — users work with their own agent. Knock’s fees include a $1,700 origination fee and 1.25% convenience fee on the purchase price of the new home.

Flyhomes co-founder and CEO Tushar Garg told GeekWire that he welcomes Knock to the Seattle market.

“Our mission is to build the world’s best homebuying and selling experience, so the more the companies which offer consumers improved ways to buy and sell homes the better,” Garg said.

Redfin is best known for its home buying and selling services, but apartment rentals is an attractive slice of the home market that the Seattle company has not yet touched in a big way.

Redfin is also in the process of acquiring mortgage lender Bay Equity Home Loans for $135 million in cash and stock.

A new device unveiled by RealNetworks on Wednesday morning uses facial recognition to replace traditional key cards for access control at office buildings.

The product, called SAFR SCAN, will sell for $1,199 per access control point, significantly less than comparable products on the market, with more advanced and reliable facial recognition, according to the Seattle-based company.

It’s the latest expansion of RealNetworks’ SAFR facial recognition and computer vision technology, which launched in 2018 as a way to help schools improve security. SAFR later expanded to additional applications such as checking whether people are wearing facemasks properly.

SAFR SCAN is the first end-to-end hardware product developed from scratch by RealNetworks, best known for its pioneering work in streaming audio and video in the early days of the web. An earlier RealNetworks Mask Check kiosk used a proprietary stand with an off-the-shelf tablet.

Although RealNetworks continues to focus primarily on software, CEO Rob Glaser said he believes in “the magic of putting hardware and software together in ways that haven’t commercially scaled before.”

The canonical examples are Apple’s Macintosh and iPhone, and while building access control isn’t exactly on the level of computers and smartphones, the underlying concept is the same, Glaser said.

“History tells us that somebody has to do it first,” Glaser said. “Someone’s got to put the hardware and software together, make it all work … and then then over time, you might see the hardware abstracted from the software, once there’s a common form factor and an understanding of what it takes to build a high volume, highly successful product.”

SAFR is part of a larger effort by RealNetworks to leverage its experience in artificial intelligence and digital media to expand its business and return to overall growth.

RealNetworks attributed a $1.3 million increase in software license revenues in 2021 to sales of its SAFR product. However, revenue declined 12% to $23.8 million in the larger Mobile Services segment. Companywide revenue fell 14% to $58.2 million, with a net loss of $22 million on the year.

Its shares have declined steadily over the past year, currently trading at 62 cents. Last month, RealNetworks received a notice from the Nasdaq Stock Market for no longer meeting the requirement for a minimum bid price of at least $1 per share. It has until Aug. 17 to exceed the threshold for at least 10 consecutive business days or risk delisting.

Glaser, a former Microsoft executive, founded the company in 1994 and invested $10 million of his own money into RealNetworks in 2020 in a public display of confidence about the company’s direction. In an interview last week, he expressed optimism about the company’s expansion of the SAFR product line.

“If it turns out that we have success in this combination of hardware and software, as we think we will, I’m sure we’ll do more,” he said.

RealNetworks says SAFR SCAN works in a variety of lighting conditions, without the problems of bias that have plagued other facial recognition systems when used by people of color.

It includes anti-spoofing technology to prevent someone from using a picture or video of a face to trick the algorithm, said Brad Donaldson, RealNetworks vice president of computer vision, conducting a live demo of the SAFR SCAN system on a recent video call from the company’s office.

The system can also detect and notify system operators about incidents of tailgating, when multiple people attempt to go through a door using one person’s authorization, a common problem with key cards.

“It’s essentially an analytics security camera at your door, doing double-duty,” Donaldson said.

Alternative forms of access, such as QR codes on smartphones, will be available to employees who don’t want their faces scanned for later recognition by the system. Addressing privacy concerns, RealNetworks says all data in the system is encrypted and processed on the device, not in the cloud.

SAFR SCAN can integrate with existing access control systems, said John Cassise, a SAFR senior director of product management, a veteran of the access control industry who joined RealNetworks to work on the product last year. In addition, he noted, the system is made entirely in the U.S., avoiding security concerns about cameras and computer vision systems manufactured in China.

There is no subscription fee on top of the base price of the product in its initial configuration, although RealNetworks plans to add subscription products in the future that provide additional features and value, Glaser said.

RealNetworks compares SAFR SCAN to products from companies including Alcatraz, StoneLock, Suprema and Tascent, with prices ranging from $3,500 to $5,000. SAFR SCAN will be available starting in May in the U.S. through resellers and systems integrators.

