10.12.21
Coming on the heels of CRETech’s return to live events with an 1,800 person turnout in NYC on Oct 13 and 14th, Louisa sat down with three of the leaders who headlined the event. She spoke with Brad Greiwe, Co-Founder & Managing Partner at Fifth Wall, Raj Singh, Managing Partner, JLL Spark and Sharad Rastogi, President of Revenue at JLL Technologies.
They talked about their recent investments, the global movement towards sustainability in buildings and who the responsibility lies with to make changes towards net zero, and how buildings will be computers in need of operating systems in the future.
Click here to listen to this episode of the Propcast!
Companies Mentioned:
Key Insights From This Episode:
Keywords: funding, innovation, sustainability, collaboration, acquisition, smart buildings, COP26
About Our Guests:
Brad Greiwe, Co-Founder & Managing Partner at Fifth Wall
https://www.linkedin.com/in/brad-greiwe-96022a38/
Brad Greiwe is a co-founder and Managing Partner at Fifth Wall, where he guides the firm’s strategic vision.
Prior to starting Fifth Wall, Brad co-founded Invitation Homes (NYSE: INVH), a multi-billion dollar owner and operator of single-family rental properties originally backed by The Blackstone Group. As CTO, he positioned Invitation Homes as the dominant technology-forward brand in the single-family rental category, developing a proprietary technology stack to support the valuation, acquisition, rehabilitation, leasing, and professional management of over 80,000 homes in 17 major markets, serving 120,000 residents across the U.S.
Brad started his career in investment banking at UBS in the real estate, lodging, and leisure group, where he tallied over $33 billion of M&A advisory work and $1 billion of debt and equity financing, including the sale of Hilton Hotels to The Blackstone Group for $26 billion—the largest hotel privatization in history. He then worked in real estate private equity at Tishman Speyer and Starwood Capital, where he executed over $30 billion of acquisitions, debt financing, and development projects.
Brad is originally from Cincinnati, lives in San Francisco, and graduated from Harvard University, where he received his BA in economics.
Raj Singh, Managing Partner, JLL Spark
https://www.linkedin.com/in/rajsingh/
In his role as JLL Spark managing partner, Raj guides strategic investments to continue growing JLL Spark’s portfolio, further accelerating innovation and adoption of PropTech in commercial real estate. Raj is a venture capitalist, strategist and adviser in the innovation and information technology sectors. He most recently served five years as head of investments and then as interim co-head at JetBlue Technology Ventures—the corporate VC arm of JetBlue Airways.
JLL Spark – Company Summary
JLL Spark is a global venture fund, founded in 2017, investing in early to mid-stage property technology startups. JLL Spark’s team and venture capital fund have invested tens of millions of dollars in more than 30 early-stage proptech startups—from IoT sensors to investment platforms and more.
Sharad Rastogi, President of Revenue at JLL Technologies
https://www.linkedin.com/in/sharad-rastogi/
Sharad Rastogi is president of the revenue division at JLL Technologies (JLLT), a business division of JLL dedicated to commercial real estate (CRE) technology. Sharad leads product strategy and engineering execution of JLLT’s revenue-generating technology offerings, helping to unlock data-driven insights and experiences, while improving the efficiency and ROI of clients’ real estate portfolios.
JLLT – Company Summary
JLL Technologies (JLLT), a business division of JLL, was established in 2019 to build and expand the company’s portfolio of technology products and services to shape the future of commercial real estate. JLLT is a first-of-its-kind team that combines commercial real estate experts with world-class technologists to deliver solutions that transform the way organizations acquire, manage, operate and experience space.
About Our Host
Louisa Dickins
https://www.linkedin.com/in/louisa-dickins-ab065392/
Louisa started her career in property working at a well-known estate agency in London. Realising her people skills, she moved over to Lloyd May to pursue a career in recruitment. She now is a Director at LMRE, who are a specialist recruitment firm driven by PropTech and recruitment professionals, and Louisa oversees their 5 core areas. Louisa co-founded LMRE and provides a constructive recruitment platform to the new disruptors in real estate. Louisa is also on the board of Directors at UK PropTech Association (UKPA).
About LMRE
LMRE believe there is a better way to recruit. LMRE focus on a more comprehensive, client led focus delivering exceptional talent to the place at the time. They are passionate about the industry and passionate about people’s careers. LMRE spend time with each client to become and an extension of the business, and their transparency and core values help them grow with the sector. LMRE simplify recruitment and innovate with our clients and evolve the people driven, PropTech community.
