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Behind Tishman Speyer’s New PropTech Fund

There are few globally recognizable real estate brands but one of them is undoubtedly Tishman Speyer. Most people recognize this name because the company owns some of the most famous buildings in the world including Rockefeller Center in Manhattan. Those in real estate know that Tishman Speyer is an owner and developer of Class A space in 30 markets around the world. Now the famed company is earning more notoriety with its technology investment.

In January 2021, Tishman Speyer created the SPAC TS Innovation Acquisitions Corp. and merged with the smart-lock and building-management software startup Latch Inc. to help the company go public. This valued Latch at $1.56 billion and injected around $450 million into the startup. Latch later joined the Nasdaq with the ticker symbol LTCH. 

Now, the company has just announced a dedicated PropTech VC fund and raised $100 million for its investments. Propmodo spoke to Senior Managing Director Jenny Wong about the move. “We have a thesis that capital is a commodity, and we are bringing not just capital but strategic value to the table,” she said. Tishman Speyer is a vertically integrated property company so they have a lot of insights about the pain points in the entire life cycle of a building. “We spend a lot of time looking at construction tech because we are observing a lot of tailwinds or headwinds depending on how you define it, including cost escalation and tight labor markets, that are driving technology adoption in construction,” she continued. They are also currently very interested in technologies that help their portfolio with its ESG goals.

The breadth of Tishman Speyer’s portfolio, both geographically and between asset types also helps the company scale its portfolio companies. “We invested in a company, Meter, that initially talked to us about being a Wifi provider in our office spaces. Since then we have introduced them to our life science joint venture,” Wong said. They have also helped numerous companies get a foothold in new markets like Latin America and Europe.

Wong says that most of the fund’s investments will be in Series A or B rounds but they are willing to go into earlier rounds if it makes sense. “We deliberately sized the fund so we can continue to participate in the early stage sweet spot,” she said. With a 10-year investment horizon, the plan is to use about half of the money for investments in the near future and the rest for follow on investments later on. 

As much as Tishman Speyer is able to use its investment knowledge to help make its portfolio more efficient, the main purpose of the fund is still to return a profit. Many of the fund’s investors are the same groups that have invested in Tishman Speyer’s real estate portfolio so keeping LPs happy is critical. Tishman is not new to investing in technology but this time around is different. With a new fund and a lifetime of property management experience, one of the most recognizable property companies in the world is becoming one of the most recognizable PropTech VCs as well.

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