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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

    Controlling a Building from Your Phone – OCCUPANT EXPERIENCE Platforms Arrive - 2/28/2019

    The initial focus in mobile technologies was on meeting room reservations; then came lighting, heating and cooling, then access control. Over the last 24 months it has become apparent that there are many more occupant experiences that can be delivered via mobile phone. Managing parking, reporting maintenance issues, ordering coffee, scheduling an exercise class, viewing security cameras, and other applications were quickly added to the list. With so many options and approaches available, what are the best strategies for occupant experience? Build versus buy, functionality selection, solution integration and ongoing support are just some of the topics to be addressed by the industries’ most respected professionals.

    headshot for Chuck Niswonger
    Chuck Niswonger NiceNets Consulting
    Chuck Niswonger President Chuck Niswonger has over 30 years of successful leadership experience in technology-related roles that range from operating his own consulting company
    headshot for Chuck Niswonger
    Chuck Niswonger
    President
    NiceNets Consulting

    Chuck Niswonger has over 30 years of successful leadership experience in technology-related roles that range from operating his own consulting company (www.nicenets.com) to directing the IT strategy of a real estate investment management firm to manufacturing and technology-enabled education. Chuck has also been the chair of the Realcomm Investment Management (IM) Advisory Council for the last ten years, managing content selection for the conference educational sessions, IM forums, workshops and webinars.

    headshot for Matthew Lennan
    Matthew Lennan Oxford Properties
    Matthew Lennan Innovator in Residence Matthew Lennan has been integrating IT and building system technologies for more than 30 years. He has developed and implemented computing infrastruc
    headshot for Matthew Lennan
    Matthew Lennan
    Innovator in Residence
    Oxford Properties

    Matthew Lennan has been integrating IT and building system technologies for more than 30 years. He has developed and implemented computing infrastructures for global financial firms, major healthcare facilities, manufacturing, entertainment complexes and traditional smart buildings. Most recently, Matthew has been working in software development to refine the customer experience for smart buildings in Office, Retail and Residential environments. He is currently responsible for driving Innovation across Oxford Properties’ portfolio.

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    Jared Summers ExxonMobil
    Jared Summers Data, Analytics & Technology Manager Jared Summers is a motivated execution-oriented high performance individual who has extensive experience managing large-scale global programs. He brin
    headshot for Jared Summers
    Jared Summers
    Data, Analytics & Technology Manager
    ExxonMobil
    LinkedIn

    Jared Summers is a motivated execution-oriented high performance individual who has extensive experience managing large-scale global programs. He brings a unique ability to understand and articulate complex technologies in a relatable way while rapidly fielding innovative capabilities. Currently Jared is the Data, Analytics & Technology Manager at ExxonMobil, delivering on the promise of transformational change enabled by digital technologies across the entire global real estate portfolio.

    headshot for Joshua Grosser
    Joshua Grosser ButterflyMX
    Joshua Grosser Vice President - Commercial Sales Joshua has over 15 years of successful leadership experience with early-stage disruptive companies. He has an extensive background in property technol
    headshot for Joshua Grosser
    Joshua Grosser
    Vice President - Commercial Sales
    ButterflyMX

    Joshua has over 15 years of successful leadership experience with early-stage disruptive companies. He has an extensive background in property technology, focusing on amenities that drive tenant experience across commercial real estate, multifamily residential and student housing. Josh has lead national sales and support teams with an emphasis on customer success, brand recognition, and occupant experience.

    headshot for Elizabeth Dukes
    Elizabeth Dukes iOFFICE
    Elizabeth Dukes Co-Founder & CMO Elizabeth Dukes is the Co-Founder and CMO of iOFFICE, the leading workforce-centric IWMS software and the first 100% SaaS platform designed for the Di
    headshot for Elizabeth Dukes
    Elizabeth Dukes
    Co-Founder & CMO
    iOFFICE

    Elizabeth Dukes is the Co-Founder and CMO of iOFFICE, the leading workforce-centric IWMS software and the first 100% SaaS platform designed for the Digital Workplace. Dukes drives strategy for iOFFICE and advocates for the confluence of people and technology that unleashes the full potential of the workforce and the workplace.

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    Nicholas Lawrence cohesionIB
    Nicholas Lawrence Head of Sales As Head of Sales, Nick is responsible for leading the sales organization including domestic sales, product implementation and customer success. Nick’s
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    Nicholas Lawrence
    Head of Sales
    cohesionIB

    As Head of Sales, Nick is responsible for leading the sales organization including domestic sales, product implementation and customer success. Nick’s 20+ years’ involvement with technology dates to the 90s when Peapod did its best to teach him UNIX. Nick’s IT responsibilities over his various positions have included End User Support, System/Platform Administration, Business Continuity Management and Project, Facilities, Procurement, Contracts & Maintenance. Most recently Nick served as Vice President at Environmental Systems Design (ESD).

    headshot for Matt Willmore
    Matt Willmore Modo Labs
    Matt Willmore Director of Product Management Matt leads the product development and roadmap strategy for Modo Labs. With broad experience across mobile and audience engagement, along with a custo
    headshot for Matt Willmore
    Matt Willmore
    Director of Product Management
    Modo Labs

    Matt leads the product development and roadmap strategy for Modo Labs. With broad experience across mobile and audience engagement, along with a customer-centric mindset, he is the company’s product leader for both Workplace and Campus solutions. Matt and his development team continue to enhance the Modo no-code platform, empowering higher education and enterprise organizations to quickly create personalized applications and ensure students and employees have access to the information they need most.