Tomo, a startup founded by former Zillow execs that aims to speed up the mortgage approval process, raised a $40 million Series A round at a $640 million valuation, doubling the company’s value after it raised a $70 million seed round last year.

Founded in October 2020 by Greg Schwartz and Carey Armstrong, Tomo aims to be a “PayPal for the mortgage industry,” offering both underwritten pre-approvals and verified pre-approvals, which do not require a “hard credit inquiry” and can be completed in three hours.

The idea is to use data and software to accelerate the purchase process for new homes and help get buyers to a stronger position as they compete with other offers in a red-hot real estate market that has sparked intense bidding wars for homes.

Tomo now covers nearly a third of the U.S. market, recently launching in Michigan and Ohio. It faces competition from traditional mortgage providers and similar tech startups also aiming to digitize real estate processes and give buyers an edge. 

Some online mortgage companies such as Better are facing headwinds as interest rates rise. Tomo differentiates from some competitors as it does not offer refinance mortgages.

“This is a tough time for the housing market, and also for the world. But as we like to say, pressure makes diamonds,” Schwartz told GeekWire. “Even though it’s a hyper-competitive space, our focus on purchase mortgages positions us well.”

Schwartz, CEO, spent 13 years at Zillow, helping the Seattle company grow into a real estate database behemoth. He held titles including vice president of sales, chief revenue officer, chief business officer, and most recently president of Media & Marketplace when he left in January 2020.

Armstrong joined Zillow in 2013 and also held multiple leadership roles, including director of product management, head of corporate development, and vice president of the company’s Premier Agent business. She previously worked at Boston Consulting Group and Forrester. Armstrong is Tomo’s chief revenue officer.

Tomo has 150 employees across offices in Seattle, Austin, and Stamford, Conn.

SVB Capital led the round; Ribbit Capital, NFX, Zigg Capital, Parker89, Telesoft Partners, and 75 & Sunny Ventures (a firm led by former Zillow CEO Spencer Rascoff) participated.

It’s no secret that there’s a housing crisis in the Seattle area. Bidding wars abound. Rents are up nearly 30% over last year. And only New York and Los Angeles have higher rates of homelessness.

Seattle nonprofit Housing Connector is trying to level the playing field for the region’s most vulnerable renters — even in the face of escalating housing shortages and soaring costs of living. 

“There’s no denying that we have a shortage of housing,” said Shkëlqim Kelmendi, executive director at Housing Connector. “At its core, this is an issue of supply and demand. But even with that shortage, there are opportunities.” 

Kelmendi said existing inventory is one of those opportunities. Housing Connector acts as a matchmaker of sorts, connecting landlords looking to fill vacant units and would-be renters who might not have perfect rental records due to eviction, low credit scores, or other factors that can contribute to homelessness. 

But unlike most matchmakers, this arrangement doesn’t end after introductions are made. Housing Connector acts as an insurer for the next two years, backing those renters that might be seen as too high-risk otherwise.

“We can’t control the circumstances that lead us into homelessness,” said Kelmendi, who first observed how the housing market is stacked against vulnerable people as a child, when he immigrated from Kosovo to the U.S. as a refugee. “For folks to be defined by that one metric, whether it’s credit score or eviction, it’s incredibly demoralizing.” 

Housing Connector focuses on addressing four main business concerns for landlords and property managers: Keeping units full, ensuring reliable rent payments, mitigating the risk of property damage, and maintaining healthy and safe communities.

As part of its program, Housing Connector guarantees rent payment and promises $5,000 in damage insurance. The organization also works with community partners to provide conflict mitigation, behavioral support, and other social services for renters. The ultimate goal is to keep renters housed long-term.

Housing Connector has an ally in one Seattle-based tech powerhouse. The organization partnered with real estate giant Zillow to build and maintain the Zillow Affordable Housing Search Tool project. 

“Social issues like homelessness are nuanced, and require subject matter experts like our colleagues at Housing Connector,” wrote Zillow engineer Steven Kwan after the tool launched. “They had the expertise to do the work that we as a tech company can’t. This included building relationships and working with public offices, community partners, and property managers. We simply couldn’t replicate their experience.”

It’s one of many ways tech companies are stepping up to help alleviate the local housing crisis. Among many other efforts, a group of Seattle-area companies and philanthropies — including Microsoft, Amazon, Starbucks, and the Gates Foundation — recently announced they’ll put more than $10 million toward decreasing homelessness in Seattle.

