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Justin Fichelson and Michael Martin envisioned residential real estate differently.
That’s why they founded tech-forward luxury brokerage Avenue 8, applying a technology startup mentality with a proprietary mobile solution, salaried marketing employees, technology staff and even an editorial director.
Under Fichelson’s headshot on the company website, it reads: “As an agent, I was frustrated with the way brokerages operated. Avenue 8 is my way of changing that.” He backed up that thought onstage at Inman Luxury Connect in Las Vegas during A New Wave of Luxury Buyers: Business Models and Trends to Watch.
During a panel discussion that included Martin as well as Marnie Blanco, vice president of industry relations for luxury second-home platform Pacaso, Fichelson said the entire business world is changing.
“We’re in this tectonic shift right now, where we have traditional brokerage models that are being consumed or merging with other companies,” he said. “And we have this influx of new brokerage models coming out, and the pandemic massively accelerated that change.”
Fichelson and Martin launched Avenue 8 in March 2020, at what is considered the start of the COVID-19 pandemic, essentially on the cusp of measurable global change in business as well as in luxury real estate.
“Luxury has changed,” Fichelson said. “The idea used to be a massive estate. Luxury is now having another place to go on the weekend or multiple small places.”
His business partner agreed, saying that they’ve found customers who have a different relationship with assets.
“We understand the sophistication of the millennial real estate consumer,” Martin said. “Their relationships are multi-faceted.”
The group agreed that luxury, collectively, means something different today, and that includes fractional ownership. Pacaso’s model was born from a shift in what people wanted in a luxury home.
Blanco told the audience that Pacaso’s model overlaps with two kinds of buyers: those who can afford a $10 million investment but won’t use it much, and those who can afford the ongoing experience but not necessarily tackle the entire financial commitment.
“We don’t believe an empty house is a good house,” Blanco said.
However, for Pacaso, it’s about more than the benefits or pride of having a luxury vacation home — it wants to change the process.
“The big thing is having a turn-key experience,” she said. “It’s the ongoing experience of not having to worry about the full management of the home, not worrying about the expenses or fees because those are all handled through Pacaso. Not having to figure out cleaning or maintenance or when you’re going to stay.”
Pacaso recently announced it will accept multiple forms of cryptocurrency, an adjustment in its transaction model that accommodates the rapidly rising — and at times sporadic — digital currency trends. Potential buyers asked about it, and the company listened.
The group also discussed the idea that to alter luxury buying for the better, brokerages need to help agents provide for their clients.
Avenue 8’s Martin told Luxury Connect attendees they believe that if a brokerage isn’t allowing agents to build success their own way, then it’s likely not the best brand under which to grow a business. He referenced the online, mail-to-order eyeglasses company Warby Parker when suggesting how agents need to treat clients.
But, he cautioned, brokerages need to be onboard, too.
“It’s important that whatever brokerage you choose that you’re appreciated and that you’re having fun,” he said. “It has to reflect how you navigate the world. We built a team to support that.”
The company also provides its agents with software that can scale with however they want to work. “When agents are working at their best, everyone wins.” Martin said.
Avenue 8 didn’t focus its software offering on the novelty of providing agent technology. It wasn’t trend-driven lip service or merely to compete with the increasing supply of in-house technology. It was rooted in meeting customer demands.
“The power of the brokerage in the agent’s pocket,” he said. “Not necessarily on the phone but on the go. Luxury is about service; we’re enabling that.”
Craig C. Rowe started in commercial real estate at the dawn of the dot-com boom, helping an array of commercial real estate companies fortify their online presence and analyze internal software decisions. He now helps agents with technology decisions and marketing through reviewing software and tech for Inman.