Have you ever wished you could predict the future? Anticipate road bumps and catch them before they happen?
If you work in real estate development, the answer is undoubtedly yes.
Bringing in a complex real estate project as planned is one of the industry's most significant challenges. According to KPMG, 69% of all commercial real estate budgets have not come within 10% of their proposed budgets in recent years, further highlighting that the industry has not nailed down how to get ahead of the events that lead to budget overruns.
It's not typically a single event that leads to budget overruns but a small series of them. When these slight changes aren't noticed, they add up to high costs that eat into the returns.
If your development team had a crystal ball, you'd be able to avoid unnecessary expenses, anticipate change orders and plan for them, catch errors in your data before it's too late, and ultimately earn what you expect (or more) on each project you run.
The exciting news is that your team can anticipate and even predict these events when you equip them with Proactive Intelligence.
What is Proactive Intelligence?
Proactive intelligence takes your team's historical data and uses data analytics and AI to find patterns in your past projects that help you anticipate project challenges well before you break ground on a new project. It's as close as you can get to handing your development team a crystal ball.
Few solutions offer your team predictability in today's market, and even fewer development teams have begun to take advantage of it. The technology represents an opportunity to set your team apart from the pack.
Proactive intelligence consistently combs through your project data and pulls from industry best practices to suggest what next steps you need to take to bring your project in effectively. The technology will even flag budget lines where there are opportunities for significant savings - an excellent way to cut costs and earn more on your projects.
For example, throughout your development firm's project history, maybe you've used several vendors. Perhaps you decided on who to work with each time by comparing their upfront costs. When you use a proactive intelligence platform to help your decision-making, you may uncover that a certain vendor typically has the lowest upfront cost but actually issues the most change orders throughout your project - adding up to be more costly than your other vendor options. Scale this example to the often hundreds of vendors working on a portfolio at a given time, and you're able to see significant savings.
These additional insights are served up to your team with no additional work on their end, allowing them to make proactive decisions that lead to successful real estate projects. There's never been a better time to be a real estate project manager, owner, or leader since proactive intelligence is set to create a wave of far less risky investments and greater returns for everyone involved.
Why Proactive Intelligence Is Changing Real Estate Development for the Better
Many factors are currently disrupting the commercial real estate industry. External influences make it hard to find stability in any investment due to the global pandemic and fluctuating material costs, the skilled labor shortage, and aging national infrastructure.
Insurance carriers are even apprehensive about insuring projects. According to a recent Bisnow article and the experts at Aon Risk Solutions, developers need to demonstrate that they understand their risks by providing carriers or brokers with thorough, accurate, and up-to-date information about their projects. The president of Aon stated that they're seeing an exodus of carriers from the Northwest region due to a negative return on many recent construction projects.
With proactive intelligence, you can convince these insurance carriers to cover your project, even during these higher-risk times. By equipping your team with a complete understanding of all the risks associated with your development, backed by extensive historical data and predictive analytics, you're able to demonstrate a clear plan of action for addressing challenges when they arise.
"It's an information game," says Brian Hearst, Managing Director and Broker for the Aon Construction Services Group. "In today's more competitive marketplace, the more information my client can give us, the more effective we can be and the more competition we can create in the marketplace to get the client better terms and conditions."
You can imagine investors and owners are thinking the same way. If your team can talk through project risk using data points and proactive intelligence tools, you will instill confidence in stakeholders, earn more business and deliver projects more efficiently, within budget.
Northspyre is the first proactive intelligence platform made by real estate developers for real estate teams like yours. See what your project outcomes look like when you bring proactive intelligence to your team. Try our ROI calculator today to see how much you'll save with Northspyre.