DealmakingM&A / FundingProptechReal Estate Tech

CBRE invests $100M, partners with VTS

CBRE says it will partner to launch the VTS platform, and give its brokers and property managers a technological edge in the market.

VTS, a commercial real estate intelligence proptech, today announced raising $125 million Series E led by CBRE, according to a press release.

The round includes $100 million in capital from CBRE, which joins the company’s board of directors as a result of the funding, and will be used alongside VTS’ recent $150 million debt financing round in March to accelerate product innovations, source strategic acquisitions and attract talent for team expansion in the U.S., U.K. and Canada.

The funding round also forged a partnership between CBRE and VTS to launch the VTS platform to give CBRE’s brokers and property managers a technological edge in the market. The platform will have integrations and improvements for its “agency leasing and property management teams” in the country, the release says.

The VTS platform utilizes first-party data sources to provide data analysis, leasing and marketing automation, property management and tenant know-how to investors in the commercial real estate market. CBRE says that now it will run its own office app, Host, within the VTS app, Rise. The VTS Platform is comprised of a number of commercial lease-based solutions, including VTS Lease, VTS Rise, VTS Data and VTS Market.

Additional participating Series E investors included BentallGreenOak, AmTrust, Brookfield Ventures, and Insight Venture Partners, according to the release.

The Wall Street Journal reports CBRE’s funding reflects its strategy to invest in technology-based startups instead of developing it within the company. 

Today, VTS manages more than 300,000 tenant companies, with over $31 billion in leases and 87,000 commercial and multi-family properties across 40 countries, as per the release. Its user base includes Blackstone, Brookfield Properties, BXP, and JLL, among others.

VTS valuation is now approximately $1.7 billion following the funding, according to the WSJ, representing a 70% increase since it raised $90 million and achieved unicorn status in 2019.

“Our investment in VTS is consistent with our strategy of partnering with exceptional companies that bring powerful resources to our clients and our people. We look forward to helping VTS accelerate their growth and to working with them to create a differentiated technology platform for our brokers, building owners, and tenants,” said Bob Sulentic, CBRE’s President and CEO, in the statement.

Sulentic told WSJ that as a result of the partnership CBRE will hand off its services to VTS, and will use VTS’ software to improve its own business functions. “One of the things we’re doing more and more aggressively is investing in companies that do things that we don’t do or do things better than we do,” he said.

Nick Romito, CEO of VTS, says the capital will support the company’s evolution from a single-product provider to a multi-product platform, in order to better serve the real estate industry. He also says it will allow its customers to provide a “tailored” user experience to tenants across their portfolios. 

“We look forward to expanding upon our long-standing relationship with CBRE, which shares this same vision in providing their people and customer base with technology that delivers a modern, portfolio-driven experience across all asset types,” Romito added in the statement. 

This investment represents CBRE’s previous investment in the proptech, following previous participation in 2016.

Recently, VTS also secured $150 million in debt financing from CIBC Innovation Banking based in Canada. VTS said in a statement it will use this fund to accelerate investments in its products and expand its market worldwide.

“As the industry races to modernize the office experience, integrating property management and leasing has never been more important and our partnership with CBRE is an example of that coming to life in a material way,” said Ryan Masiello, Chief Strategy Officer of VTS, in the release.

“From our perspective, these uncertain, almost a little scary times are the best times to deploy new technology,” Mr. Masiello said. “People will listen. They’re open to deploying new things,” Masiello also told WSJ.

In other recent proptech news, Innovative Industrial Properties, Inc. (IIP), the real estate investment trust, closed an acquisition of a 104,000 square foot industrial property in Webster, Massachusetts. Northmarq, a commercial real estate debt and equity provider, agreed to acquire the real estate brokerage firm Stan Johnson Company and Four Pillars Capital Markets.

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