Transcript
[00:00:00] Louisa D: Welcome to the Propcast. Now, today is a very special podcast as we’ll be throwing it all the way back to Michael Beckman’s CRETech New York city event back in October, and we’ll be looking at the key takeaways of the event while summarising the major challenges that we are facing the industry and what we’re doing to really overcome them.
And the reason why it’s also super special is that we’re lucky enough to have a few of CRETech’s headline speakers all joining us today. And it took a lot of time to get us all on one podcast and the reason why is because we have our very own Managing Partner and co-founder Brad joining us from, Fifth Wall.
We also have JLL Sparks Managing Partner, Raj, and another member of the JLL family, Sharad, who is the President of Revenue at JLL Technologies. So welcome to the show, Brad, Raj, Sharad. It’s such a treat to have you all on one podcast.
[00:00:46] Brad G: Thanks. Great to be on and thanks for having me.
[00:00:48] Raj S: Yeah, likewise really appreciate it.
[00:00:50] Louisa D: Great to have you guys all on. Now in this part, we’re going to learn about JLL Sparks investment strategies. We’ll also be learning how JLLT is working to develop innovative products themselves in house and how they’re going to be servicing their extensive global client list. And we’ll also be hearing what Fifth Wall has planned for their climate fund among many other things.
And our guests will also be summarising the key takeaways and CRETech New York and things for us to look forward in 2022. And as I said to the guests, before we hopped on, I can’t believe we’re talking about 2022. So without about further ado, let’s start the podcast and Raj, I’ll start with you, you know, as Managing Partner at JLL Spark, your role is to guide strategic investments to continue to grow your fairly vast portfolio, I read about your recent investment with Navitas Capital and Swift Connect. And obviously various acquisitions, you guys have been extremely busy with building a skyline. Can you talk the audience for a bit more about your role, what your sort of strategy is and stuff which we should be watching out for?
[00:01:54] Raj S: Yeah. Happy to. So, you know, Spark’s been going for about four years now and the goal really is to supercharge these strategic objectives of JLL and JLLT specifically. So we’re looking to invest in anything related to the core mission of the corporate parents, where we can have an outsize influence on the outcome.
By that, I just mean that we invest in companies where we think that we can be a customer or we can be a channel to our clients, and sell their products through that channel. Whereas some companies may be able to bring hundreds of millions of dollars into an investment. That’s not necessarily our style, but what we can do is bring a huge amount of revenue.
And by doing that, hopefully make that company more successful. So that’s a broad range. It could go from something to relate it to sustainability, which is probably one of our top topics right now, all the way down to something like you mentioned just now, which is Swift Connect where we’re talking about access control and how that’s going to play a crucial role, for all of us going forward.
Yeah. We tend to invest in relatively early stage. So, sort of seed, series A, $1 – $10 million. And, I think we’re up to 35 companies now, so it’s a relatively fast pace, especially for CVC, but it feels like prop techs having a moment and by moment I mean a decade or two, and, it’s important for us to bring technology to the real estate industry, which I think, could do with some, honestly.
And, the more that we can bring productivity to the industry, I think the better. So that’s really what we’re trying to do here. And, you know, so far so good.
[00:03:27] Louisa D: Well, I think you guys seem to be doing very well and definitely leading the way
Now, Sharad, wveryone thinks of JLL as a traditional sort of a real estate agency.
There’s so many different parts of it now. How does JLL Technologies work alongside Spark? And obviously there’s concrete too. Talk us through that, how it ties into the family tree. And I’d love to hear a bit more about maybe some products you’re developing in house where you’re seeing like an increase in activity.
[00:03:53] Sharad R: JLLT is to help our customers with technology that we see there are massive problems, which the industry is facing. You know, whether it is, how do we make buildings more healthy, more sustainable? What is the future of work? What is the future of the workplace? How do we avoid the direct with the space?
What kind of space you need now? How do you enable investors to make better decisions? To buy itself properties or to increase the value of the properties they already own. I mean, these are, really, really hard questions. Our fundamental belief at JLLT is that technology will help solve these problems.
