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RE Tech | PropTech | CRE Tech: An Assessment of the Industry's M&A Activity

Since 2009, we have clearly seen more interest in RE Technology | PropTech | CRE Tech than any other time in history. Given the size and scope of real estate as an asset class, everyone is searching for the inefficiencies and broken business models that technology, automation and innovation can address.

The market is moving so fast that most have lost track of the amount of investments coming into it and the word 'billions' is thrown around with ease. To date, we know it is at least $15 billion resulting in over 3,000 companies now selling some type of technology and/or automation solution to the industry. We saw over $2 billion of 'new' capital at Realcomm|IBcon this past June from those seeking new companies and ideas to invest in. JLL Spark’s recent investment in Dealpath for an undisclosed amount is a recent example. Dealpath was founded in 2014 and states they have over $500 billion worth of transactions on the platform representing hundreds of clients.

While much attention is being paid to the startup community and capital flow, the Merger & Acquisition (M&A) activity by established companies has been advancing at a steady pace. A good deal of the acquisition movement has been done by industry powerhouses such as Yardi, MRI, Costar, Siemens, CBRE, JLL and many others. However, Accruent’s recent acquisition for $2 billion in cash was done by a company not familiar to our industry: Fortive.

What is interesting about most of the M&A activity is that the companies being bought are well established, mature organizations with clients and cash flow. The firms have experienced management teams and were acquired to fill a need of a larger enterprise suitor. The larger aggregator companies appear to be working toward providing end-to-end solutions that cover the ever-expanding application sets that automate real estate processes. Once these acquired companies are under the control of the enterprise companies, then integration, data integrity, seamless interface, resource leverage and ease of use can be achieved.

Some of the most notable and/or recent M&A that have taken place over the last few years have been:

The following represent the deals closed by the real estate industry’s leading technology, automation, data firms and service providers that have been very active in their acquisition activity.

The most notable merger in our industry in recent years was between VTS and Hightower which was announced in November 2016. This was an example of two competitors coming together to create a situation where 1+1=3.

    While we may not have identified each and every acquisition by established automation companies in our industry, the list we have assembled does illustrate some important trends.
    • Existing, mature companies have been, and should continue, to be active in acquiring companies
    • These existing companies are adding to their platforms and are expanding their “enterprise” capabilities
    • Single focus applications need to have a strategy for integrating into larger platforms
    • Most of the companies being acquired were established in their own right with experienced management, customers and revenue
    • Existing companies are good prospects to acquire CRE Tech and PropTech startups
    • Blending new ideas with established companies and their ecosystems seems to be working
    • We should expect to see more M&A activity as the industry continues to calibrate and mature
    We are going to keep a keen eye on the M&A activity in Real Estate, CRE and PropTech over the next six to twelve months. We will focus on this topic as it relates to Corporate Real Estate and Facilities technology, automation and innovation strategies at ourupcoming CoRE Tech event in Silicon Valley on November 14-16 at the Santa Clara Convention Center.

    The following is a description of the session being presented at an CoRE Tech 2018:
    RETECH, CRETECH, PROPTECH Investments Expand – Navigating Hype and Reality
    Since 2009, there has been an extraordinary wave of new investments in companies selling some form of technology and/or automation to the Commercial and Corporate Real Estate industry. The number ranges between $15 and $20 billion invested , this has resulted in a PropTech industry of more than 3,000 companies. This year alone we have seen another $2 billion added to the PropTech pipeline. While massive investment will inevitably result in some stunning innovation, it has also led to a large-scale sense of confusion. How to identify, vet, test, implement, support and integrate these new solutions into an existing Corporate Real Estate automation strategy is a formidable task and will be the focus of this timely session.


    Jim Young, Co-Founder & CEO, Realcomm
    Founder of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world's leading conferences on technology, automated business solutions, intelligent buildings and energy efficiency for the commercial and corporate real estate industry. As CEO, Jim interacts with some of the largest companies globally pertaining to some of the most advanced and progressive next generation real estate projects under development.

    This Week’s Sponsor

    Yardi® develops and supports industry-leading investment and property management software for all types and sizes of real estate companies. Established in 1984, Yardi is based in Santa Barbara, Calif., and serves clients worldwide. For more information on how Yardi is Energized for Tomorrow, visit www.yardi.com.

    Realcomm News


    Join the most innovative Corporate Real Estate and Facilities executives from companies such as American Express, CBRE, Exxon Mobil, Google, Intel, JLL, LinkedIn, McKesson, Salesforce, Wells Fargo, and many others, as they gather to discover, discuss and debate how technology, automation and innovation will continue to impact the next generation of how we use and operate corporate facilities.

    Watch this brief video and learn more!



