Vienna, Va.-based Middleburg Communities and some individual investors have joined a $800,000 seed round for Connexus Living, which runs a procurement and request for proposal platform for real estate companies. Start-up founders and executives, including Demetrios Barnes (SmartRent and Umbrello) and Todd Butler (Sentral and Migo), were among the individual investors backing the Murrells Inlet, S.C., startup.
“Connexus is doing something unique in the industry by driving NOI [net operating income] through our service contracts, saving us money and giving our site teams back time in their day,” said Chris Finlay, CEO of Middleburg Communities.
Focus on Profitability
NOI is a key metric for profitability in the real estate industry. It determines the revenue and profitability of investment properties after taking into account necessary operating costs.
Founded in 2023, Connexus helps commercial real estate owners and managers centralize the RFP process, creating operational and financial efficiencies. With 200,000 units already on its platform, it plans to use the funds to bolster its capabilities and expand market reach.
“We are excited to be backed by thought leaders in the multifamily space. Their leadership and expertise will expedite our scale to market,” said Devin Wirt, co-founder and CEO of Connexus. Wirt’s co-founder, Melissa Wirt, is vice president VP of success at Connexus.
Devin Wirt said Connexus currently helps owners and operators save “north of 15% on their current contracts.”
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‘Build-to-rent’ Market Hotting Up
Middleburg Communities is among a clutch of companies targeting the so-called “build-to-rent” market. Build-to-rent housing, which consists of single-family houses leased to a sole tenant, has become an emerging area of growth, sparking billions in new investment.
“One of the biggest thoughts was we were looking at people just not being able to save up for a down payment, regardless of interest rates,” Aaron Tishkoff, assistant vice president of investments at Middleburg, told CoStar News earlier this year.
Tishkoff termed these homes as the “next best alternative” to people who can’t afford to buy a single-family home. According to CoStar, Middleburg has invested more than $500 million in its built-to-rent portfolio across Charlotte, N.C., Charleston, S.C., Jacksonville, Fla., and Wilmington, N.C. In February, it broke ground on a 260-unit in Midlothan, Va., outside Richmond.