But even with friends in high places, Housing Connector faced hurdles starting up — mainly COVID-19. The organization launched just as the pandemic was starting, and renters and landlords alike faced the monumental hurdles of lost wages and payments.

“We had two choices,” said Kelmendi. “It was either pivot and adapt, or die.”

The organization made the call to double down on services like mediation and social assistance, and property managers responded enthusiastically. Housing Connector saw a sharp spike of interest from property partners during the early days of the pandemic.

Since that time, Housing Connector has helped house more than 2,600 people, many in the Seattle area. The organization recently expanded into Pierce County as well as Denver — and Kelmendi said that’s still just the beginning of an ambitious plan to make housing more accessible all over the county. 

“From the start, we designed this product to be scaled,” he said. “Our goal and vision is that we’ll be in every major U.S. city in the next five to seven years.”

At the two-year mark, 70% of the people the organization has helped house are still living in those homes. Kelmendi said that metric is important, because finding someone housing is one thing. But keeping them housed takes a different set of solutions.

What do renters have to say? Kelmendi said the thing he hears about most often is complete surprise.

“This is the break they didn’t think they were going to get,” he said.

Entire buildings have taken shape in the heart of the campus since they’ve been gone. The company is now a few years into a redevelopment project that reimagines the huge swath of land where Bill Gates & Co. built Microsoft into a tech giant starting four decades ago.

The demolition of the company’s original Redmond buildings took place in 2019, so the existence of the massive construction site won’t be new, but the progress since then will give employees their first real glimpse of their future workplace.

There’s still plenty of space to work in the meantime. The project is taking place on 72 of the company’s 500 acres, and the company had already relocated workers to nearby offices prior to the onset of the pandemic.

Microsoft told GeekWire this week that the first building in the redevelopment is on track for occupancy in late 2023. Prior to the pandemic, the first buildings in the project were expected to open in 2022 and 2023.

The company announced last week that it would be fully reopening its Washington state facilities, including its Redmond headquarters, starting Feb. 28.

Employees will have 30 days from that date “to make adjustments to their routines and adopt the working preferences they’ve agreed upon with their managers,” wrote Chris Capossela, Microsoft’s chief marketing officer, in a post announcing the news.

With the updated policy, the company says its expectation is that “employees will spend at least 50% of their time in the office, working with their respective leaders on an appropriate schedule.”

Microsoft says it’s “constantly listening to understand what our employees need to be productive,” and plans to use data from employee surveys and building management systems (such as badge access points and conference room bookings) to understand and respond to new patterns in the way people work.

“My team has been designing and building spaces that can support hybrid work for years,” wrote Michael Ford, the company’s corporate vice president of global workplace services, in a LinkedIn post last fall.

He added, “While we have adapted our health and wellness standards to navigate the COVID-19 pandemic, our goal remains the same: take a research-driven approach to design our workplaces, grounding everything in our foundational design strategy of inclusivity.”

The redevelopment, on the east side of state Route 520, will ultimately include 17 new four- and five-story buildings, totaling about 3 million square feet. The new campus replaces the original “X-wing” structures and nearby buildings that totaled about 1 million square feet.

The southeastern portion of the project will include large playfields and open spaces. A bike and pedestrian bridge over state Route 520 will connect the northwest corner of the project to the future Sound Transit Link light rail station, which is now slated to open in 2023, and the company’s West Campus, home to its entertainment and devices teams.

Microsoft hired four different architects and general contractors for the job — designers LMN, NBBJ, WRNS Studio and ZGF Architects and contractors Skanska, Balfour Beatty, GLY and Sellen — and split the project into four sections that it describes in planning documents as “villages.”

Even as companies and employees continue to grapple with what the future of work will look like, and where that work will be performed, the technology sector has been gobbling up office space in the Seattle region and across the country.

Tech companies leased more than 2 million square feet of new space in the Seattle area in 2021, triple the amount of any other business sector, according to a new report from the commercial real estate firm CBRE. The industry accounted for 34% of total office space leased across the region, at 3.2 million square feet. That includes new leases, renewals and expansions.

The next closest sector was medical, at 10.2% (973,000 square feet), followed by banking, insurance and real estate at 8.2% (786,000 square feet).

Biotech had 419,000 square feet of office space in the region in 2021, or 4.4% of the total space.

