Adoption of commercial real estate technology across the full life cycle of a project is imminent—but building out an internal tech platform can feel overwhelming. While many technologies have valuable applications, no comprehensive technology program should be without these five essential tools.
Data and Analytics
Data-driven decision-making is now as critical to real estate investing as location. Earlier this year, Deloitte vice chairman and US real estate leader Jim Berry listed “purpose, location and analytics,” as the vital elements of value proposition in CRE today, and last year, a staggering 92% of respondents in an EY and CRETech survey named data analytics software as the single most important technology for commercial real estate companies. Predictive data and analytics guide better and more informed investment decisions by leveraging automation to forecast costs, income and asset performance and inform budgets and business strategy in a way that can shape the outcome of a deal and drive improved returns. In a post-pandemic world, real estate companies have also used data and analytics technology to respond to rapid market changes to assess new opportunities and risk.
Where data and analytics tools provide essential evidence-based information, artificial intelligence evaluates and discerns information. Also known as machine learning, AI leverages data to make predictive investment and development decisions that help investors form strategy, pinpoint new geographic markets and even make acquisition or site selections. Real estate AI is still in its infancy, but it has the potential to transform the industry. In a global innovation survey from the Altus Group, 46% of respondents said that AI will create significant cost savings and operational efficiencies, and another 43% said that the technology has the power to have a major disruptive impact.
Construction - and Development - Management Software
Today, developers are looking to manage costs above all else, and they are using technology to do it. Project management software oversees costs, schedules, equipment and materials, and communicates with project stakeholders, ultimately creating efficiencies that reduce overall construction costs and ensure developments deliver on time. This software isn’t exclusive to contractors. It has applications for developers, operators and construction managers, and the market is continuing to grow. According to research from Radiant Insights, the construction management software market alone will be valued at $1.6 billion by the end of 2022.
Virtual Leasing Management
The pandemic fundamentally changed property leasing, and there is no going back. Both commercial and residential tenants want and expect a fully digital leasing experience, beginning with virtual tours, digital appointment systems and online background checks and leasing applications. But, operators are looking beyond that to more sophisticated applications. New leasing tools use AI to communicate with prospective tenants—answering questions in real time—and adapt rental rates to changing market conditions all without the need for a leasing agent. In the apartment sector, start-up leasing tech companies are tackling security deposits and upfront rental fees to ease the cost burden for potential tenants.
Cloud-Based Property Management Technology
With the understanding that operations strategy can make or break an investment, property management teams are leveraging the latest tech tools to drive efficiency and relieve professionals of time consuming back-office tasks. Property management software covers everything from accounting and budgeting, cyber security and performance analytics to more mundane duties like maintenance requests, rent tracking and communication with tenants and vendors. These tools are becoming so crucial to property performance that stakeholders are increasingly targeting professional property management teams equipped with a robust technology platform. As the field evolves, many property management tools are incorporating AI and predictive analytics to further drive value.
Northspyre understands the power and value of technology at every stage of a project’s life cycle. Our purpose-built technology platform has facilitated $20 billion in capital projects since its inception, ultimately producing time- and cost-savings for developers focused on the creation side of CRE. Interested to hear more about Northspyre and how it has helped owners and developers across the country save up to 6% on overall project costs by becoming more proactive and data-driven in their project delivery? Speak to a member of our team today.