This Research Note examines the emerging strategic priorities of JLL in the smart commercial buildings space. We have mapped M&A, divestments, strategic partnerships and investment activity to ascertain the growth ambitions of the company, by categorizing the various business relationships by technology and investment type over a 3-year period.  This article, Part 1 of a 2-part analysis, is intended as a non-exhaustive indicator of JLL’s strategic direction between January 2020 and September 2022. 

JLL is one of the largest real estate service providers in the world, with 2021 revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 100,000. Founded in 2017, JLL Spark, their strategic investment arm, has invested more than $340 million in over forty early-stage PropTech startups.

The JLL Spark team, now part of JLL Technology, focuses on five investment themes relevant to JLL clients and the real estate industry, identified through client demand and adoption trends, including Smart Buildings. Note that this Research Note focuses on JLL partners offering technology for the operations and maintenance phase of the commercial real estate lifecycle.

Our strategy mapping exercise highlights 3 partnerships, 6 acquisitions, 1 divestment and 11 venture capital investments of relevance over the last three years. 

The commentary below highlights some of the recent investments and partnerships in IoT in Buildings, CRE Operations & Maintenance, Energy Efficiency and Renewable Energy sectors.

Acquisitions

In July 2022, JLL announced the acquisition of Envio Systems, a Berlin-based technology startup that offers an IoT platform providing predictive analytics and building automation. Founded in 2013, Envio’s hardware and software enable access to and analysis of data from sensors and applications across systems and functions to facilitate predictive decision-making around utilities and operations, health and comfort, and sustainability – regardless of existing installed equipment or technology, building size or age.  Envio technology will form the foundational infrastructure of a differentiated platform for delivering intelligent and sustainable building operations. This acquisition will also integrate with and enhance recent investments in technology-enabled service delivery, including Dynamic Occupancy Management and Dynamic Cleaning. 

During 2021, JLL strengthened their technology capabilities and broadened their offerings by acquiring:

• Skyline, an artificial intelligence technology company which uses proprietary machine learning models to gain a competitive advantage in the origination and analysis of real estate opportunities.
• Building Engines, a building operations platform which serves as a comprehensive system that unites applications used to run buildings in one place, streamlining work orders, making maintenance more efficient, and simplifying interactions between building tenants, management and staff. Prior to being acquired by JLL, Building Engines announced two acquisitions in 2021:
  • Ravti, a provider of software which automates tenant compliance for HVAC equipment maintenance;
  • LogCheck, an application that helps streamline rounds, inspections and preventive maintenance tasks.
• Hank, a virtual engineering platform focused on sustainability. Hank uses machine learning and AI to optimize building energy efficiency, air quality, maintenance costs, and tenant comfort, which ultimately delivers opportunities to reduce operating costs while accelerating the achievement of buildings’ sustainability goals.

Investments

• In March 2022, JLL announced its Dynamic Cleaning offering in partnership with Infogrid and their complete range of offerings feature on JLL Technologies web site.  Founded in 2018, Infogrid combines small IoT sensors with AI to optimise and automate facilities and building management. JLL Spark participated in a $15.5 million Series A funding round in Infogrid in November 2020.
• JLL Spark participated in a June 2021 $225 million financing round for Turntide Technologies, which is tackling a reduction in carbon emissions and costs in existing buildings today. By replacing traditional motors with Turntide’s Smart Motor System, the company claims a reduction of around 64% in a building’s energy usage.
• In April 2021, JLL Spark participated in a $9 million Series A funding round in Safehub, which builds sensors and analytics software to deliver real-time building-specific earthquake damage information.

Partnerships

• In December 2021, JLL announced a strategic partnership with renewable energy platform LevelTen Energy. The alliance allows JLL clients to transition to clean energy by simplifying the power purchase agreement (PPA) process with domain expertise, market access, technology and analytics. Combined with JLL’s onsite renewable energy services, this partnership for procuring offsite renewable energy enables the firm to provide JLL clients with a solution to decarbonise their energy supply as a key element toward meeting their carbon reduction commitments.

Part 2 of this Research Note will examine the emerging strategic priorities of JLL in Workplace Management.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.