Among office leases sized 50,000 square feet or greater across the Seattle region in 2021, 12 out of 22 were for tech companies, CBRE noted. There were 65 leases completed last year for tech companies and 21 for life sciences companies across the region, out of a total 473 office leases.

Five leases in the Seattle area totaled 1.5 million square feet, and helped Seattle rank sixth among markets with the largest 100 office leases in 2021. CBRE declined to identify which companies signed those leases, but tech giants such as Meta and Amazon grabbed more space recently.

Across the U.S., tech companies accounted for 36 of the top 100 office leases in 2021, up from 18 in 2020, for a total of 11.4 million square feet, CBRE reported. The next highest category was government and public administration at 5.1 million square feet.

The New York Times reported this week on big tech’s “big bet,” and how despite the fact that remote and hybrid work styles took root during the pandemic, “offices are still the future.”

“I think there are a lot more companies that are saying, ‘You’re coming back to work’ — it’s not ‘if,’ it’s ‘when,’” Hudson Pacific Properties real estate exec Victor Coleman told the newspaper. “The reality is that most companies are currently working from home but are wanting and planning to come back to the office.”

In a sign of confidence in the tech office market, Vulcan Real Estate sold the two-block, four building Google campus overlooking Seattle’s Lake Union for $802 million, a price of $1,260 per square foot that’s believed to set a new record for the city’s office market.

Last week, Microsoft and Expedia both announced the next phases in their office reopenings. Microsoft is fully reopening its Washington state facilities — including its Redmond headquarters — on Monday. Expedia said that beginning April 4, it expects employees to be in the office at least 50% of the time.

But while others followed big tech into a work-from-home mode at the start of the pandemic, the return could look very different for many tech companies, Washington Technology Industry Association CEO Michael Schutzler told GeekWire in a podcast discussion.

“The vast majority of [tech] companies are definitively declaring they’re hybrid,” Schutzler said.

Meanwhile, Seattle real estate giant Zillow says it’s attracting a larger and more diverse set of job applicants thanks to its nearly 2-year-old move to a more flexible work location strategy. The move has given the company a recruiting advantage against others that are increasingly requiring employees to spend at least part of their time back in the office, Zillow exec Meghan Reibstein said during another GeekWire Podcast episode.

Vulcan Real Estate sold the two-block, four building Google campus overlooking Seattle’s Lake Union for $802 million, a price of $1,260 per square foot that’s believed to set a new record for the city’s office market.

The sale to German investment firm Deka Immobilien reflects the unique nature of the property and the tenant, and confidence in the tech office market as the COVID-19 Omicron variant wanes. Google said this week that it’s relaxing its COVID restrictions, reinstituting perks, and preparing to bring workers back to the office at least three days a week.

Vulcan, the holding company for late Microsoft co-founder Paul Allen, announced the sale Wednesday afternoon with Newmark Group Inc., which marketed the property, known as Lakefront Blocks, and brokered the sale. The two blocks were marketed separately, they said, and Deka Immobilien was the winning bidder for each.

“The strong interest we received in the property is testament to the enduring quality of this institutional-grade investment,” said Ada Healey, Vulcan’s chief real estate officer, in a statement, calling the property “truly one of South Lake Union’s trophy assets.”

The complex spans two city blocks, each of which has two six-story office buildings. The total square footage is 635,000 square feet. The campus is on the northern edge of the South Lake Union neighborhood, between the water and Amazon’s campus, which was also developed by Vulcan.

The sale did not include the two apartment towers above the office buildings.

Lori Mason Curran, Vulcan real estate investment strategy director, said via phone Thursday morning that the prior Seattle office record was Vulcan’s 2019 sale of the nearby Arbor Blocks property, occupied by the company now known as Meta, for $1,069 per square foot. The Puget Sound Business Journal first reported on the new record.

Vulcan is developing a fifth building for Google, a 12-story high-rise at 520 Westlake Ave. N., southwest of the Lakefront Blocks, but completion of that project has been delayed by the concrete truckers strike.

Updated to correct spelling of Ada Healey’s last name.

Zillow Group knows a thing or two about homes, and during the past two years the Seattle-based online real estate company has emerged as a leader in enabling its employees to work from theirs — or from anywhere else they want.

As companies including Microsoft and Expedia make the transition back to the office, in some cases expecting employees to spend at least half of their time working in-person, Zillow Group has already been through its own transition to a completely flexible approach to work.

There are still plenty of challenges to work out in the company’s “Cloud HQ” model, including the tricky logistics of in-person and hybrid gatherings for a flexible workforce. But even through the difficult process of shutting down its Zillow Offers business, the company says its employees reported an increase in their ability to achieve work-life balance, thanks in part to their flexible work environment.

