Hello, CRE World.
is back online.
Letter from HqO's CEO
Greetings friends of HqO. I'm Chase Garbarino, Co-founder and CEO of HqO, and I'm excited to reconnect with you. It's been a while since I have spoken with many of you - we've been quieter than usual since raising our Series D funding in the Fall of 2023, led by Koch Real Estate Investments.
The truth is that running a proptech company focused on CRE over the past several years has been a roller coaster. I know many of you have been on the same ride, so let's take a quick journey back in time…
2020
Lockdowns left buildings empty
2021
ZIRP made everyone believe we magically reversed human nature and remote was more productive than in person work
2022
With inflation and interest rates on the rise Tech lost over $7T in value
2023
Interests rates started to take their toll with US office investment down 62% of historical average
2024
Global investment in AI infrastructure surpasses $500B while CRE trades ticked up 15% as the freeze began to thaw
The same old CRE story
When evaluating the current CRE disruption we thought it helpful to compare the current cycle to cycles of the past.
What we found was that CRE is a story of disruption:
1880's - Railroads & The Industrial Boom
The emergence of railroads meant that, like today, industrial was all the rage. What happened in CRE was urban land use flipped - rail trumped river and industrial cities like Chicago were born. Buildings went from small-scale to large scale logistics hubs. Cities grew where the tracks led.
1930's - The Great Depression
The 1929 crash tanked CRE. Office vacancies hit 20%-30% in cities like NYC. Construction halted with an 80% drop in permits. This forced adaptive reuse - hotels became apartments, warehouses split for small tenants. Financing dried up and FDIC-backed loans were born.
1950's - Suburbanization & Highways
The Interstate Highway Act paved the nation and car ownership doubled. 50M Americans moved out of cities by the 1970s and suburbs exploded. Urban cores hollowed and malls and suburban office parks boomed, rewriting the CRE investment map.
1980's - Savings and Loan Crisis
High interest rates tanked 1k+ thrifts. Financing dried up - transaction volume dropped ~50% and construction loans vanished. With defaults spiking, financing was rebuilt with Developers and funds redefining who owned CRE with $100B+ flowing from private credit by the mid 90's.
The Internet has rewired, not replaced, CRE
A few decades into the internet era, here is what we know…
The internet
comes for every category and creates new ones
Data centers
are exploding, with $250B+ invested by 2024, growing 8% annually
Ecommerce rendered retail dead
until it drove top returns in 2024 with sales up $900M
People crave social connection
so retail got experiential
Now it's office's turn
while the workplace is untethered, work is still done best together
Just as retail reinvented
work is going experiential too
But there is a $500B AI wave hitting
and we believe it is going to drive the largest societal shift in history
Industrial Age Relics
Urban stagnation is real - 50% of urban building stock predates 1980 - and when discussing our industry's path forward, most of the focus is on interst rates...
While I understand the financial realities of the current situation, we need to re-underwrite more than just our financials.
The hard truth is that the Internet Age caught CRE off guard, reacting too slowly to the rise of ecommerce and digital work - adapting after the fact rather than shaping the change.
And it shows - most of our buildings and cities were built for the Industrial Age, not the Internet Age, let alone the AI Age.
Today, AI offers CRE a chance to pivot from follower to leader. Instead of waiting for AI to disrupt, CRE can proactively harness it to transform how spaces are designed, operated, and lived in.
Reactive approaches leave value on the table—missed efficiencies, outdated models, and lost competitive edge. Proactive adoption positions CRE at the forefront of innovation, ready to unlock unprecedented potential.
This shift tees up two critical imperatives for CRE in the AI age that we are focused on at HqO—working together and reimagining our built environment as the foundation for a new era.
This is where much of our focus has been over the past year, which has led us to rewire our company as we head into the AI age.
This has required us to reimagine every piece of our business, from org structure and job functions to data structure and architecture.
But it all starts with the why - our mission.
Pre-AI, whether through our own limitations or those of technology, our ambitions simply weren't big enough.
In 2025 and beyond, HqO's mission is to advance human civilization by creating the technology platform to power "Quantum Cities."
LET'S GO
Chase Garbarino, Co-founder and CEO, HqO
What should future cities look like?
The city has always been humanity's greatest technology - a platform for economic expansion, technological breakthroughs and cultural revolutions.
