Venture Capital and Commercial Real Estate

Article originally posted on Globe St. on August 9, 2019

Venture capital is changing commercial real estate at an astonishing pace. recently caught up with Andrea Jang, head of growth Americas for JLL Spark, to gain insight on how venture capitalists choose what to fund, how their funding will change CRE, and how to keep pace with the changes. The topics we focused on will be part of a larger breakout session she will serve as a panelist on at the upcoming CREW Network Convention and Marketplacehere in Orlando, FL.

Jang tells that valued around US $1 trillion, real estate is the largest asset class in the world, and technology entrepreneurs are still in the relatively early stages of tackling challenges within the commercial real estate industry. More and more venture capital investors are looking at proptech as an untapped investment opportunity, she says. “Three key opportunities that we are looking at currently are 1) big data and artificial intelligence, 2) sustainability as a driver of innovation, and 3) tenant experience.”

According to Jang, artificial intelligence allows for advanced data processing and automation to improve a firm’s current operations with decision-making insights. No longer do analysts have to sift through millions of data points, she says. “Today, proptech platforms such as Jones, Dealpath and VergeSense are able to harness vast amounts of data to provide actionable insights at the click of a button.”

On the sustainability front, she says, as firms look at innovative ways to reduce their carbon footprint, sustainability is fueling innovative new cleantech entrants in the proptech space. “For example, Software Motor Company retrofitted three exhaust fans in a JLL-managed office in San Francisco, resulting in a 38 percent reduction in energy consumption in three months. As an added benefit, sustainability measures have a positive impact on tenant experience and build goodwill.”

Jang also tells that tenant experience has become a household term in the commercial real estate community. “Tenants expect more out of their buildings, and owners are finding new ways to activate available amenities and provide relevant programming in their buildings. Landlords are able to create better tenant experiences, through services like HqO and Livly, that bring an on-demand app experience to tenants. By better understanding how tenants are engaging with their space, brokers and landlords can work together to attract and retain the best tenants for their buildings.”

Andrea Jang, head of growth Americas for JLL Spark