Real Estate Technology
Article | July 12, 2022
Early in 2020, the market was extremely liquid for real estate investors and operating companies. Interest rates were relatively low, asset values were high, unemployment was low, and there was little inflation—overall, the market was performing well. And then the lending market began to change in March in response to the COVID-19 pandemic. The number of defensive draws by companies to preserve their liquidity has been unprecedented, and the number of loans has drastically increased. Other forms of capital have slowed due to the inability to forecast risk. It’s a challenging time for real estate companies to stay abreast of market trends, as well as quantify the current and anticipated business impacts in this dynamic environment. With data constantly changing, how are real estate companies navigating this seemingly open-ended period of uncertainty? On April 17, EisnerAmper hosted a “Real Estate Principals Virtual Roundtable” with the Bay Area Council, Kennedy Wilson, and Wells Fargo. This online event provided a forum for industry leaders to share their experiences regarding the current lending market and to hear first-hand from their peers regarding how they’re navigating the current environment. Here are some key takeaways from that discussion.
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Real Estate Advice, Asset Management
Article | May 9, 2023
Explore the latest trends, tools, and strategies for optimizing data-driven real estate asset management services and achieving long-term success with a comprehensive guide to improving business ROIs.
Contents
1 Importance of Data-driven Model for Real Estate Asset Management
2 Seven Steps to Measure Data-driven Asset Management
2.1 Defining the Purpose and Scope
2.2 Identifying the KPI
2.3 Determining the Sources
2.4 Collecting and Cleaning Data
2.5 Data Analysis
2.6 Performance Evaluation
2.7 Continuous Monitoring
3 Effectiveness Metrics for Data-Driven Asset Management
3.1 Occupancy Rate
3.2 Operating Expense Ratio
3.3 Tenant Retention Rate
4 Conclusion
1. Importance of Data-driven Model for Real Estate Asset Management
As real estate technology continues to develop and become more cost-effective for both new and existing business structures, and as collaboration platforms, sensors, and smart devices continue to advance, the amount of data produced by commercial real estate assets is growing exponentially. This data can give real estate market participants like investors, asset managers, property managers, and tenants a competitive advantage and help them avoid disruption if they develop data-driven services and new business models centered on the specific needs of users, owners, or the property itself. However, only a concerted effort by all real estate stakeholders including builders, investors, owners, tenants, and service providers towards data-driven real estate asset management can optimize data to generate insights that improve performance and profitability.
The significance of data-driven models in real estate asset management is growing as the models enable more informed decision-making and more efficient operations by collecting and analyzing data from various sources. Real estate asset managers can gain a greater understanding of the performance of their assets and make more informed management decisions. This can result in increased efficiency, profitability, and tenant satisfaction.
2. Seven Steps to Measure Data-driven Asset Management
Measuring the effectiveness of data-driven real estate asset management services enables businesses to evaluate their current strategies and identify areas for improvement in the services they offer By following these steps to measure asset performance, processes, and activities, businesses can gain insights and make data-driven decisions to optimize performance and maximize returns.
2.1 Defining the Purpose and Scope
The process of measuring data-driven real estate asset management services begins with a clear definition of the purpose and scope of the measurement. It involves conducting a comprehensive review of the business goals as well as identifying specific objectives and purposes for the strategies to develop a well-defined purpose and scope for measuring the effectiveness of asset management services. It helps to ensure that the real estate asset management services are aligned with the broader business strategy.
2.2 Identifying the KPIs
Defining the purpose and scope of data-driven asset management is followed by identifying KPIs to measure success. It requires a clear understanding of critical areas of asset management and selecting quantifiable measures to define success factors and track progress. Choosing the right KPIs provides valuable insights into asset performance, enabling real estate executives and managers to make informed, data-driven decisions to optimize performance and maximize returns.
2.3 Determining the Sources
Identifying the data type, including financial, property, market, and tenant, is essential to determine the sources for evaluating data-driven asset management services. After establishing the data requirements, the sources, such as internal systems and databases, third-party data providers, and publicly accessible data sources, are determined with data compliance and security as the determining factor. Determining sources ensures that the asset management data is trustworthy, current, and accurate, which impacts subsequent decision-making. This step provides the groundwork for data-driven decision-making.
