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Year-end reflection from JLL Spark

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Hello! It’s the happiest season of all! The JLL Spark team made our 2023 predictions on January 5th this year, and it’s time to see how we did. 

And, well, we got a lot of it right. The team thought that it would be a tough year for non-Class A office space, that climate and sustainability would be important drivers of demand, and that AI would prove to be an invaluable tool in the commercial real estate industry. How right we were, and yet, how wrong as well. We thought money would continue to pour into the PropTech space, and although we thought interest rates would be an issue, the size of the problem took us by surprise, to say the least. 

As always with VC, there is luck and timing as much as there are smarts and great business plans, teams and execution. The smartest team focused on solutions for office is likely to have had a difficult time selling into a market where (in the US certainly) ‘return to office’ largely continues to be a CEO’s dream rather than the reality. Luck plays a role when, if you raised a large round 12 months earlier and took measures to significantly cut burn, your chances of surviving 2023 and 2024 are much improved, and ‘thrive in ‘25’ is a realistic prospect. 

Here at JLL Spark, despite the gyrations of the market, we still see a fundamentally healthy ecosystem for PropTech. The reasons why owners and occupiers might adopt technology are, if anything, more obvious and numerous than ever. While not every business is in the real estate business, real estate is in every business, and ensuring you get the most from the property you use, office, industrial, multi-family and so on, is increasingly a topic of conversation at the highest levels, especially given the associated financial investments businesses have made in the sector. 

While the need for technology is clear, what is also evident is that technology alone is not sufficient to provide the benefits we are all seeking. Establishing a plan is fundamental, but it is important to recognize that successful technology adoption requires the right people and the right set-up to maximize the value that technology can bring them (something that the adoption of AI will bring home in spades). This area of HR is something we as a sector have much work to do to improve our focus and ability to attract and develop the right people in our organizations. With great technology comes great expectations, and they can only be realized if we know what we are doing… 

We as a team are always grateful to our colleagues in the JLL Technology division and the broader JLL family for their partnership, wisdom and willingness to introduce exciting new startups to JLL’s clients in search of the innovations that can make a difference. Together we can further the mission of making JLL into the premier tech enabled services provider for the industry. Happy holidays to all! 

Written by Raj Singh, Managing Partner at JLL Spark

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