Net Lease Software Provider Fyxt Gains $4M in Series-A Round
Company plans to focus on the roll-out of its products to manage net lease properties.
Fyxt, which offers software for managing net-lease properties, recently closed a Series-A funding round for $4million. Leading the round on the investor side was RET Ventures, along with the UK-based family office Reuben Brothers.
Started in 2017, the company “provides a full suite of integrated software solutions specifically tailored to optimize the management of ‘essential assets’ across logistics/industrial, healthcare, retail, and other historically net-lease environments.”
The base concept is that landlords running net-lease properties have a problem: They depend on things happening and getting paid for by tenants.
“Under net leases — in which tenants commit to the bulk of property upkeep and renovations — owners and property managers suffer from both a lack of visibility into building maintenance and frequent confusion about which party is responsible for specific repairs,” the company’s release explains.
Essentially, the net-lease approach is a way landlords outsource responsibilities to tenants. It may reduce financial responsibilities and improve profits in theory, but there’s an increase in risk should a tenant not keep things in good repair and otherwise fulfill its obligations.
The problem began to show up before the pandemic got into full swing. “Landlords are starting to get calls from Walgreens and others, saying, ‘Hey, Amazon is really killing us,” Noah Shaffer, senior director of asset management for Confidant Asset Management, told GlobeSt.com in January 2020. “’We’re going to need a 25% rent reduction.’ And those landlords, who thought this was a passive investment for 15 years, aren’t prepared to make a decision on something presented by the corporate tenant. So, as a result, they make poor decisions about their investment asset.”
Some retailers didn’t bother to negotiate; they just closed their doors and left the responsibilities with the landlords and investors. Or there is the in between realm of problems like difficulty collecting insurance and property taxes or deferred maintenance.
The Fyxt platform integrates with “accounting, data visualization, vendor compliance, and insurance software.” Fyxt also has “an expense management platform for NNN tenants as well as a marketplace of pre-approved vendors to simplify vendor procurement for property managers and tenants alike.”
Greater visibility isn’t a cure-all. A tenant could still act irresponsibly and leave the property owner with some series of headaches. What a platform might offer, however, is a way to receive warnings of developing issues before they progress to a point of no return.