2.4 Collecting and Cleaning Data
Data collection and cleansing are essential for measuring data-driven asset management services. The collected data must be precise, exhaustive, and dependable for subsequent analysis and decision-making. The step involves validating the data for completeness and accuracy, eliminating errors, inconsistencies, and duplicates, and standardizing the data across all sources. The process identifies improvement opportunities, optimizing real estate asset management services for maximum efficiency and profitability.
2.5 Data Analysis
Data analysis plays a critical role in measuring data-driven asset management services. After finalizing the data collection and cleaning step, the data is analyzed using various techniques such as statistical analysis, predictive modeling, and data visualization. These techniques help to identify trends, patterns, and relationships that provide insights into asset performance. Data analysis provides a more profound understanding of the performance of real estate assets, leading to improved efficiency, increased profitability, and enhanced tenant satisfaction.
2.6 Performance Evaluation
Evaluation of data performance to comprehend improvements in the data-driven asset management services starts once the data is analyzed. The performance evaluation step involves comparing actual results to the established KPIs to determine whether the goals are being met or whether there are areas for improvement. It aids in identifying deviations from predetermined objectives and prompts and taking required corrective actions to realign with the business strategy. In addition, this step facilitates identifying improvement opportunities and ensures that real estate asset management services are optimized for maximum efficiency and profitability.
2.7 Continuous Monitoring
Measurement of data-driven real estate asset management services ends with continuous monitoring. To ensure asset management strategies are working, continuously tracking and evaluating KPIs from earlier steps while identifying underperformance and improvement opportunities is involved in the last stage. Operation managers can make data-driven choices, identify risks and opportunities, and optimize asset management strategies for efficiency and profitability by monitoring real estate asset performance. In addition, it ensures that real estate asset management services remain effective over time and can adapt to market changes to maintain a competitive edge.
3. Effectiveness Metrics for Data-Driven Asset Management
Effectiveness metrics for data-driven asset management services are the KPIs used to measure the success of data-driven strategies. These metrics help real estate executives and managers evaluate the performance of their assets and make data-driven decisions for maximum efficiency and profitability.
3.1 Occupancy Rate
The occupancy rate is an essential metric in data-driven real estate asset management. This metric indicates the proportion of a property's rental units that are occupied at present. A higher occupancy rate suggests the property performs well, as more tenants occupy the units. Therefore, this metric can be used by real estate businesses to gauge the efficacy of their digital asset management strategies.
3.2 Operating Expense Ratio
The operating expense ratio is used to evaluate a property's operational efficiency for data-driven asset management. It is calculated by dividing the operating expenses incurred by the property by the total rental income generated. It helps measure the proportion of income consumed by the expenses, such as maintenance costs, utilities, and commercial property management fees. A lower operating expense ratio indicates better cost control and efficient use of resources, resulting in increased profitability for the real estate asset.
3.3 Tenant Retention Rate
In real estate asset management, the tenant retention rate is an essential metric that measures the proportion of tenants who choose to renew their lease agreements. It is an essential indicator of tenant satisfaction and the quality of property management services. A higher tenant retention rate indicates that tenants are satisfied with the property and management, resulting in a stable tenant base, lower vacancy rates, and decreased costs associated with tenant turnover.
4. Conclusion
The significance of utilizing data-driven models for real estate asset management is rising due to digital real estate asset management, technological advancements, and the expansion of collaboration platforms, sensors, and intelligent devices. To gain a competitive edge and avoid disruption, stakeholders in the real estate industry must prioritize the development of data-driven services and innovative business models that cater to the unique needs of users, owners, and the property itself. In addition, the use of data-driven models can also lead to more efficient and informed decision-making, reducing costs along with increasing profits and improving real estate portfolio management.
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Real Estate Technology, Asset Management
Article | June 15, 2023
Explore the potential of data-driven real estate in optimizing asset management and revolutionizing strategies. Learn how advanced technology is changing the future of real estate asset management.
