It took the commercial real estate industry longer than some others to embrace technology advances, but it’s quickly catching up.

During the first half of this year, PropTech (real estate tech) firms raised $14 billion, according to a mid-year report by research and analysis outfit CRETech (Download here.). That total is a 309-percent rise from the same period last year.

As this sector of the industry matures, with certain players becoming more established, the number of companies funded decreased by 13.7 percent, t0 334 companies. However, average deal size jumped 50 percent, with average check sizes at $6.3 million.

One of the trends CRETech sees is large capital real estate funds getting involved in tech financing.

A recent deal is the closing of a $503 million fund by Fifth Wall Ventures, its second such vehicle. Its first fund, which totaled $212 million, included money from several commercial real estate firms in the brokerage, hospitality, industrial, multifamily, office and retail sectors. Fifth Wall, based in Los Angeles, used the money to invest in 27 companies, including scooter company Lime, as real estate firms said they were interested in financing transportation solutions.

CBRE and Hines are among the companies that put money into the second fund, which aims to target 25 enterprises with average checks between $10 million and $25 million.

Fifth Wall isn’t alone.

Metaprop, another example of PropTech investment, launched a $100 million fund earlier this year. The New York City-based firm’s past funds have been smaller, though investors have reportedly included big names in commercial real estate, such as CBRE, Cushman & Wakefield, RXR Realty and JLL.

Speaking JLL, it has its own tech-investment vehicle, JLL Spark. Launched in 2019, Spark has invest in such firms as Honest Buildings, a project-management platform; Livly, a multifamily rental platform; and Software Motor Co., which develops electronic motors for HVAC systems; among other enterprises.

Meanwhile, Cushman & Wakefield has partnered with MetaProp NYC to invest in more than 50 companies totaling in excess of $2 billion.

CRETech doesn’t see this funding boom slowing down any time soon. The organization says that it expects larger deal volumes concentrating on less firms, which could make it tougher for new startups entering the marketplace. It also sees more corporate venture capital getting into the fray.

One thing’s for certain, even if commercial real estate firms aren’t ready to embrace tech yet, it’s going to embrace them.

About GRS Group

GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.

Through the company’s proprietary management process, Global Services Connection, GRS Group delivers an integrated suite of services including Financial Advisory, Transaction Management, Assessment and Title Insurance.  We provide a single point of contact, capable of leveraging the GRS Group portfolio of companies and delivering customized solutions to assist our clients in achieving their investment goals.