The two leading service providers in the global Commercial Real Estate (CRE) market have been augmenting their capabilities in smart building technologies, facility management software and services. Major real estate clients are demanding a “one-stop shop” with more integrated services and global multi-site capability. Strategic acquisitions have been the main route to acquire this capability.
CBRE manages approximately 5 billion square feet of commercial real estate and corporate facilities around the world. In April 2015 they acquired Environmental Systems Inc, a US building systems integrator and energy management service provider having a well established Building Performance Manager portal, powered by SkyFoundry.
They followed this up some six months latter when they acquired the former Johnson Controls facilities management business, Global Workplace Solutions. They established a 10 year strategic alliance with Johnson Controls who will offer a factory-direct relationship on HVAC equipment, building automation systems and related services to CBRE for its managed properties. In addition, the companies will jointly fund an innovation lab that will develop leading-edge energy management solutions to lower costs and enhance their real estate clients’ work environments.
In January this year CBRE announced that it has acquired Floored, Inc. A leading producer of SaaS (Software as a Service) solutions, including scalable, interactive 3D graphics technology for the global commercial real estate industry.
JLL, who provide management and real estate outsourcing services for a property portfolio of 3.4 billion square feet worldwide, have been expanding their portfolio over the last five years to include expertise in energy efficiency and sustainability consulting, smart building integration systems, HVAC monitoring and space utilization software, smart lighting controls and facility management SaaS.
Recent acquisitions have included, HFM, a Toronto-based company with 25 employees specialized in building commissioning. By acquiring HFM, JLL aims to expand its comprehensive energy efficiency services in North America, including its Intellicommand smart technology tool, with a skillset that addresses the growing needs of building owners and tenants.
CoR Advisors, a US smart building systems integrator was acquired in June 2015, in order to complement and augment JLL’s growing focus on high-performance building technology solutions through IntelliCommand, a facility management software system that works to reduce energy needs in office buildings, data centers and retail sites.
The building system is now used in more than 120 buildings, representing approximately 30 million square feet. In December 2015 they acquired Corrigo, a company providing cloud-based facility management solutions. The company’s Computerized Maintenance Management System (CMMS) is used by 1 million people to manage 10 million work orders each year across more than 180,000 sites.
These two major corporates are not the only commercial real estate firms that see the need to acquire software based companies in order to offer full integrated services to their clients. A recent Memoori report Startups and Their Impact on Smart Buildings identifies fundamental change in the last two years in the nature of collaboration between the established incumbents in the smart building space and early stage startups, which is now regarded by many players as being critical to their respective success.
Corporations and startups have begun working together in fundamentally new ways, with a focus on flexible, early-stage, open-ended partnerships. Previously, interactions primarily began at the negotiation table.
Previously, corporations were well versed in acquiring startups, but only when the startup has already proven its value to the acquirer. Now both startups and corporations recognize the benefits of earlier interactions, through accelerator and incubation programs that will help to improve the success rate of startups.
This article is based on our recent report The Market for Building Performance Software 2016 to 2020.