Jones Lang LaSalle’s tech division, JLL Spark, has launched a $100 million venture capital fund to invest in real estate-centric startups.
Along with capital, the company will provide entrepreneurs with outlets to test the real-world application of their products, either by using the technology in-house or sharing it with clients.
“Investment is one thing but what’s our real value? It’s not just money,” Mihir Shah, JLL Spark’s co-CEO said. “We’re setting up specific initiatives to bridge the gap between innovation and implementation. We’re creating a growth team whose job it will be to get these entrepreneurs to connect with the right end users.”
Ambitious as it may be, the JLL Spark Global Venture Fund is merely the latest indication that the real estate world, which has long been averse to change, is warming up to the tech industry.
Shah said the program will provide primarily seed and Series A funding to companies working on technology that would improve leasing, investment sales, property management and other real estate disciplines. He said the fund also will be open to more mature startups as well.
Whether it’s a blockchain-based network or improved sensors that feed into the Internet of Things, Shah said the fund will consider any type of technology, as long as it’s secure. Investments will range from a few hundred thousand dollars to several million dollars at a time, with no set timeframe or target number of companies to invest in.
Earlier this year, JLL Spark acquired Stessa, a portfolio management platform, and it is already in serious discussion with two candidates for Global Venture Fund financing. Since the division was launched last summer, Shah said he’s seen a surge in activity in the realm of real estate technology, also known as proptech.
“In just the 10 months that we’ve been here, there’s already been a dramatic change in terms of the appetite of the [real estate] players to try new technologies to enhance what they’re doing,” he said. “There’s no doubt about that. It’s led to more startups and more investments in them.”
The Rudin family has also launched an investment arm, Rudin Ventures, in partnership with other prominent real estate families, such as the LeFraks and the Wilpons. Meanwhile, Cushman & Wakefield and CBRE have set out to build up their internal IT teams and firms such as Brookfield, Blackstone, Hines and Equity Residential have made spot investments into promising enterprises.
Last month, Newmark Knight Frank led a $9.5 million round of financing for Workframe, a communication platform custom-made for commercial real estate professionals. Joshua Gosin, a managing director at NKF, said his firm has prioritized technology investment not as a luxury but as a means of self preservation.
“You have to constantly be on the lookout for new, better technology to invest in,” Gosin said, “or else you won’t be able to survive.”
Similar to JLL Spark, Colliers International also wants to work in tandem with emerging tech companies. Partnering with Techstars, the company launched an accelerator program that will select 10 up-and-coming real estate technology companies to receive funding and access to Colliers global network.
Although real estate companies have, historically, kept a tight grip on their institutional knowledge, Anjee Solanki, head of Colliers U.S. retail services operation, said that mindset has begun to change as today’s industry leaders seek to remain viable moving forward.
“We are going to see more transparency and information sharing,” Solanki said.
“Retailers understand that they need to share information with landlords and vise versa, if we keep it to ourselves, we’re only hurting investors and retailers alike because all these data companies are already capturing this and charging us for our own information. So why not become an open community for information sharing?”