So we are making a very massive bet across JLL, to enable our customers, and help them with technology. So it spans a full spectrum. At JLL, you know, we are investing in parts and solutions, which can make the JLL services more efficient. We believe all the services that JLL offer are tech enabled and that’s the differentiating factor for us. At the same time, we also believe there’s a set of customers who will want to deploy technology directly.
Right? So, we are now developing products like Azara products, like. products like Griego products, like Building Engines now and featured deliver products from skyline, but we can bring these things directly to the market, enable our customers to use the technology. We also have a solutions team which can help integrate a number of these piece products, building integrated stack, to help deploy and enable our customers to get value.
And then we have Spark, which is where we are making investments in earlier stage companies, really seeing what the innovation is happening, helping those companies in the process. So, you know, it’s a full spectrum, which enables us to deploy and develop technology at scale.
[00:05:29] Louisa D: It’s interesting to watch what JLL are doing and JLL Spark and JLL Technologies and the whole family, because I feel like there’s no perfect way, whether you’re building technology in house or, acquiring other businesses. We’re still fairly early on, you obviously seen businesses like Nuveen, PGIM and you name it to the hiring these innovation teams and it’s, what’s the right thing?
Is it bringing in external technologies, is it building it house? I don’t think there’s any quiet sort of right passage for it just yet. And so time will tell. Now, Brad, we’d love to obviously hear a bit more about Fifth Wall. Nonstop reading about companies to invest in particularly, on the sort of the ESG side, you’ve obviously raised your climate fund.
I think you’ve invested in a few businesses. I’ve been following personally, Turn Tide, Icon, Sealed. Talk us through a little bit, you know, you say it’s founding at how it sort of changed a bit about your mission.
[00:06:17] Brad G: Yeah, sure. Listen, I think Fifth Wall’s mission from the get-go has always been the mission of bridging the gap between technology and the broader real estate industry by providing, unique and actual access to the most impactful venture backed businesses.
And while we sort of, cut our teeth initially, focusing on built world technologies, it became abundantly clear as our business default that, technology deficiencies across the real estate industry, weren’t the only thing affecting it. Technology was definitely impacting and influencing, from a disruptive or an enabling perspective.
But at the same time the challenges around, climate tech specifically around decarbonizing the built world was also proven to be extremely challenging as well. The muscle groups that these corporates need in order to engage technology, and decarbonization, require different approach.
And in many instances, partnership with firms like Fifth Wall and access to a growing ecosystem of innovative and venture backed companies that are well-positioned to help them navigate those opportunities and those risks. So, Fifth Wall was really purpose built for that navigation.
We’ve always been considered us the sort of connective tissue between the old world and the new, and we really work hand in hand with our corporate partners, which now, are over 80, in 15 different countries globally representing, you know, at this stage, a little over two and a half billion dollars of assets under management.
We help them, you know, through a very, programmatic engagement to allow them to identify the appropriate priorities, the relevant technology companies or climate companies they’re gonna help them achieve those specific priorities. And then helping them ultimately deliver bottom line impact to their business.
You know, obviously it’s a fiduciary of venture capital. We’re always focused on delivering great financial returns, but what makes us different from our peers, and I’d say the broader venture industry in general is that we’ve built a platform that can work with our corporates in a very intimate way allow them to deliver that bottom line impact to their business, which is, you know, just as important as that financial return.
[00:08:16] Louisa D: Yeah. And we’ve just had COP26 as well. So, as you mentioned, you’ve got 80 partners since COP26 everyone has targets we need to hit, fairly soon and they’re pretty big targets. Is this going to help with buy-in from partners for future investment or see growth of more sort of climate tech businesses, how do you think that’s going to affect our industry?
[00:08:37] Brad G: I think the industry is pointed the direction of meeting growing demands and needs for reducing the carbon impact of real estate. And whether it be, the recent conferences and some of the regulation and seeming to be global participation to move the industry forward, while that’s all important and governments are going to play crucial roles in ensuring we move in the right directions.
The private side is going to be the true driver of this. And I think what makes this sort of green wave a lot different than the ones we’ve seen in the past is that, you know, in addition to sort of this government mandated demand, there is a real impetus and a real interest from corporates to be a part of the solution.
You know, our industry in particular real estate, is a massive contributor to global energy use and CO2 emissions. As you know, as soon as the public, and capital markets, and tenants and consumers wake up to that fact real estate is likely going to be public enemy number one. And unless we’re being proactive about really investing, not just the time and resources, but more importantly, the capital to help solve a lot of these really important issues, it’s all going to be lip service.
