Using the latest technology is no longer an “extra feature” or “bonus” that real estate companies can use for their internal management or provide to their clients. Sticking to the traditional methodologies, software techniques, and products that have worked in the past is simply not enough to excel in the real estate sector. You have to be at the forefront of the technology, and there are several reasons for it. Your tenants are expecting. Your vendors are expecting. Your contractors are expecting. Everyone is expecting from you. And you are still not using it! To stay relevant in a rapidly growing real estate market, you must embrace technology and use it to shift how property owners and managers meet the needs of their clients.
A Slow History of Real Estate & Technology
Traditionally, real estate companies, especially Commercial Real Estate (CRE) firms, have always stayed away from software products and done their business dealings with minimal use of technology. CRE has lived in the dark ages when it comes to technology as it is still using traditional spreadsheets, bookkeeping software, fundamental data analysis, and time-consuming research methods. CRE companies have been reluctant to adopt new technologies and jump into the 21st century.
Some surprising stats about a delay in technology adoption!
According to a report by Ernst & Young, a total of 61% have adopted technology solutions. Out of them, 33% have integrated one or two solutions, and 28% have adopted multiple products. These solutions mainly comprise system automation tools and property management solutions. 35% are still evaluating, piloting, and assessing the market. Approximately 4% have not even started thinking about how to apply technology.
There are several reasons for this lag in technology adoption. Some of them include:
- The commercial real estate industry is a vast market that comprises multiple yet different internal sectors. Designing, creating, and implementing technology that caters to the needs of these different niches and facets of CRE could be complicated and overwhelming. According to a report by Ernst & Young, 58% of property owners say that new systems don’t easily integrate into existing processes and infrastructure. 60% mention that competing priorities for investment dollars and management time delay progress. Still, there is hesitation in technology adoption as 43% highlighted the challenges faced in widespread adoption of different tools across clients’ businesses, and 35% consider the lack of broad evolution in processes after applications are adopted.
- It’s safe to state that CRE companies have been late implementing different technologies that other industries have been using for a while. It’s not because there is a lack of technology to choose from; the problem is just the opposite. There has already been so much research and different technology options available that can push CRE companies into this new wave of technology.
- Now, the possibilities are higher to choose the right one!
- Many real estate firms decide and adopt new technological advances. Many of them quickly run into another problem, i.e., integration. They either need assistance in software integration or consider customized software solutions that can fit well into their existing business model.
- Cost is another reason why several real estate companies are hesitant to upgrade their current systems. Also, the skill sets of staff members and conventional if-it-isn’t-broken-don’t-fix-it culture still continue to function. 53% of property owners know that they don’t have the required tech talent to make the best use of the latest technologies.
The technology indulgence and its significance have undergone a sea change over the last few years. Though it remains undeveloped as compared to the standards of other sectors, recently, a pandemic gave it a big push, resulting in significant technology evolution. Let’s find out how!
How Did Technology Solutions Help CRE From Pandemic Hit?
Covid-19 expedited the need for technology and pushed real estate firms to add new tools & techniques to the existing systems. Approximately 78% of property managers had to rethink their technology strategy or the extent to which they need to adopt new tools.
Undoubtedly, the pandemic supercharged the industry transformation that was already in progress. There is a massive change in the way people use buildings and real estate infrastructure. COVID environment gave a hard push forward, forcing firms to match the pace and use more resources towards change. Experts believe that two other factors might also accelerate technology adoption in the coming years.
- There has been a great industry transformation where people have changed the way of using buildings and real estate infrastructure. This has forced the companies to rethink their operations to extract more value from every asset in their portfolio. They have to diversify revenue streams by developing new business lines. Real estate owners are making better use of technology to access consumer-facing revenue streams.
- Many industry leaders in real estate sectors opt for multiple solutions to differentiate themselves at a firm-wide level. They are not only investing in tech-savvy talent but also developing company-wide technology strategies. Initially, they can differentiate themselves through cost-savings, but later they will start using internally generated portfolio data sets and analytics, which will further help them make better-operating decisions and make better investments. This will let investor capital migrate to the winners; thus, widening the competitive gap between the technology-using companies and those who haven’t adopted any relevant technology.
Commercial Real Estate firms are starting to make headway in their technological advancement, but implementation will have difficulties. Remember that real estate is a people-centered business, and adding technology into this sector will change the way people buy and sell commercial properties. The real power lies not in the technology you choose for your business. Instead, the real power lies in a company’s response to the change. Those who have proactively embraced new technology and implemented it well into their existing business model have witnessed a 50% higher ROI than those just reacting to new technology surges.
Best Technology That Can Actually Help CRE Industries
Commercial Real Estate involves accounting, client communication, renting, leasing, property management, valuing, purchasing, and much more. Getting individual software for each operation is not a sensible decision resulting in disconnected workflows, further increasing errors and asymmetry. The best technology solution for CRE firms is Commercial Real Estate Management Software. A CRM for Property Management centralizes all your business operations inside Salesforce. It will cover every aspect of your property development and management by automating everything in one flexible, customizable cloud-based environment.
A trusted Real Estate ERP Software strives to improve real estate businesses worldwide by leveraging technology to make things easier and create great utility. All you get by choosing an apt property management tool is – Greater Ease, Greater Enjoyment & Greater Outcomes!
Major Problems With Existing Software Solutions
Real estate is a slow-moving sector for technology. It is also a complex sector where you cannot easily integrate any software or tool that can easily gel with your business requirements. There is no single solution available in the market that can handle multiple operations and business requirements of property managers cost-effectively.
Moreover, offerings available in the market specifically for real estate are:
Incomplete
They only provide solutions around certain aspects of the business but not all. This force property manager to use multiple software that deeply impact team collaboration and work culture,
Inconsistent
They act as data warehouses but do not define workflows, resulting in inconsistency and bad user experience.
Inflexible
They have limited process configuration and automation options forcing property managers to adapt to the software.
Closed architecture
The majority of tools are close models. You have to depend on the software provider for new features and driving innovations. You cannot make any changes or integrate external services by yourself.
So, it can be said that the market is already very slow, and property managers don’t have many available options that can handle everything in one place.
How Does REDA Capture These Challenges?
REDA has formed a holistic operational ecosystem that effortlessly streamlines all real estate operations, functions, and processes. Being industry experts, we proactively inform and advise CRE firms about the best-in-class applications, both inside and outside of Salesforce, complementing well with REDA best real time ERP software. REDA follows the “Four C Strategy” comprising – Complete, Consistent, Customizable, and Collaborative. As a result, Property Managers can manage 250% more properties, and leasing reps can close 200% more leases. With REDA:
- Respond 75% more leads and tenants as compared to your competitors.
- Create more effective marketing campaigns.
- Ensure 100% paperless operations, further reducing your cost and streamlining your workflows.
- Monitor 100% of key metrics in real-time.
- Ensure up to 80% contactless operations.
If you could successfully do these things in real life, choosing REDA will be an investment rather than an expense. The ROI of REDA is that it can help you save up to $500 per unit per year. So, for example, if you are spending $10 per unit, its ROI will be huge with REDA. So, it’s not a bad deal at all!