Zillow says it’s also attracting a larger and more diverse set of job applicants, giving the company a recruiting advantage against others that are increasingly requiring employees to spend at least part of their time back in the office.

“There are these signals that we’re on to something, and we invite everyone to come along with us on this journey, and embrace flexibility and enable that for people,” said Meghan Reibstein, Zillow’s vice president of project management and flexible work. But whether other companies ultimately join the movement or not, she said, “we’re carrying on.”

Reibstein isn’t just overseeing the flexible work experience — she’s living it. As she explained in a recent LinkedIn post, she and her husband moved from Seattle to Asheville, N.C., during the pandemic. They now live two doors down from her brother’s family, and three doors down from her mom.

She talked with us about Zillow’s flexible work approach and her own experience on this episode of the GeekWire Podcast. Listen above, and continue reading for excerpts from the discussion, edited for clarity and length.

Can you tell us about your job?

Meghan Reibstein: I have a blended role. I have a background in product management and consumer-facing product management. For the last couple of years, and continuing on into the future, given the way things have gone, I am at the helm of all things flexible work at Zillow, which has meant different things at different times throughout the journey.

What’s the difference, in your mind, between flexible and hybrid work?

Hybrid is kind of faux flexible in our minds. Our perspective was that hybrid represents this old-school way of thinking about it, where you’ve got to be in sometimes, and you can be out sometimes. Flexible is just meant to represent what you need as an employee. And we are going to build a culture that is flexible for your needs.

There’s this practice at Zillow called “core collaboration hours.” What are those? How do they work? And why do you have them?

Core collaboration hours, by definition, are from 10 a.m. to 2 p.m. Pacific time. The idea is that all of your group meetings are happening during those core collaboration hours, and that the rest of the time is for one-on-ones or asynchronous work. It doesn’t work out perfectly. We’ve got things happening outside of those hours, but the spirit of it was to empower people to take ownership of their schedules, and to try different ways of working.

What is the biggest challenge that the company has encountered, or that you’re hearing from employees, in terms of this flexible approach?

People are energized to gather, and that’s a byproduct of the fact that we haven’t been able to do that even in our personal lives for a long time. Figuring out the right way to do that is an interesting challenge.

• We are seeing the energy around this idea we introduced called a Z Retreat, people coming back together, and these informal gatherings of people saying, “Hey, why don’t we meet in the office for a day?”
• We took a risk early on and worked with NBBJ and renovated our office spaces.
• And then there’s this whole notion of the hybrid meeting. We have adopted this thing called “One Zoom, all Zoom,” OZAZ, in the spirit of, let’s not go back to a two-class system. And now we’re starting to work around the edges of that, and find the nuance and the gray area.

You embody this. You and your husband moved from Seattle, to Asheville, N.C, and you live two doors down from your brother’s family, three doors down from your mom. Tell us about that.

For me, it was the right move after working in the corporate world and having to be in these big cities, to be able to say, ‘Gosh, I’m going to take advantage of this and really embrace it and learn from it.’

It’s been two-fold: I want to put myself in the shoes of my customer. It was a secondary motivator, but an important one. I want to understand what this feels like. I want to know what the FOMO (fear of missing out) feels like. I was able to get some perspective. And I continue to get perspective from that.

What are Zillow’s policies and practices related to compensation for workers who move to less-costly markets?

We are committed to enabling people to move, and so very early on in the pandemic, we started to let people know, you can move without penalty. [In October], we formally announced our new policies and philosophy around compensation. We stuck with the original spirit, which is not penalizing people for moving. We went from a very city-based approach to a national approach. But the spirit of it was, you are going to be compensated for your performance, your scope of work, and these these things that you do, not where you choose to live.

As you look out, do you think that we’ll have two different models of working, one where employees at some companies are expected to be in the office, and another where employees are completely flexible?

I’m so curious to see what other companies do. I don’t know. What I can say is, Zillow is not transitioning. We transitioned a long time ago. We made a commitment very early on in the pandemic, and we have stuck with it. Even in the midst of shutting down a business in the fall, which we did, and which was hard, our employee responses on ability to achieve work-life balance went up to 80% of employees.

So there are these signals that we’re on to something, and we invite everyone to come along with us on this journey, and embrace flexibility, and enable that for people. But whether they do or don’t, we’re carrying on.