And I think now that, I think what Fifth Wall has done is, try to do what we did in technology, right? Build a consortium of some of the biggest, largest, most respected players to not just invest, but work together, to help solve these problems. I mean, everybody could go this alone and it’s going to take us twice as long to get there.
If we all come to the table and look to contribute and collaborate, I think we get to that carbon neutral world a lot quicker. And you know, we’ve already signed up, you know, industry leaders like Equity Residential and Hudson Pacific Properties, Ivanhoe Cambridge, Kimco, all these names are well-respected and I think with their investment is going to come the credibility to get the rest of the industry to follow suit.
[00:10:12] Louisa D: Yeah. Interesting. You mentioned Equity Residential. I did a podcast with Scottie Lee, obviously on the sustainability side that we’re talking about just this, but also going back to your point about, the sort of private sector leading and it’s down to the governments, in the UK we obviously, we have loads of old historical buildings.
And if all these estates who own them want to actually say, get rid of these gas boilers and put in something more energy efficient, or I genuinely don’t know how they’re going to do that until, and how long it will take to let that sort of change happen. So, it will be interesting to see.
We obviously have quite a few things in common. One is obviously a passion for sustainability and innovation of the built environment, but also that we all attended, CRETech in New York and it was great to be back. I think there was like 2000 people across the two days. Raj, what were your sort of key takeaways from the event, or maybe someone else’s session which you attended anything which has stuck out for you, or that you particularly sort of enjoyed?
[00:11:12] Raj S: Yeah, I mean, obviously it just enjoyed being there with real people. I think the two things that stuck out for me firstly, was the number of attendees from the regular real estate world, as opposed to the technology PropTech world. So, there were a huge number of people there who were genuinely curious to understand how technology could have an impact on their business. And I think that was heartening, because I see that people are now recognizing the challenges that we have in front of us and they’re looking to find solutions. So that was all extremely positive. The other thing that I thought was really interesting and bodes well, is, you know, obviously in New York, they’ve got local law 97 that is starting to put on some sustainability criteria around how buildings are built and managed and used.
And I genuinely was surprised to see for the first-time people are accepting that in order for them to meet these goals, they might be prepared to spend a little bit more per square foot than they would have done normally. And in an industry where we are famously very cost-conscious, for people to be saying that this is important enough that I’m prepared to put my hand in my pocket and pay more because this is the right thing. And I think when I say the right thing, it’s also because the landlords are recognizing the tenants are looking for the sorts of answers. That’s super heartening for me. And I think, you know, if we’re going to meet our goals, Yeah, we need people to recognize that the demand is out there and it may cost a little bit more on the short term, but that’s the way that we’ll get to essentially get in the tenants back into the office because they know that they’re doing the right thing.
And you know, all of the private sector now has goals around carbon reduction. So, you know, as a, as a large public company with a very footprint JLL and others, we want to be able to point to what we’re doing and show in concrete terms that we’re making a difference. And so that was, I think, you know, a new message I saw and I was very happy.
[00:13:06] Brad G: Yeah, I know this, this is my podcast, but can I ask a follow up question?
I’m just really interested to hear this perspective. So, I totally agree with you in terms of, I think on the owner operator side, I think that that willingness to engage is increased dramatically. Just curious to get JLL’s perspective, right? There’s two sides of that coin. How are the tenants thinking about this?
Right. Cause I think there’s always this sort of, dichotomy between where the responsibility lies. Is it the landlord? Is it tenants? How can these costs potentially be shared moving forward? What are you guys seeing on that side?
[00:13:35] Raj S: Yeah, we’re seeing a lot of tenants that are asking questions about what is my contribution to the climate issue here, by using these buildings and actually going beyond that.
Right. So it’s like getting to, and from the office, my whole carbon footprint. How do these buildings play a role in that? And how do I measure that and how do I improve it? And some of that is, you know, new thinking and I’m not saying that everybody’s there, but you know, the people who are in the Vanguard are starting to ask those questions and, you know, that’s actually informing our investment philosophy.
We’re looking for companies that can demonstrates it. If you’re a public company and you’re have tenants and a number of, buildings, around a city or country, whatever it might be, you know, you want to be able to demonstrate to your shareholders and your stakeholders that you’re, you’re moving the ball here, you’re moving the needle.