Contents
1. Importance of Data-driven Decision Making in Asset Management
2. Overcoming Difficulties to become Data-driven Real Estate Business
2.1 Availability of Data and Connectivity
2.2 Implementation of a Structured and Agile Development Process
2.3 Accelerating Speed and Reducing Costs
3. Benefits of Data-driven Real Estate Asset Management
3.1 Increased Efficiency and Cost Savings
3.2 Improved Tenant Satisfaction and Retention
3.3 Better Risk Management and Decision-making
3.4 Increased asset value and profitability
4. Data-driven Asset Management Solutions
4.1 Property Management Solutions Providers
4.2 Digital Asset Management Solutions Providers
4.3 Project Portfolio Management Solutions Providers
5. Emerging Data-driven Asset Management Patterns
1. Importance of Data-driven Decision Making in Asset Management
Real estate asset management is a complex and competitive industry, presenting challenges for asset managers and portfolio managers. Gathering and analyzing information provides valuable insights for data-driven decision making, impacting the success of real estate investments.
Decision-making through insights allows real estate asset managers, as well as portfolio managers, to identify trends for the future of digital real estate asset management, make accurate predictions, and forecast future outcomes. For example, data analytics can provide insights related to occupancy rates, rent growth, and lease renewals, which further helps in strategic decision-making for the future.
2. Overcoming Difficulties to Become Data-driven Real Estate Business
Corporate real estate asset management requires strategic planning and informed decision-making. Utilizing data-driven approaches, valuable insights into commercial property performance can be gained, leading to optimized operations, reduced costs, and increased profits. However, implementing a data-driven approach comes with its own set of challenges. Therefore, executives and managers in the real estate industry need to understand how to overcome these difficulties and successfully transform their businesses through data-driven operations. Key challenges the businesses must address include data availability, structured processes, and cost efficiency, all of which are essential for improving the effectiveness of asset management in the long run.
2.1 Availability of Data and Connectivity
Reliable data availability is a significant challenge in data-driven decision-making for real estate businesses, as the data generated is often fragmented and siloed across different departments. To overcome this challenge, businesses must invest in technology cloud-based platforms, APIs, and data warehouses to enable seamless data integration and connectivity across the organization. In addition, organizations must consider implementing an integrated data management system to analyze data from multiple sources, providing the decision-makers with a comprehensive view of the organization's performance.
2.2 Implementation of a Structured and Agile Development Process
For businesses adopting a data-driven methodology, implementing a structured and agile development process is a major challenge. A data-driven approach requires a planned data collection, analysis, and decision-making process. At the same time, the process needs to be adaptable to the changing market conditions and business requirements. To overcome this challenge, businesses must establish a formal process for data-driven decision-making, including clear roles and responsibilities, data governance policies, regular reporting and analysis. This can be achieved by leveraging agile methodologies, DevOps practices, and automation tools.
2.3 Accelerating Speed and Reducing Costs
Speed and cost reduction are critical challenges for real estate businesses that operate in a highly-competitive market Data-driven decision-making is time-consuming and expensive, demanding executives and managers to invest in tools that can automate the data analysis and decision-making process. It includes implementing artificial intelligence and machine learning algorithms to rapidly process large amounts of data and provide real-time insights to facilitate informed decision-making.
3. Benefits of Data-driven Real Estate Asset Management
Data-driven real estate asset management has the potential to revolutionize the way real estate businesses operate. Businesses will be able to unlock valuable insights to enhance overall operations and drive innovation by leveraging asset management tools and techniques.
3.1 Increased Efficiency and Cost Savings
Data-driven commercial real estate asset management services offer businesses a powerful tool for increasing efficiency. Businesses must automate their manual processes and optimize workflows to increase productivity by leveraging real estate automation tools. It will save time, money and improve the overall quality of service provided to tenants, leading to higher tenant satisfaction rates. Additionally, data-driven decision-making help businesses identify areas to reduce unnecessary expenses, like energy consumption or maintenance costs.
