Three Steps to Build Out Your Real Estate Tech Stack
Three Steps to Build Out Your Real Estate Tech Stack
Real estate laws and customs date back centuries in some cases. It’s no surprise that a field so rich in tradition is resistant to change. However, the systems surrounding real estate — the software in particular — have needed upgrades for many years. A sound real estate tech stack acts as a way for organizations to quickly gain insights into risks and opportunities associated with their lease portfolios.
A Square Peg in a Round Hole: Real Estate Has Historically Lacked Resources
Real estate has been slow to gain the resources that other departments use to execute their jobs. Sales departments use CRM software, marketing teams have services to manage across platforms, and finance teams have accounting and payroll solutions. Yet, real estate has been much slower to adopt similar solutions.
Often, real estate teams have used tools better designed for other teams or siloed resources, such as Microsoft Excel and email. Real estate, as the second largest expense after payroll for businesses, demands more attention.
Moreover, besides managing one of a company’s major expenses, a real estate tech stack can serve as a vital source of knowledge and a foundation for operational success.
Real Estate Software Modernization Promotes Overall Success
As businesses scale, leaders must look for every possible avenue to promote growth and reduce costs. Among real estate technology trends, lease management software is perhaps the most effective tool for meeting those needs.
Businesses can look to their software to help solidify their business plans and make educated decisions about their growth. If a company has a thriving location in one market, the team can ask specific questions about the location that might predict success elsewhere.
For example, is the thriving location next to a specific anchor tenant that promotes growth? Are traffic patterns, utility costs, or taxes particularly favorable in the area? Many of the same ideas can be applied to organizational risk.
Business leaders can look to their lease management software to help insulate their companies from risk.
One important feature of lease management software is that it creates a single source of truth for the company and reliably preserves that information. For instance, an option to extend or an option to expand a lease might be buried in a reminder checklist or on an email calendaring system.
If that file is lost, or an employee’s account is lost, the data associated with that file can also be lost if the information is siloed. If the lease contains a highly specific “time is of the essence clause,” the business might face an unfortunate situation where the landlord could force the business to pay a premium to remain in their site or even move.
This collaborative approach is a great example of how companies can optimize their real estate tech stacks.
Three Areas Business Leaders Can Implement Their Real Estate Tech Stacks
1. Department Alignment
Real estate decisions, as mentioned above, span multiple departments. Executives need to know the projected costs and give authority to sign onto deals, accounting teams need to plan for returns and FASB ASC 842 compliance, and transaction managers need to know the status of the deals in the pipeline. Departments must share information to make the best decisions quickly.
For example, companies can use real estate automation software to help identify places with rising costs — for example, Florida and California with catastrophe coverage — and help internal risk management teams assess the desirability of sites that might be expensive to insure or uninsurable altogether.
If there are reasons a site should be eliminated early on, that can save time in the acquisition underwriting process and help the company refocus efforts. Increasing access to information throughout the company will promote a diversity of insights and ideas and likely drive the company forward.
2. Business Goal Setting
Traditional tools, such as Excel, rely on the knowledge source of an individual to not only create the management system but also know what questions to ask. This creates risk because of the lack of diversity in perspectives. It can also lead to information silos within the organization, where one person holds key data and knowledge.
A tech stack with real estate automation software at its core not only reduces information silo threats but also brings in a solution that is constantly being refined and tested by other users across various geographies and economic climates.
The features and data tools that the lease management software provides can potentially offer a springboard by giving increased access to data or reframing how business leaders approach solutions. If the software tool offers the feature, it probably provides a reliable indicator the business needs to consider in its overall operations.
About 44% of real estate businesses report that they turn to technology to improve their decision-making. So, companies can use those same tools to make informed decisions about their own real estate needs and how their real estate footprints shape their success.
3. Time Savings
Real estate, particularly in asset management, is a field where many tasks can be automated. Items such as lease renewal dates, options, site visits, insurance renewals, and more can be preprogrammed.
Investing in automation software that frees up employees’ time allows them to move away from repetitive tasks to more important ones.
To gain hyper-growth status, you’ll want to allow employees time to practice continued education, form relationships with other companies, brainstorm marketing, and brand ideas, and implement strategic planning in ways machines can’t.
The cost savings in payroll from avoiding routine work is a win in and of itself, but so is the value gained from having employees invest in more high-yielding pursuits. This more focused approach can yield a better bottom line for the company and increase employee engagement and satisfaction.
Conclusion
We owe a lot of our modern-day real estate practices to our ancestors, but with technology needs, companies should avoid doing as our forebears did. Embracing real estate tech stacks that administer the real estate needs of companies and inform business operations is a solution business leaders should adopt in today’s competitive landscape.
Featured Image Credit: Photo by SHVETS production; Pexels; Thank you!
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