In a world of machine learning you need to gain expertise

JLL announced Wednesday that it had acquired “Metropolitan Valuation Services (“MVS”), one of the largest independent commercial real estate and real estate consulting firms in the New York metropolitan area.”

The company noted that the acquisition adds 20 valuation experts to JLL’s existing 10, with MVS adding strength in “multi-housing, CBD and suburban office buildings, industrial/warehouse and retail/retail properties, land, transfers of ownership and market rent studies and appraisals for HUD section 8 properties” in the three-state area.

The potential also extends beyond having an additional experienced workforce in a hot and important CRE market. In today’s technology-infused real estate industry, the real benefit is what a company knows.

JLL has extended its customer contract with mortgage automation and decision system provider SpaceQuant in June. “SpaceQuant’s ability to extract, standardize and analyze real estate finance data, coupled with automated reconciliations and analytics, has already transformed our business,” said Fernando Salazar, director of wealth management at JLL, in prepared remarks at the time.

Having third-party data can be critical in automating processes and enabling more insightful analysis. But like anywhere technology is used, having software, hardware or data is not enough. Competitors can typically acquire the same unless a company owns its own data and know-how…or buys another company and may take that expertise off the market.

Businesses want an edge, and that means it’s important to have or do something that competitors can’t easily duplicate. The most fundamental ability is knowledge. Code can be duplicated or emulated. But knowledge and data? That takes much longer to acquire and digest.

The industry saw similar activity when: AXCS Capital bought George Smith Partners mid-June. The former is an absolute newcomer, with its inception in the first quarter of 2022. George Smith, on the other hand, according to the company, has been in business for 35 years and is known for its capital provision, structured finance services, fee-based advisory services and expert witness support. It has experience in hotels and resorts, industry, offices, senior housing, medical offices, land development, SFR, multi-family and retail.

It would be surprising for a company like JLL, which has an active VC arm, lacks the ambition to own the systems it runs on and empower them with insight that it hopes to keep it away from other companies.

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