- JLL plans to buy building operations software company Building Engines for $ 300 million.
- Building Engines, which manages 3 billion square feet, brings a large data set and customer base to JLL.
- A JLL executive said the acquisition would help “accelerate” the “fragmented” proptech space.
JLL, one of the world’s largest real estate services companies, plans to acquire Building Engines, a Boston-based building operations software company, for around $ 300 million in cash, Insider can exclusively reveal. The deal is expected to be finalized in the fourth quarter of 2021.
Building Engines, founded in 2000, has created a range of software tools to help owners and operators manage both the equipment that powers properties – like heating, ventilation and air conditioning – and the suppliers that maintain these systems. The company, which now serves more than 1,000 clients at 35,000 properties and 3 billion square feet, has integrated its tools into a single platform, called Prism.
The company will operate under the umbrella of JLL Technologies, and CEO Tim Curran will become the executive general manager of Building Engines.
The deal came about as Building Engines looked to raise more capital to accelerate its growth, Curran said. The company had been “seeded,” said Curran, originally founded with just $ 1 million in capital, before the company raised private equity funds from Wavecrest Growth Partners in 2016, a year before Curran becomes CEO.
“We were thinking about who will take us to the next phase of growth,” Curran said. “It could have been a new financial sponsor, who would have brought a lot of expertise in running a software company, but we would never have benefited from JLL’s expertise in the industrial field to satisfy our customers.”
Curran said the company was choosing between a few potential partners, but JLL was the “obvious choice.”
The two companies already have a long working relationship as both share several clients.
“The majority of our investor clients use Building Engines in some way, form or form in a segment of their CRE portfolio,” said Jay Koster, president of capital markets and investor services at JLL . Building Engines will continue to serve existing customers who do not work with JLL.
Building Engines has an open application programming interface, or API, that allows it to connect to other building operating tools. He has already built integrations with 30 tools. Koster told Insider that this open approach, along with the acquisition and resources of JLL, will help address fragmentation in the proptech world.
“In a space like proptech, with over 8,000 companies, we believe that bringing together a major construction operations platform with our real estate operations platform is a way to accelerate the entire proptech. “said Koster.
There is another benefit for both parties: the data. Curran told Insider that Building Engines has generated a lot of data – like how a building’s HVAC system works when workers return to an office – but has yet to develop the tools to make sense of it. Building Engines will use JLL’s investment and the launch of JLL’s business intelligence system, Azara, designed to empower investors to make decisions using vast expanses of data, analyze and use that data for clients .
“Building Engines is the registration system for these buildings,” said Sharad Rastogi, president of JLL Technologies. “They have a very large footprint and bring us the largest data set in construction operations.”