And so, the first thing that you want people to do is say, well, where do I stand today? Right. And actually getting good data around what is your carbon footprint, is quite hard. And then accounting for it. Also hard. First of all, baselining measuring, and then what are the tools that I need in order to build to improve? And so we are actually seeing demand for that. So, you know, as I said, I’m very heartened to see it, but that’s kind of what we’re seeing Brad.
[00:14:50] Sharad R: I mean, I think change is driven by people, The whole world is waking up, why we need to be more carbon neutral, how we need to sort of control increase in temperature. What can we do as individuals to make the world a better place. And I think that’s driving the investors, the occupiers to make different decisions. That’s why every company has a carbon neutral target.
Every city, every country wants to be carbon neutral, 2030, 2040, 2050. It’s all driven by people. Whether the people are tenants they are shareholders. They are stakeholders. They are all the ones who are driving, who are the betters behind the change. And I think that’s why this change is going to happen.
[00:15:25] Louisa D: Yeah. I like to add to that as why I think change is driven by people. I think a lot of it comes down to education, whether it’s back, you know, sort of in school and universities and people like talk about it more and more sort of involvement of this topic of in the curriculum. And then that’s when people start making decisions, for example, I just heard of the green mortgage, you know, people my age now looking, getting like little things like that can help them, keeping aware of the effects of what you do day to day.
The effect that hasn’t people sort of globally, it was obviously driven by so many things, but I think the education is like a big piece, which I think globally a lot more can be done. Hopefully this podcast will help and obviously Brad, your podcast too. Going back to, the question, you know, Sharad and Brad, maybe brand you can go first, you know, is there anything which would have stood out for you from CRETech?
[00:16:08] Brad G: Yeah. I think all those things, what’s been interesting to see is the similar trajectory that we saw with sort of the passionate excitement and the growth of the prop tech ecosystem over the last five years, we’re seeing that manifest in a similar fashion around climate. So that’s really encouraging because I think you’ve seen obviously the significant amount of additional capital infusion in sort of the built world prop tech ecosystem going from, you know, I think it was like five or 6 billion to 30 plus, the last 10-12 years. So that to me, I think is indicative of what we’ll likely see around climate, but I actually think it will happen faster. the reason being is I think there is some areas, both from a federal state and a local perspective, significant financial, impact to not meeting some of these criteria.
Alot of other cities are looking to adopt similar, regulation. And when, you know, everybody wants to be altruistic here, but at the same time, when this stuff starts to hit the bottom line of impacts your business, you’re gonna be much more motivated. So, there’s still a lot of work left to be done.
You know, we, we were adding some analysis that sort of pointing to the fact that. You know, we’re only sort of like 40-50% of the way there in terms of existing retrofitting in order to meet some of these standards. So there’s still a long way to go, but I’d say I was encouraged by was a willingness to have that conversation, a willingness to start to engage and invest.
And hopefully I think once we start to deliver real value, and the industry starts to see that effect ability to sort of not only meet these needs, but also operate their buildings more cheaply, derive brand value, engage a different set of customers in a different way. Have cheaper access to venture capital through an enlightened capital markets.
That’s focused on folks who can really tell a story about their impact climate in the world, all these things are super encouraging. I think it was reinforced by my time there.
[00:17:52] Louisa D: I agreed with that. Sharad, what about you? Anything, any sort of key takeaways to you from it?
[00:17:58] Sharad R: Yeah, I mean, for me, this is the first real, CRETech conference. I really didn’t know what to expect. Very, very pleasantly surprised to see so many people interested in technology and, you know, the 8,000 startups, but like 20% of the people were there. So, it was just, you know, a great to have great conversations.
The one area where I’ve felt a lot of focus and interest, I think it’s tied to the theme around sustainability is really about, you know, building automation. I feel buildings are getting smarter. People are thinking about deploying more sensors, you know, more software to control them better, you know, more data and analytics to make better decisions.
I think buildings are will become computers eventually, and computers need an operating system.
But just on that theme, I just felt there was a lot of focus around how technology can make buildings smarter and how that can help us get to a better carbon footprint.
