Brookfield Buys SVB's Venture Portfolio

Defining the future of real estate

Author

Franco Faraudo
May 06, 2024

Propmodo Daily

By Franco Faraudo · May 6, 2024

Greetings!

Today’s newsletter is brought to you by Partner Engineering and Science, Inc. Tired of equipment failures and budget surprises? A Facility Condition Assessment (FCA) may be your solution. Join Partner's webinar this Thursday to learn how.

Silicon Valley Bank's downfall sent shockwaves through the financial industry. While a widespread collapse of regional banks seems unlikely, the aftermath of SVB's bankruptcy is still unfolding. Last week's sale of its venture investing arm to Brookfield and Pinegrove Capital Partners (funded by Brookfield and Sequoia) offers insights into the future of the PropTech industry. In today's email, we will analyze the deal and consider its potential implications.

We're seeing a shift away from the pandemic-era trend of people leaving major coastal cities for the Sunbelt, suggesting the 'urban doom' narrative was a bit exaggerated. Recent trends show growth in both major cities and promising markets like Jacksonville, Florida, and Provo, Utah. Our new article explores how real estate investors are adapting to these demographic shifts.

This week in Propmodo Technology, we're exploring how technology is driving the rise of flexible office spaces. Plug-and-play solutions like phone booths and meeting rooms offer quick adaptability to changing work needs. Large office owners are embracing tech-enabled co-working and flex spaces to support hybrid work models. Finally, we'll investigate why an on-demand 'Class Pass' model for office access hasn't gained widespread popularity yet.

Now, let's dig in!

Brookfield Buys SVB’s Venture Portfolio

Silicon Valley Bank's collapse continues to reverberate over a year later, with its assets now being parceled out. A significant milestone has been reached with the sale of SVB's Silicon Valley Capital venture investment arm. Set to be spun off for $340 million, according to bankruptcy documents, the buyers are Brookfield and Pinegrove Capital. Pinegrove Capital is shrouded in some mystery online, but their backing comes from Brookfield and influential venture capital firm Sequoia.

The exact value of the acquired venture portfolio remains unknown (who knows the real value of a startup anyway?). Reports indicate the division hasn't been profitable and endured significant layoffs since SVB's collapse. This makes the $340 million price tag seem surprisingly high, especially considering the risks of venture investing in the current economic climate.

This acquisition marks a substantial bet for Brookfield. Their existing venture capital arm, Brookfield Growth, has already invested approximately $300 million in tech (with a focus on PropTech) over the past four years. This latest deal could nearly double their exposure to early-stage tech companies. While still a relatively small portion of their $900 billion portfolio, this signals positive sentiment towards the property technology industry.

Given Brookfield's core expertise in real estate, it's logical to assume they'll prioritize investments that align with their existing ecosystem and business model. This could mean a potential boost in funding for PropTech companies.

Your Capital Plan is Failing. Is Your FCA the Problem?

How’s your capital plan working for you? Tired of unexpected equipment failures and budget surprises? There’s a solution. Done right, a Facility Condition Assessment (FCA) is your secret weapon for smarter, more proactive facility management.

Forget reactive repairs. Stop struggling with runaway projects. A well-executed FCA is your roadmap for predictive maintenance and strategic capital planning. In this webinar, top experts will show you how to get an effective FCA and, more importantly, how to use it to reduce risk, get a real-time picture of facility health, and boost performance metrics across your entire organization – from the maintenance team to the C-Suite.

Featured Article

New Data Shows America’s Biggest Cities Are Slowly Coming Back to Life

Recent U.S. Census findings suggest a significant slowdown in the exodus from major American cities, with some areas even witnessing modest population growth. The data highlights shifting migration patterns, particularly notable in Sunbelt regions and major urban centers like New York and Los Angeles. Factors such as international immigration and economic fluctuations are reshaping urban demographics, presenting fresh perspectives for real estate investment strategies.

READ ONLINE: https://propmodo.com/new-data-shows-americas-biggest-cities-are-slowly-coming-back-to-life/

Insider Insights

🫨 Faulty construction: A development project next to the iconic Capital Records building in Hollywood is being scrapped because of a lawsuit over the location of a seismic fault in a geological survey.

👋 WeGone: City Office REIT has reported increased tenant demand for office space and a drop in vacancy but downgraded their financial projections, partially because WeWork has decided to pull out of two of its locations.

Propmodo Live Webinar

Which Cities Are Still Thriving Even With Low Office Occupancy?

The office market is in flux, with some cities suffering far more than others. Join our discussion with Caroline Wu, Director of Research at Placer.ai, to learn which cities are hardest hit, how it impacts other property types, what strategies help downtowns recover, the success of office conversions, and where the office market may be headed.

REGISTER NOW: https://propmodo.com/which-cities-are-still-thriving-even-with-low-office-occupancy/

Overheard

Propmodo Technology: Flexible Office

How Office Owners Are Using Tech to Run In-House Flex Spaces

As the co-working industry has evolved, office owners are increasingly creating their own flex and co-working brands. To operate and manage these platforms, many owners are choosing to partner with software companies to build in-house apps that promise a seamless experience for users of the space. 

READ ONLINE: https://propmodo.com/how-office-owners-are-using-tech-to-run-in-house-flex-spaces/

Technology Is Helping Offices Get Ready for the Next Revolution of Work

The pandemic accelerated the need for adaptable offices, as hybrid work became the norm. Uncertain about the future of work and potential disruptions like AI, businesses are creating flexible spaces with modular designs. This allows for easy reconfiguration in response to trends like increased technology needs and a desire for informal, collaborative environments.

READ ONLINE: https://propmodo.com/technology-is-helping-offices-get-ready-for-the-next-revolution-of-work/

Will a 'ClassPass' for Co-Working Ever Catch On?

The co-working industry is growing, but it lacks a dominant all-in-one provider like ClassPass in the fitness industry. The high average transaction size for co-working memberships, frequent closure of co-working spaces, and a shift of focus away from dispersed workplaces for company employees have all presented challenges. While attempts have been made to create a co-working space aggregator, none have found the success of ClassPass. Will anyone ever make the model work?

propmodo.com/will-a-classpass-for-co-working-ever-catch-on

Are You Enjoying This Newsletter?

Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

📧 Forward it to a friend and suggest they check it out.

🔗 Share a link to this post on social media.

🗣 Have ideas for future topics (or just want to say hello)? Share your feedback and tips at [email protected] or connect with us on X through @propmodo.

✅ Not subscribed yet? Sign up for this newsletter here.

📫️ Please add our newsletter email, [email protected], to your contacts to make sure you don’t miss any updates.

Explore Propmodo

Enjoy reading about trends and innovation in commercial real estate? Subscribe to Propmodo.com for unrestricted access to reliable, data-driven journalism and exclusive insights available only to subscribers.