Much has changed in commercial real estate over the last several years, and 2019 has proven to be no different. Now more than ever, the industry is being overhauled by a mass infusion of technology platforms and digital gadgets, which has had an impact on the expectations of owners, outside investors, and even tenants. This has led to new business models being created in the market. Operational efficiencies and attracting new capital have become the primary purposes of implementing technology across property portfolios. Savvy industry players are making plans to capitalize on the expected transition to what could be a more stable and sustainable market.
Commercial real estate has historically been an industry reluctant to address technological innovations that other industries adopted with success, but property owners are beginning to buck this trend. This movement began to pick up steam in 2017 with an injection of private equity capital and technology startups entering the market. If it feels like this movement started overnight, the fact of the matter is it did – to a degree. But then why are we as an industry yet to capitalize upon this transformation? That’s simple to explain. Traditionally, the industry relied upon paper-driven business practices with little reason to move to a more digital platform. In other words, financial conditions in the industry have yet to force the hand of property owners and investors to fundamentally change the way they do business.
It’s a matter of reinvention to stay relevant and commercial real estate, albeit slowly, is moving in this direction. This manifests a number of different ways – from services a building offers to tenants, the physical space itself, and how capital is allocated across a portfolio.
We are a highly connected society and consumers of vast amounts of information. Think about the amount of time you spend online or on a mobile device. Our expectations of how companies should interact with us have changed dramatically, and this is accomplished only through the digestion and analysis of data – both off and online. This shift in thinking has transformed entire industries where most brands have created data-based digital experiences, while other more risk adverse companies fell to the wayside. It’s a matter of reinvention to stay relevant and commercial real estate, albeit slowly, is moving in this direction. This manifests a number of different ways – from services a building offers to tenants, the physical space itself, and how capital is allocated across a portfolio. However, these strategies cannot successfully be executed without a solid infrastructure of data readily available to drive these business decisions.
Of course, that’s much easier to say than do. If you’re a commercial real estate owner, think of the enormous amounts of data you collect; some of which is structured, but mostly unstructured. This data represents a diverse mix of tenant, operational and market data, and aggregating this information into a digestible platform is a difficult task. But that’s just current, existing data. Forward-thinking owners must also have a strategy for integrating new data resulting from the acquisition of new assets.
To make powerful decisions with data, it’s important you start from the beginning. That journey starts with assessing how your data is managed from the ground up. That requires property owners to:
- Put in place a data management plan
- Organize internal and external data sources
- Guarantee the quality and integrity of data
- Allow for quick and easy access to data
Whether your company is starting this process from scratch or are well on your way to data efficiency, the benefits of data management go beyond just financial growth. Companies that make data management a priority will be able to drive continuous improvement internally and enable faster and more accurate information to make better informed decisions.