crystalized what the opportunity set looked like, particularly inthe near term and somewhat in the medium term, saysSchwarzman. This exercise resulted in classifying opportunitiesinto three key categories.
METAPROP’S PROPTECH OPPORTUNITY BUCKETS:
• First category: A group of companies that were in motion andshowed early signs of acceleration. This healthy activity was notonly on the investment front but from the real estate customer sideas a whole or a fraction of the consumer marketplace (if direct toconsumer). These were categories within asset-level technologiesthat provided smoother operations in the COVID context.
• Second category: The companies that were in motion but facedheadwinds.
• Third category: Firms that were not previously in motion but
shortly thereafter were part of an explosion of activity in vendor-
ready tools. Those services were the topic of conversation at the
initial onset of the pandemic, enabling control, efficiency and flex-
ibility while providing for the customer experience.
“Many of these vendor-ready technologies are not the stuff we
would target for an investment but could be interesting to the real
estate community as applicable for a potential customer,”
Schwarzman said. “Some of the areas that were accelerating earlier
this year we would envision extending into the long term. In other
words, what we were interested in yesterday, we would be interested
in today. When you look at brick-and-mortar retail, food and bever-
age, and hospitality, those are attractive in the long term but were
not during the months following the pandemic’s start. But in terms
of hospitality, you’d better be sure you were backing a company
and team that had the wherewithal to survive.”
Other areas that found favor during the initial months of the
pandemic resulted in real estate technology and sustainability col-
liding, says Kitty Sullivan, investor of JLL Spark.
“During the COVID crisis, there was an increased focus on
improved indoor air quality and cleansing,” Sullivan says. “HVAC
plays a central role in ensuring that basically the building’s lungs
are functioning efficiently and improving the air, and decreasing
the likelihood of pathogens spread by recirculating the air.”
One of JLL Spark’s portfolio companies, HubbleHQ, a flex
space platform, released a survey earlier this year on what actions
employers could take so employees would feel more comfortable
in the workplace. Daily cleaning with antiviral agents and transpar-
ency about cleaning were by far the highest-rated responses.
Sullivan pointed out that the other force at play is the economicdownturn as a result of COVID- 19 that put pressure on buildingowners and operators to run more efficient operations at lowercosts. This presented a key opportunity for owners to upgradehardware and software in HVAC systems to achieve those cost savings. In the process, some areas of PropTech disruption wereuncovered, she said.
PROPTECH DISRUPTION BUCKETS:
• Technologies that make environments more sanitary. Thisincludes air quality but would also include robotic cleaners, janitorial services, etc.
• Prop Tech platforms that more broadly reduce the risk of contagion. Some platforms reduce contact with the physical building. i.e., keyless access controls where tenants enter buildingsthrough smartphones rather than touching buttons or pressingbadges to surfaces. Additional platforms such as VergeSenseensure employees and visitors are appropriate distances fromone another.
• Technologies that improve communication and facilitate remoteworking. Cloud-based collaboration platforms make processes