[00:18:47] Louisa D: Yeah. I mean, I’ve particularly enjoyed it as well. And then the, I think it was a week after headed to the one in London, which has also had a great, a great turnout. Some great speakers too. And I think Michael announced early on this week, he’s doing a climate focused one in Copenhagen in, I think it’s May time. Brad, you might know a little bit more about it than I do, but I think that’s then so stay tuned because obviously CRETech Climate Tech,
They’re very good at marketing their events out. Now we’ve obviously spoken about the future, and I love to, hear from all of these what are the sort of major challenges that we’re sort of facing in the years to come? I think we have many goals, which we’re trying to hit with lots of conviction from everyone saying, yeah, we’re going to do it.
What are the, the major challenges and things that we should be doing, and also I’d love to hear from each of you, are there any sort of products you’re particularly following or areas, which are of interest? Maybe Brad, you can go first.
[00:19:40] Brad G: Yeah. I’d say on the areas of interest, you mentioned a few in terms of some of the companies that we’ve invested with recently.
And they really stem around handful of more overarching themes that we’re focused on investing out of climate tax. The first is de-carbonization, which we talked about, you know, Turn Tide that you mentioned, which is a phenomenal company, essentially electric motors that are 30 to 60% more energy in primarily sold in HVAC, which you can imagine some massive footprint across the real estate industry globally. Also has a myriad of other applications, across other industries as well. I mean, it’s cheaper to manufacture, cheaper to operate, cheaper to maintain, with customers seeing, you know, a payback period anywhere from 18 to 36 months.
So that’s really encouraging in terms of a company being able to identify a problem, build a significantly superior alternative. I’m watching the industry adopt it scale very quickly.
We also have another theme around tenant and consumer tech. Sealed, as you mentioned, is sort of another category leader there, including improving installation, electrification of heating and cooling in single family homes, residential energy accounts for roughly 20% of global greenhouse gas emissions.
It is a prime target for net zero upgrades improvements. Another category of building materials, Icon, another phenomenal company, 3D printing system that can, currently print out the entire wall system of buildings and in the future, likely to be able to do roof structures and foundations as well.
Really looking to sort of bridge both the housing and labour shortage, supply demand gap, as well as produce foams much faster, cheaper costs, and most importantly, with significant less material. It is incredible the amount of waste that comes from the home building process, and to be able to see Icons system, essentially print a building, with a minimal footprint in 48 hours, with all concrete, that’s better insulated, and can last significantly longer than a typical sticks and bricks, is really encouraging for the future.
And we’re really excited about that. And it’s getting institutional recognition, DR Horton, Mernards. Builders in the U S are partnered when ours actually just announced a hundred unit, development in Austin that’s going to be all Icon printed homes. So both consumer and corporate engagement, in these Texas solutions.
And it’s all super, interesting. I think one of the things that challenges, like everything in an industry that’s just starting to learn and get up that, that curve is really sort of apathy. Right. If you’re not heavily invested in PropTech or climbed with tech right now, whether that’s time, resources, and like I said, most importantly capital, so real alignment, you’re already way behind.
I think for a lot of corporates who expecting the world to just go back to normal, post pandemic, it’s just not going to happen. And having a very comprehensive digital strategy is likely going to be your best way to navigate the path forward. And we already saw corporate who were prepared for that and built those muscle groups prior to COVID be able to not just, navigate COVID, but actually grow during COVID, in a way that really distinguished themselves from their competitors. I think that was a real wake up call, but, but also a real opportunity. Those are the things that we’re sort of focused on and where we think the challenges the industry is still lie.
[00:22:36] Louisa D: Yeah. You mentioned obviously about concrete and it goes back to the education piece we spoke about briefly earlier. I had no idea how much concrete, is it something like 10% contribution to the real estate emissions or something crazy like that? Like, I think there needs to be more awareness at like younger level of this because I genuinely, and the more I sort of read, I’m trying to learn and develop my understanding each day, I find it honestly like shocking.
Raj, what about you? Talk us through I think you said you had something like 34 investments, any sort of, future investments you’re looking at and how they’re going to sort of assist with some challenges coming next year?
[00:23:14] Raj S: Yeah. you know, and it’s great to have the shout-out for Turn Tide where huge investors in Turn Tide as well, and very excited about what they, you know, Ryan and the team is doing there. And think it’s got a very bright future because new energy costs can run up to 50% of the commercial buildings, total usage of the motors.
I mean, and so that’s a very clear area. You made the point about concrete. It’s, you know, it’s concrete and steel, essentially that’s driving a lot of the carbon emissions. And so, there’s a lot of interesting things going on moving away from those to mass timber and cross-laminated timber. We’ve invested in a company called Juno that does a combination of offsite modules, design and using mass timber.
