CBRE’s Vikram Kohli On Big Real Estate’s Big Proptech Moves
The global group president of business intelligence at the brokerage giant oversees its technology uses and investments, including a $100 million bet on VTS
In September, commercial real estate services and investment giant CBRE announced it had invested $100 million in VTS, an asset life cycle management platform, and one of the most successful and fastest-growing companies in proptech.
Vikram Kohli, global group president of business intelligence, oversees technology integration at CBRE, where he climbed the ranks in the Southeast Asia market over the last 20 years, assuming his current position a little more than a year ago. In that role, Kohli brings his extensive global real estate business knowledge to the day-to-day shepherding of CBRE’s approximately 3,000-member global technology team, which reports to him, and in such big tech deals as the investment in VTS.
In addition, as a non-technologist, Kohli is unique among major commercial real estate executives in having the company’s technology group report to him, but he sees that as an advantage for the firm’s tech users, clients and techies as well.
Kohli spoke to PropTech Insider in late November from CBRE’s headquarters in Dallas.
The interview has been edited for length and clarity.
What led CBRE to make such a huge investment in VTS?
VTS is one of the most successful proptech companies in our sector, especially in the corporate space, where we’ve seen a lot of churn. And this is one of those companies that has stood the test of time. That technology has also redefined our industry professionals and even mind space. Our investment in VTS is consistent with our strategy of partnering with external companies that bring powerful resources to our plans and our people. We also want to help them accelerate their growth and want to create a differentiated technology platform for our brokers and clients. So it’s a combination of strategy and the investment by itself.
How was the aim of the relationship between the two companies?
At a macro level, the partnership gives our people access to a marketing technology platform. It creates some unique integrations with CBRE’s systems, and that gives a better end-user experience for our people. For our clients, a partnership like this also creates more differentiated insights than one would normally get. It puts us in a strong position to bring this kind of technology and innovative solutions to our clients as well as our professionals. And it is in sync with our technology strategy, which is to build, buy, partner and invest to create differentiation. We’re not focused on just building everything on our own. We’re open to partnering and investing, and this fits into our overall strategy.
What was the initial value CBRE saw in VTS? Has that value been met in ways you originally envisioned, or has it morphed?
It’s for our professionals and company internally to draw some insights out of and also for our external customers. We use VTS primarily as a broker workflow tool on the internal side to ensure workers have access to data and insights that help them in terms of aiding clients better. For external clients, which is a landlord community, it gives a better view on the tenant experience side — you know what is actually happening inside the building and what’s happening as new tenants come in. So it’s a good internal tool from a workflow standpoint and a good insight tool for our clients to be better operators.
Coming out of COVID, the return to office is still below 50 percent in a lot of markets, including New York City. What’s the value-add of VTS in this framework?
The big value-add is understanding what’s going on in the tenant community in your buildings. What are workers thinking? How often are they coming back into the office? What days of the week are they coming back? It allows landlords to really understand what’s happening with their portfolios. It gives better data insights, which is what landlords want right now. I think that’s really important.
What it also does is it helps our brokers in understanding what buildings are working with certain types of tenants and what buildings are not. It gives us a better sense of what’s going on in the marketplace. One of the areas VTS is working on is authentic experience through the VTS Rise app. What that does is combine with our property management business to give a much better view for the landlord. So there’s different ways in which to vary the tool itself, and landlords are thinking about how to improve the occupancy of some of the buildings through these insights.
CBRE has been known to acquire companies that it likes outright, proptech startups as well as more traditional firms. Why not VTS?
To reiterate, our strategy is to build, buy, partner and invest to create differentiation in technology. That’s an overarching theme in the way we invest in proptech. VTS was doing a funding round and we had an opportunity to be the lead investor in that round. So we contributed $100 million out of the $125 million funding round. So that was the context on why we didn’t buy them outright. I think it’s also important for us that VTS maintains its culture and autonomy. It’s a growing company.
We have taken positions in a number of companies before. If you look at our track record over the last couple of years, especially in proptech, the context behind this investment was that we were the lead investor, combined with our strategy that some of these companies need the autonomy and culture they developed, which is important for their growth. We respect that.
Is this an example of the next level of the development of brokerage services? Are you in effect outsourcing CBRE’s basic functions to proptech firms like VTS?
CBRE provides exceptional real estate services to our clients on the advisory side. That’s our core business. Where proptech comes in is for us to enhance that core service that we provide to our clients. As a result, I don’t think of this as outsourcing as much as I think of it as enhancing what we provide to our clients. I think we will always follow the compass that if something can be done better by a third party, as we enhance the service we will always be open to options like that. At the end of the day, we are in the advisory business. We are in the business of providing great insights and knowledge, and whatever can help in accentuating that is the path we will follow.
Do you foresee brokers and other members of CBRE needing to engage with companies like VTS on a more regular basis becoming more intrinsic to their work?
Yes. For all professionals who are a part of this business, being closely in touch with what’s happening with these companies and using that to drive great insights, to provide better advice, is just an evolution of the industry — like it’s happened in the financial services industry. I think real estate is going to do the same thing. It doesn’t take away from the importance of the individual or the team that’s serving the client. I think that’s been paramount. But the tools that they have at their disposal now are far greater than what they were before, and it would be remiss to not use them because you’d be doing a disservice to your clients.
What is CBRE’s overall view of the proptech startup world?
As a philosophy, we encourage market innovation. We think if the industry innovates, if the industry evolves, everyone wins. We win a big part of the industry. So I think it’s good for everyone. You’re constantly looking at technologies that can enhance your business. As I said earlier, I think we’re always looking at opportunities to buy, partner or invest in what can help our business. So we invest in proptech funds, climate tech funds, focused VC funds on the technology space, and to find companies that we can help scale and grow, which also enhance an offering for CBRE to its clients.
You grew up professionally on the business side of CBRE. How did you get involved in your current position, overseeing technology and doing deals like funding VTS?
I’ve worked in multiple geographies in Asia and multiple cities in the U.S. I’ve also been involved in various parts of the business running marketing, leasing, outsourcing strategy, deploying technologies. Much of my experience has been more on the business side rather than on the tech side. When I’ve interacted with technology, it was as an end user, or someone who’s using it in the market to drive growth. Also to deploy it, rather than development.
What transpired was a strategic move by the company where we wanted someone who was from the business side to start focusing more on the platform and on the technology side, because often we hear there’s a disconnect between what the business wants versus what technology is delivering. My role is to bridge that gap. I have great people on the technology side that are behind a lot of the thinking on what we’re doing, but what I bring to the table is the connection with the business side. I feel like my value comes from being in the business and connecting the dots between technology research, finance and strategy. So that’s a very exciting and interesting combination, and that’s what we try to leverage.
Philip Russo can be reached at email@example.com.
UPDATE: This interview was updated to reflect the correct employee count for CBRE’s technology arm.