More so than at any time in the past, real estate is ripe for disruption, following a pandemic that forced many people to stay away from the office, and some now choosing not to come back. So, what to do with all that space and how to configure it to deal with remote workforces? That is one of the questions that will now shape the form of large office spaces.
The frontlines of the evolving commercial real estate and proptech markets is the latest post for Raj Singh, a venture capital industry veteran of more than 20 years.
He previously spent five years as managing director at the then-named JetBlue Technology Ventures, following previous investing stints at Pervasive Technology Ventures and Investcorp International. He took a five-year break from venturing between 2010 and 2015, when he headed up an innovation-focused consulting firm and then a business services marketplace.
Despite the many years he has worked in innovation and venture investing, Singh says the constantly changing technological landscape is more than enough to keep him interested. Although real estate is one of the industries that has so far avoided the brunt of digital disruption, technology changes are beginning to creep into the sector and Singh believes it will not be long until it hits it head on.
“I am motivated because I am convinced that technology will eat commercial real estate, and I want my organisation to not only survive that, but to ride that wave. In every other industry that has happened, and that is coming for us,” he says.
Working with startups specifically is something he enjoys doing, particularly in an industry such as real estate. The consistent success of the real estate sector over a long period of time has meant that many companies tend to rest on their laurels and have become too comfortable, without needing to innovate. In this context, it becomes crucial to find the creative thinkers and industry disrupters that are pushing the real estate industry forward.
I am motivated because I am convinced that technology will eat commercial real estate, and I want my organisation to not only survive that, but to ride that wave. In every other industry that has happened, and that is coming for us
“I believe that those people who make strange and unusual predictions about the future often turn out to be right,” he says.
“I like the engagement with those people. I like learning and seeing a different perspective because I know that I and everybody else who have been in an industry for a while can often get complacent. You just accept and believe certain things which are not necessarily true. They are just the way that things have been done in the past.”
The market may be in a downturn, but Singh believes it would be a mistake for investors to stop deploying capital. It would leave a gap in the portfolio, which will remain as a fallow period for returns even after the market goes back on an upswing. This is true of both financial and strategic returns.
JLL Spark has continued to invest in 2023, with recent investments including backing the $90m series B funding round for Infogrid, the maker of a sustainability- focused smart building platform.
For entrepreneurs this is a great time to start a company if you keep it small, lean and without great expectations of getting revenue right away, says Singh. He advises young startups to think about how to get themselves into a position to make the most of the eventual upturn. If you are not in a position where you have recurring revenue, he says, then focus on putting all the pieces in place to come out swinging when things are looking up again.
“How do I redirect my products such that when the market comes back, I am in prime position to go out there and disrupt? It is less about revenue now, more about building,” says Singh.
For slightly more mature startups, however, this is a time to be more conservative and for survival mode. Getting through this macroeconomic rough patch likely means having to come down on the burn rates, which will be painful but necessary. “Focus on renewing your current customers and adding value to the product,” says Singh.