But our cities are built for the industrial age and not the AI age. And so far in the 21st century there has been too much focus on regulation and restriction rather than building for the future.
Cities must take a quantum leap in becoming intelligent, AI-powered systems that accelerate economic output, maximize idea exchange and enhance human freedom and prosperity.
Opportunity: Humanity's computing platform
Reimagining Cities for the AI Age
The "Quantum City"
What if the natural and physical laws that are on display in successful cities could be intelligently designed and engineered more consistently?
What if The Power Law of Cities could be measured and managed to by creating a high-performance urban system that functions as an autonomous computational network?
And what if every building, district, and economic cluster acts as a dynamic node, continually processing and exchanging data to optimize urban intelligence in real time?
These "Quantum Cities" would be able to unleash economic growth, technological innovation and civic and cultural prosperity.
What would it take to build "Quantum Cities"?
Answer: A movement.
Reimagining cities from the ground up for the AI age can't be achieved by a few of us. It's going to take a bit more than a village.
In the past, the US government and private sector worked together to put a man on the moon, electrify the nation, and build the internet.
Because of the importance cities play in the prosperity of our society, we believe it is matter of national and local importance that we now rally around transforming our cities for the AI age.
The Quantum City Initiative
Reimagining cities from the ground up for the AI age can't be achieved by a few of us. It's going to take a bit more than a village.
In the past, the US government and private sector worked together to put a man on the moon, electrify the nation, and build the internet.
Because of the importance cities play in the prosperity of our society, we believe it is matter of national importance that we now rally around transforming our cities for the AI age.
We are proud to announce:
The Quantum City Initiative.
Get Involved With The QCI
Join The Quantum City Consortium
CRE organizations can join our The QCI Consortium to be a part of:
- Help design The Quantum City framework
- Develop smart infrastructure roadmaps and policies
- Learn about the latest AI trends in and across CRE to apply to your portfolio
- Help craft and advocate for legislative action and support candidates adopting the QCI cause
- Partner with HqO to develop smart city solutions and digitize building infrastructure
Organize the power of your platform in one place.
Asset Management
Showing investors the power of your platform starts with organizing your platform in one place.
- Buildings
- Tenants
- Vendors
- Transactions
- Users
Working together all in one place
By leveraging HqO's Asset Management Platform, you will be laying the foundation to leverage AI to generate better reports and insights for your investors and key stakeholders.
Facilitate the full tenant journey all in one place.
From move-in to expansion, a great tenant experience starts here.
- Tenant onboarding
- User management
- Access provisioning
- Resource booking
- Event Management
- Ticketing
- Visitor management
Working together all in one place
By leveraging HqO's Experience Manager.
HqO: Your Single Source of Truth for Commercial Real Estate
Unify property operations, tenant engagement, financial transactions, and vendor management in one centralized platform — empowering Asset Managers and Property Teams to maximize asset value and drive portfolio performance.
- Foster Tenant Loyalty – Create exceptional experiences that drive retention.
- Simplify Operations – Centralize data and automate workflows for asset efficiency.
- Power Strategic Decisions – Gain real-time insights to optimize portfolio value.
The HqO Real Estate Experience Platform
Insights from the top
Leesman has periodically polled senior real estate leaders about their visions for 'people and place' since 2021.
Leesman's latest poll in December 2024:
The main question explored in this poll was:
What are the top priorities for organisations moving forward, and their strategies for tackling them?
Size of organizations represented in the poll
Corporate Real Estate Leaders, N=132 (Q4 2024)
The hybrid landscape
- Employee perceptions of work and the workplace have changed forever.
- Around 88% of knowledge workers work in a hybrid way.
- Organizations are shifting towards more structured hybrid working models.
- This shift serves as a solution to balance employee preferences with business needs.
Where do your employees currently work?
Corporate Real Estate Leaders, N=132 (Q4 2024)Corporate Real Estate Leaders, N=132 (Q4 2024)
Organizations are defining their 'Workplace why?'
- The average home supports the average knowledge worker better than the average office.
- Noise and distractions are the office's greatest threat
- In a hybrid world, success isn't about office attendance but the quality of the experience.
- Organizations must deeply understand employees' office experiences to improve them.
- Organizations should define clear workplace purposes that align with employee needs.
The HqO Insider