    UPCOMING REALCOMM WEBINARS

    Technology and the Impact to a Commercial Real Estate Strategy – Innovators Weigh In - 10/3/2018

    For today’s Commercial Real Estate CIO, new technologies continue to emerge that are changing the landscape daily. Long gone are the days where property management, budget and forecasting and e-mail are the only concerns. Today, digital transformation, smart buildings, occupant experiences, automated leasing, artificial intelligence, augmented reality and cyber are just a few of the new technologies impacting the role of CIO. This webinar will discuss the wide-ranging set of technologies changing the commercial real estate industry and more importantly, the types of strategies necessary to navigate at an ever-increasing speed. Hear from some of the industry’s most successful CIO’s regarding this “Age of Acceleration”!

    headshot for Jim Young
    Jim Young Realcomm
    Jim Young Co-Founder & CEO Founder of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world's leading conferences on techno
    headshot for Jim Young
    Jim Young
    Co-Founder & CEO
    Realcomm
    LinkedIn

    Founder of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world's leading conferences on technology, automated business solutions, intelligent buildings and energy efficiency for the commercial and corporate real estate industry. As CEO, Jim interacts with some of the largest companies globally pertaining to some of the most advanced and progressive next generation real estate projects under development.

    headshot for Wayne Pryor
    Wayne Pryor 2Five1 Consulting
    Wayne Pryor Founder
    headshot for Wayne Pryor
    Wayne Pryor
    Founder
    2Five1 Consulting

    headshot for Susan Gerock
    Susan Gerock Washington REIT
    Susan Gerock VP, IT & CIO Susan Gerock currently serves as VP, Information Technology and CIO for Washington REIT, a publicly traded REIT based in Washington, DC. She has over
    headshot for Susan Gerock
    Susan Gerock
    VP, IT & CIO
    Washington REIT

    Susan Gerock currently serves as VP, Information Technology and CIO for Washington REIT, a publicly traded REIT based in Washington, DC. She has over 20 years' experience in various technology roles spanning manufacturing, consulting, application service provider, and commercial real estate organizations. Her specialties include ERP selection and implementation, project and change management, and cybersecurity. She is also a proponent of the use of social media and the overlapping relationship between technology and marketing.

    headshot for Phil Klokis
    Phil Klokis GSA/PBS
    Phil Klokis CIO Phil Klokis is currently the CIO for the Public Buildings Service (PBS) of the General Services Administration. He is responsible for delivering Infor
    headshot for Phil Klokis
    Phil Klokis
    CIO
    GSA/PBS

    Phil Klokis is currently the CIO for the Public Buildings Service (PBS) of the General Services Administration. He is responsible for delivering Information Technology (IT) solutions and services supporting PBS' diverse real estate operations and portfolio management consisting of 1,500 owned assets, 9,000 active leased assets and nearly 350 million square feet of office space.

    headshot for Ron Victor
    Ron Victor IoTium
    Ron Victor Founder & CEO Ron Victor is a Silicon Valley based technology entrepreneur with 20 years of experience and expertise launching new ventures at start-ups and fortune
    headshot for Ron Victor
    Ron Victor
    Founder & CEO
    IoTium

    Ron Victor is a Silicon Valley based technology entrepreneur with 20 years of experience and expertise launching new ventures at start-ups and fortune 1000 technology companies. To-date he has enabled raising more than $30Million in start-up capital for multiple start-ups in silicon-valley. Ron has founded and led three companies to-date with successful exits. His latest venture is IoTium Inc. – a Silicon Valley start-up that provides a secure, cloud-managed, easy-to-deploy software defined network infrastructure for all IoT verticals.

    headshot for Marc Petock
    Marc Petock Lynxspring
    Marc Petock Chief Communications Officer & VP, Marketing Marc is a pioneer in leading the Intelligent/Smart Buildings and M2M movements pushing the industry forward and has contributed to transforming and ch
    headshot for Marc Petock
    Marc Petock
    Chief Communications Officer & VP, Marketing
    Lynxspring
    LinkedIn

    Marc is a pioneer in leading the Intelligent/Smart Buildings and M2M movements pushing the industry forward and has contributed to transforming and changing the Intelligent Buildings and M2M (now IoT) industries. As Chief Marketing and Communications Officer for Lynxspring Marc leads corporate and product marketing, strategy, brand management, public relations and communications that support the company’s strategic and growth initiatives.

    headshot for Scott Sidman
    Scott Sidman Building Engines
    Scott Sidman Chief Marketing & Strategy Officer Scott Sidman has 14 years of CRE technology experience leading sales and marketing efforts. He is responsible for supporting company growth goals and
    headshot for Scott Sidman
    Scott Sidman
    Chief Marketing & Strategy Officer
    Building Engines

    Scott Sidman has 14 years of CRE technology experience leading sales and marketing efforts. He is responsible for supporting company growth goals and assuring company and product direction aligns with market needs as well as leads. Scott is CRE tech evangelist and host of a CRE Tech Talks podcast.