Tishman Speyer, one of the largest commercial real estate landlords in the United States with a 78 million square feet portfolio, recently created a $300 million special purpose acquisition company (SPAC) to invest in property technology (Proptech), Commercial Observer reports. The news comes after Tishman Speyer filed paperwork with the SEC on November 9. According to the filing, the SPAC will be focused on, “real estate adjacent businesses and technologies targeting the real estate space.”
This launch will allow Tishman Speyer to use its formidable presence in the real estate industry to operate as a strategic partner with technology companies. Investments will be made through the SPAC, TS Innovation Acquisition Corp.
“We believe that the network of contacts and relationships of our management team will provide us with an important source of acquisition opportunities,” the IPO filing said, according to The Real Deal. “In addition, we anticipate that potential targets will be brought to our attention from various unaffiliated sources.”
The company has looked into Proptech investing before. Tishman Speyer has an innovation department that’s invested in companies like data platform VTS, mobile app Ritual, data visualization platform Openspace and supply chain company Agora, Commercial Observer reports. Tishman Speyer has invested in 11 Proptech companies during the last three years after it evaluated 130 potential companies, according to the SEC filing.
This SPAC is new territory for Tishman Speyer, however. In fact it is one of the first institutional real estate firms to attempt this strategy. Interest in SPAC’s has been mounting recently though—they have accounted for about half of the Initial Public Offering (IPO) activity in the U.S. this year, according to SpacAnalytics. More than 170 SPAC’s have been created this year, looking for $63 billion the data said. SPAC’s, which gained popularity in the 1980s, are in part appealing because they have no underlying assets and offer a prime opportunity to merge with a desired company and take it public.
SPAC’s are not a new concept in the CRE industry, however. In September, investor Chamath Palihapitiya announced he’d acquire online real estate sale platform Opendoor through his SPAC, Social Capital Hedosophia II. The acquisition made Opendoor a publicly traded company. It also showed that late-state tech companies can use SPAC mergers to sidestep traditional IPO’s and the potential failure like WeWork experienced last year.
Joe Dyton can be reached at email@example.com.