How a Real Estate Startup is Navigating the Record Summer Heat
Runwise co-founders (L-R) Jeff Carleton, Lee Hoffman, and Mike Cook. Courtesy of Runwise
A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors, and large public companies.
As brutally high temperatures bake the nation this summer, cooling is becoming increasingly critical across commercial real estate property portfolios. Landlords are balancing soaring demand with rising costs, putting energy efficiency front and center.
The trouble is that most large building systems essentially run blind. Temperatures are set centrally, so they don’t know if certain parts of the building are running too hot or too cold. That’s why so many office workers sit at their desks wearing sweaters in the summer and then feel overheated in the winter.
Now, new technology is taking on the challenge. Runwise, a New York-based technology company, invented its own hardware/software platform to eliminate overheating in large buildings. It recently expanded that to cooling.
“We’re trying to hit these climate goals, yet right in our literal building we’re throwing money away every time you run a boiler when it doesn’t need to run; you’re wasting money and producing carbon emissions unnecessarily that really make nobody comfortable,” said Jeff Carleton, co-founder and CEO of Runwise.
The Runwise desktop app. Courtesy of Runwise
The company combines future weather algorithms with a wireless temperature sensor network that communicates with the Runwise central control system. That control analyzes the data and operates the system more efficiently. For example, a 100,000-square-foot building may have just one boiler, but it needs multiple temperature inputs. Runwise would install 20 to 25 sensors, which take an average based on user settings and future weather, then determine how often to run the boiler.
The tech is now installed in more than 10,000 buildings across 10 states, with roughly 1,000 customers, including significant real estate owner-operators like Related, Equity Residential, FirstService Residential, MTA, Port Authority, National Grid, Rudin, LeFrak, UDR, Douglas Elliman, and Akam. Runwise claims to have collectively saved more than $100 million in energy costs to date.
The startup recently announced a $55 million Series B funding round led by Menlo Ventures, bringing its total funding to $79 million. Other backers include Nuveen Real Estate, Munich Re Ventures, MassMutual Ventures, Multiplier Capital, Soma Capital, and Fifth Wall.
Carleton stated that Runwise will use the additional funding to expand the business nationwide and integrate artificial intelligence into its systems. “It’s only going to become more and more ingrained in what we build, as we collect data from more buildings and develop more advanced models on how to run them more efficiently,” he said. “We plan to use AI to continuously enhance our algorithms.”