Where you can effectively build buildings at all new mid-range in height, up to about 13 to 15 stories. And that saves a huge amount of carbon emissions by avoiding the concrete and the steel. that’s one, we’re very excited about it. And I think that that trend will continue looking for more interesting ways to embody the carbon upfront and make, make life easier.
But, you know, COVID has been, you know, a huge accelerant and I think it’s also going to be one that we still haven’t quite finished working out yet. You know, in the old days you would say it was always about location, right? It still is about location. But now the question is, well, I’ve got lots of interesting locations I can choose from, how will I manage the new world where, you know, some fraction of people will not be in the office every day? And so when you have a distributed workforce, you have to think about how that’s going to work. In the old days, I think we all kind of relied on being in the office, meeting each other, those serendipitous conversations that allowed the culture and the understanding of what the company was trying to do to permeate. Those things don’t happen today.
And so one of the things that we’re really interested in is what are the processes that needs to be in place to allow that sort of learning to happen, even if not everybody is located in one place. And there are a bunch of companies, mostly startups, who have become natively distributed. They started distributed.
They’ve continued distributed. What can we and our customers who are often larger companies learn from how they make their companies work well, such that we can apply that to a situation where we now are also distributed to some extent? I don’t believe that people won’t be returning to the office, but I think there’ll be back there for different reasons and at different times.
And so that’s an area that we’re really, really interested in. The other one that I think is very exciting for me is, around capital. And so, we’ve talked a bit about that today that that’s essential. That’s the oil that makes the wheels turn. So how do we ensure that the real estate industry can apply capital to the right places at the right time and in the right amounts?
So, you know, right now, we have a pretty sclerotic situation where, you know, you put a lot of money in upfront. It takes a long time for you to get that money out. How do we change the way that capital is allocated? How do we allow more players to participate in the potential upsides? This is an area that real estate hasn’t really been at the forefront of, but other industries have been doing very, very interesting things here.
You know, the FinTech revolution within banking and retail has absolutely made a huge difference there, can we bring those sorts of solutions to our industry? So, I think that’s another area that we’re very keen to explore and, you know, for 2022 prediction, obviously sustainability is high up there, but I think the financial services and just the whole, return to office kind of situation is going to be top of mind for us in terms of our investment philosophy.
[00:26:50] Louisa D: Yeah, I echo all of that. And what about, okay, Sharad, JLL Technologies, what are you sort of working on in 2022? What are your clients asking you for in terms of products, anything you’re working on in house?
[00:27:03] Sharad R: Raj already touched about sustainability, about building automation. I think that’s one big area you’ve already talked about the future of work and workplace and how do you enable people to return to work and collaborate with each other in a more efficient, more productive at it?
I think that’s a huge area of investment for us. I think if I were to start off, you know, and we also talked about investors and how you can enable investors to make better decisions. If I was to sort of add to that, I would say data is very siloed, very fragmented. The quality is not good. So how can you aggregate that Cleanse it, make it usable and draw some insights?
I also think, this industry is very opaque and very liquid. People could be for services that could be anywhere from, you know, a plumber or electrician in a building to, somebody who is appraising or valuing a building, to somebody who’s providing insurance that tons and tons of services. And I think there’s lots and lots of opportunities on that as well.
Proportional portions of those buildings are things are very, very interesting ideas on how you can make transactions more seamless, more liquid. So those are sort of some other areas, which we were looking at. But think as you’re hearing from this conversation, this is a very interesting space right now.
And we’re just getting started. If I was sort of, you know, go to your other side on terms of challenges, I think it’s hard for the investors and occupiers to make decisions they also come from the tech industry and budgets are much smaller frankly, people haven’t seen benefits in all cases.
So I think there’s a lot of work, not just in terms of creating the right products and solutions, get higher returns from the investments. I think that’s going to fuel the growth of the industry.
[00:28:45] Louisa D: Yeah, no, I agree with you, plenty of challenges, but like I said, when there’s plenty of opportunity as well. Now we are coming to the end of the podcast. How we sort of finish off LMRE Propcast, is we do L – a lesson learned in your career. M – mention anyone or product, just give someone a shout out. R – what’s been the most rewarding part of working within this industry and E could be, what are you most excited about?
