Real estate giant JLL buys Boston real estate software company Building Engines for $ 300 million
It’s been a busy week for two of Boston’s best-known real estate software companies, Building Engines agreeing to be sold to Chicago-based real estate giant Jones Lang LaSalle and HqO announcing the acquisition of a European rival.
JLL announced Thursday that it will buy Building Engines, a maker of property management software, for $ 300 million. The company’s current management team of 150, led by Chief Executive Officer Tim Curran, is expected to join JLL’s software arm of approximately 3,000 people, JLL Technologies, after the deal closes later this year. . Building Engines, which was founded approximately two decades ago, serves over 1,000 clients and over 35,000 properties.
The company’s software helps owners manage and coordinate everything from visitor registration to equipment replacement. JLL is one of its largest customers and many JLL customers also use its software.
Curran said Building Engines has more than tripled in size, measured by people and revenues, since 2016, when private equity firm Wavecrest Growth Partners invested in it. Other investors that are being cashed in include River Cities Capital, MassMutual Ventures and Camber Creek. He said a number of private equity and real estate firms looked at Building Engines when it launched on the market earlier this year.
“We wanted a bigger partner, whether it’s a private equity partner or a strategic partner to take us into the next five years, the next 20 years,” Curran said. “We had a lot of choices. JLL was the perfect home for us.
Jay Koster, president of investor services at JLL, said Building Engines sets itself apart in part by its global reach, in 50 countries. He said Building Engines would also provide JLL with a treasure trove of construction operations data.
Landlords are increasingly turning to these “proptech” companies to improve the tenant experience and gain efficiency.
“We are seeing buildings become more like a computer, more automated,” said Sharad Rastogi, who heads JLL Technologies.
HqO Managing Director Chase Garbarino said many of his clients also use Building Engines software; HqO’s app is designed to be tenant-oriented, with features like ordering food and booking fitness classes, while Building Engines is more focused on back-of-the-house infrastructure. “.
HqO has not disclosed how much it pays for the European company, Office App. However, the Boston-based company said it is now valued at more than $ 500 million, a sum that includes both the price of the Office App offering and the valuation of its latest investment cycle. With Amsterdam-based Office App on board, HqO now has around 200 employees. Although HqO has clients in the UK and France, it has tried to expand significantly in Europe, Garbarino said. Having Office App in 24 countries will allow HqO to do just that.
HqO’s new investors in the $ 60 million round in April included global real estate brokerage Cushman & Wakefield and construction titan Boston Suffolk. JLL is also one of the investors of HqO.
“COVID has accelerated the adoption of the technology,” Garbarino said. “If you’re going to an office, it had better be a hell of a good experience, and a lot of that has to be powered by technology. … owners and managers are just going to have to step up their game. “