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Heightened demand for smarter, more efficient buildings has spurred the growth of enhanced building automation capabilities. As organizations seek to integrate advanced technologies like the internet of things, artificial intelligence and cloud-based platforms to optimize energy use, improve space management and boost tenant experiences, the smart buildings M&A landscape has become increasingly dynamic.
The space has been a hotbed for dealmaking as legacy building operators look to obtain capabilities to expand into new verticals and geographies, as well as enhance their ability to retain customers. In this report, we examine the role of automation technologies in transforming building operations and outline how the sector is evolving to meet increasing demand for sustainability, energy efficiency and seamless connectivity.
The Take
AI and machine learning have played a role in building operations for decades, initially through fault detection and diagnostics, predictive analytics, and dynamic energy optimization. In most of these cases, the data produced would address a problem but be unable to act on the decision it recommended in response. Automation tools require the integration of data across building systems and applications to not only get contextual data on the issue — e.g., indoor temperature too high, upcoming energy price hikes — but respond proactively.
Several factors are accelerating the shift from passive insights to automated action, including the rise of cloud-native platforms, heightened standardization of building system protocols, increased availability of real-time data, and the convergence of information/operational technology (IT/OT) infrastructure. These developments are facilitating more scalable, cross-system coordination — enabling buildings to dynamically adjust HVAC settings, shift energy loads, or trigger maintenance workflows without human intervention. As a result, building operators can deliver greater energy efficiency, occupant comfort and operational resilience, while also reducing the burden on stretched facilities personnel.
Context
The smart buildings segment is characterized by a variety of stakeholders. IT teams, OT experts, facilities managers and human resources personnel can all make decisions regarding technology adoption and strategy for their sites, namely in the face of sustainability and hybrid work arrangements. Broadly, drivers for smart building deployments fall into three main buckets:
- Sustainability and efficiency. Organizations are under increasing pressure to meet energy-efficiency goals and comply with sustainability regulations — both internally and externally imposed. Smart building technologies support these efforts by providing granular energy consumption data, enabling demand-based HVAC and lighting control, integrating distributed energy resources, and supporting environmental, social and governance (ESG) reporting.
- Safety and security (physical and cyber-physical). As buildings become more connected, ensuring both physical security (access control, surveillance) and cyber-physical security (protecting IoT/OT devices and networks from breaches) becomes crucial. Smart systems allow for real-time threat detection, emergency response coordination, anomaly detection and multifactor integration, boosting both occupant safety and the resilience of critical infrastructure.
- Tenant experience. In competitive commercial real estate markets, tenant satisfaction has become a strategic differentiator. Smart buildings enhance the user experience via personalized environmental controls, mobile-enabled amenities, indoor navigation, occupancy-based services and frictionless access. By facilitating data-informed facilities management, building owners can anticipate needs and deliver better service, spurring tenant retention.
Beyond the internal silos that often exist between building operations, facilities management personnel and IT teams, a wide array of external stakeholders have also demonstrated heightened interest in the smart buildings segment. These include IT service providers seeking to extend digital infrastructure into the built environment; architecture, engineering and construction (AEC) firms looking to differentiate through post-occupancy value; and energy specialists aiming to optimize efficiency and sustainability outcomes. Real estate service providers are also playing an increasingly influential role in the smart buildings ecosystem.
These businesses are moving beyond traditional property management to offer tech-enabled services and platforms that integrate building performance, tenant engagement and sustainability metrics. By investing in or partnering with property technology vendors, and sometimes developing their own digital offerings, they seek to provide differentiated experiences for occupiers. Vendors are slowly delivering automation tools as an evolution of their AI strategies, although adoption remains relatively nascent beyond “easy AI” deployments such as temperature adherence, smart scheduling and predictive energy modeling.
Two potential targets have raised funding this year, indicating investor appetite for building automation. The first, 75F, raised $45 million in a series B round that included Next47, WIND Ventures, Acccurant, Breakthrough Energy Ventures and Carrier Global Corp. Meanwhile, GridPoint landed a $45 million venture round in March, its first in three years, from backers such as Olympia Group, I Squared Capital Advisors, Marunouchi Innovation Partners and Goldman Sachs & Co.
Potential acquirers
The smart buildings automation market is attracting growing interest from a diverse set of potential buyers, each aligned with distinct strategic trends. Industrial conglomerates such as Honeywell International Inc., ABB, Johnson Controls, Siemens, Schneider Electric and Trane continue to lead the charge, seeking to enhance their platforms with AI-native, energy-optimized and occupant-centric functionality. These companies are likely to pursue purchases to bolster their ability to deliver real-time automation, predictive maintenance, digital twins and ESG-aligned building performance. Many are existing investors in the potential targets cited below.
AEC software vendors such as Autodesk Inc., Bentley Systems Inc. and Trimble Inc. — traditionally focused on design and construction — are looking to extend their reach into the operational life cycle of buildings via automation and real-time data integration. Targets like PassiveLogic, which deploys digital twin models to control buildings in real time, and KGS Buildings, which provides HVAC fault detection and diagnostics, are aligned with the rising need to merge design intent with actual performance without human oversight. They would allow AEC specialists to offer continuous feedback loops from operations into planning, supporting predictive maintenance, life-cycle costing and sustainability reporting.
Commercial real estate firms such as CBRE Group Inc. and JLL Technologies, as well as private equity-backed rollups like Eptura, are pursuing services that blend workplace optimization with automation and building operations. These players are likely to pursue targets such as Facilio, which offers cross-portfolio operational control, and KGS Buildings, which offers analytics that support both building engineers and facilities management personnel. As occupiers demand more flexible, efficient and occupant-centric environments, these buyers are prioritizing systems that improve asset uptime, reduce energy costs and deliver tenant-facing insights.
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