So, Brad, do you want to kick us off with your lessons learned.
[00:30:20] Brad G: Sure. I’d say L is intrapreneurship is just as important as entrepreneurship. If you’re looking to start and build a sustainable and impacted business, I spent five years working in a traditional real estate before venturing out on my own.
So I’d say for anybody that’s listening today, who’s interested in starting their own company or engaging creatively in the real estate industry. You don’t need to start your own company to be an entrepreneur you can do so within a large organisation, just as easily
[00:30:45] Louisa D: Anyone you want to give a shout out to?
[00:30:48] Brad G: Sure. I want to give a shout out to our newest portfolio company. We just closed an investment in Aloft who’s reimagined real estate appraisals evaluations, which were obviously excited about.
[00:30:58] Louisa D: Amazing. And M, the most rewarding part working in this space Brad?
[00:31:03] Brad G: Definitely has to be working with our corporate partners.
Helping them identify, navigate, take advantage of all this new opportunity and intersection of real estate and technology and decarbonization is definitely where I get the most reward.
[00:31:15] Louisa D: Awesome, what are you most excited about looking at 2022 again?
[00:31:20] Brad G: I think it’s really stems around some of the things we discussed, it’s really that technology and de-carbonization isn’t is no longer part of a real estate corporates business.
It’s really becoming a core component, and really a true differentiator in a post pandemic world. So I’m excited that we’re finally at that, place and look forward to a more digitally native future.
[00:31:38] Louisa D: Awesome. Thank you for that. Brad, you cruised through, you can definitely tell you’ve got your own podcast.
Raj, your turn. Talk us through for your lessons learned, give someone a shout-out or product then talk us through the most rewarding part of working in this industry. And then what are you most excited about?
[00:31:54] Raj S: Yeah, absolutely. So, I think lesson learned is a proverb I heard a while ago that rings true from my own experience.
They say, if you want to go fast, go alone, but if you want to go far go together. And I think that in our industry, we really need to bring everybody along with us if this is going to work. So that I would, I recommend that way of thinking to anybody starting or even currently in the industry. In terms of mentions, I’ll just go back to Swift Connect.
So that’s, I think, you know, a super interesting company, I encourage people to check them out and see what they’re doing. And I think that they have a large role to play in the return to office and making that more flexible, in a hybrid environment, which I think is just the new reality.
The most rewarding aspect of working in PropTech, I think has been the discussions I’ve been having with big players in the field where I see that aha moment in their eyes where, you know, you see them getting it, you see them understanding how the application of technology can solve some of the challenges that they’ve been facing. And that’s really rewarding because you feel like, oh, okay. I’ve helped somebody to sort of see the broader picture a little bit and whatever it is that they decided to do it will at least be informed by having that understanding a broader understanding of what the perspectives are out there.
And then what am I most excited about? I think I’m just really excited that our challenge is our opportunity. If we represent such a huge part of the global carbon emissions, us making a small difference will make a huge difference. And so that’s where we start. And I think we’re just 2022 is the year where we have to put our money where our mouths are and say, this is what we’ve done.
And look, it’s making a difference and you help everybody else to do the same.
[00:33:32] Louisa D: Awesome. Thank you so much that now, Sharad, last but not least, talk us through, your lessons learned, mentioned anyone, rewarding part and what are most excited about.
[00:33:42] Sharad R: My lesson is really about change is good. I personally have changed careers, jobs, different industries, every three to five years of my life.
Currently in commercial real estate, in residential real estate, a lot of change is happening. And so if you’d like change, come join. In terms of shout out, I will shout out to Building Engines. We just recently, announced the acquisition of a very strategic, to automate buildings.
Rewarding aspect of working in PropTech. Now I feel if we do our jobs, right, we have the chance to make buildings more green or healthy or sustainable, make people more productive or happy.
And I’m excited about the change, but change the transformation we are driving, the opportunities that you just discussed are just tremendous.
[00:34:24] Louisa D: Yeah, thank you very much.
Yeah. We all have a part to play in this. So like you said, let’s put money where our mouth is. Unfortunately we’ve come to the end of the Propcast, but I’d like to thank you all for joining me. And obviously, like I said earlier, your support teams. For everyone listening, it is not easy to get these three men on a podcast cost together, especially during this crazy time of year.
But, I really enjoyed hearing what they had to say. And I’m looking forward to catching up with you after the show. Thanks again.
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