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Affordable housing developer Fairstead plans $100M in proptech investments

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Fairstead, a real estate development firm specializing in affordable housing, is planning $100 million in proptech investments into startups developing technology it can use within its portfolio.

Fairstead Ventures, its investment arm, will focus on early-stage startup funding that can help its residents, including through offering new broadband options, and make its buildings more sustainable.

Headquartered in Midtown, Fairstead owns just under 6,800 apartment units in New York as part of a national portfolio of more than 16,500 units. The company in December teamed up with Invesco Real Estate to purchase roughly 2,000 affordable housing units across 48 buildings in the Bronx in a deal valued around $350 million, Crain’s reported at the time.

The new $100 million fund is part of a $500 million capital commitment Fairstead made last fall to expand and improve its portfolio.

One of Fairstead’s first investments is an undisclosed sum into Enviro Power, a startup based in Hartford, Connecticut, that makes smart boilers that can co-generate electricity through steam from heating. Fairstead is also invested in and using technology from Kwant AI, which makes wearables for construction and industrial workers.

Startup activity in the real estate field has been heating up. Proptech startups last year raised $32 billion, according to the Center for Real Estate Technology & Innovation.

“Generally, real estate has lagged other sectors in tech adoption, and so from our perspective, it is especially exciting to be in New York, where a lot of decarbonization and sustainability [tech] is leading-edge as far as the startup ecosystem,” said Aki Karja, director of proptech at Fairstead and the head of Fairstead Ventures. “We can be the first adopters and help these companies scale and get what they need to become enterprise-level companies.”

Karja, a startup founder and investor, joined the firm in February and will guide the effort.

Fairstead expects to be rolling more investment soon and is looking for partners in early-stage venture capital, Karja said.