3.2 Improved Tenant Satisfaction and Retention
Real estate businesses understand tenants better and improve satisfaction as well as retention rates by managing assets using data-driven methods. By analyzing demographics, behavior, and preferences data, businesses can determine tenants' needs regarding property and make informed decisions to improve services and tailor offerings accordingly. In addition, it leads to higher satisfaction rates and helps companies to retain tenants, which is crucial for long-term success in the real estate industry.
3.3 Better Risk Management and Decision-making
Real estate enterprises can make more informed decisions and better manage risks with data-driven asset management. Businesses must use real estate data analytics tools to examine property performance, identify potential opportunities and risks. It improves the accuracy and reliability of their decision-making process and helps mitigate risks more effectively. Furthermore, by incorporating predictive analytics in the real estate decision-making process, businesses can anticipate future trends and proactively take measures to address potential issues before they occur.
3.4 Increased Asset Value and Profitability
Data-driven real estate asset management help businesses improve the value and profitability of assets. Business intelligence in real estate helps interpret property management data. In addition, businesses can identify areas for improvement, like cost savings or increasing rental rates. It can result in improved asset value, leading to higher profitability. Furthermore, by analyzing data on market trends of real estate asset management and tenant behavior, businesses can also identify potential areas for investment, leading to increased profitability in the long run.
4. Data-driven Asset Management Solutions
Data-driven asset management solutions help real estate businesses manage assets more efficiently and effectively. With data analytics, businesses will be able to streamline their operations, make better-informed decisions, and increase asset value. Ultimately, it will result in overcoming the difficulties in managing the assets and improving the portfolio performance. With the help of advanced technology and automation tools, one can stay ahead of the curve in the highly competitive market and achieve business objectives effectively.
4.1 Property Management Solutions Providers
TenantCloud
TenantCloud is a cloud-based property management solution provider that offers comprehensive tools and features for real estate businesses to manage their assets efficiently. Its property management software enables real estate executives and asset managers to automate their workflow, increase efficiency, and reduce costs by centralizing and streamlining their property management processes. Its platform provides real-time visibility into property performance, tenant behavior, and rental income, allowing businesses to make data-driven decisions and identify opportunities for growth. Its online portal also allows tenants to submit maintenance requests, pay rent online, and communicate with property managers seamlessly.
London Computer Systems
London Computer Systems (LCS) is a leading real estate asset management service provider established in 1987. Its flagship product, Rent Manager, is a Property Management Software that offers a comprehensive solution for property management, including integrated accounting, contact management, work orders, and marketing solutions. LCS offers Net Dial Tone VoIP telephone systems, enterprise-level hosting solutions, network design and support services, and custom website development. With its customer-focused approach and advanced technology, The company streamlines operations by eliminating the need for multiple programs and driving innovation in the real estate industry.
DoorLoop
DoorLoop is a cloud-based property management software that specializes in real estate software, commercial real estate PMS, and residential property management software. Its solutions offer a range of features, including lease management, rent collection, maintenance requests, accounting, and reporting. With DoorLoop, managers and executives in real estate businesses can easily manage their properties and tenants from a single platform, improving efficiency and streamlining processes.
Guesty
Guesty is an end-to-end property management solution provider that offers a comprehensive platform for managing short-term rental properties. Its features include multi-calendar management, automated messaging, dynamic pricing, guest communication, and channel management. With Guesty's intuitive and user-friendly dashboard, real estate businesses can easily manage their properties anywhere. Its innovative solutions help businesses stay ahead of the competition, enhance their efficiency, and drive growth in the real estate industry.
4.2 Digital Asset Management Solutions Providers
Canto
Canto is one of the leading digital asset management solution providers for visual communications to help real estate companies of all sizes. Established in 1990, Canto is one of the digital asset management industry pioneers. 2,500+ customers leverage Canto’s software to organize, find and share videos and images that helps to work faster and build a brand in this evolving digital ecosystem of real estate businesses.
Bynder
Bynder is a digital asset management solution provider that is a centralized platform for managing all marketing and creative assets. Its features include asset organization and categorization, asset distribution and sharing, digital rights management, and analytics. Its solution enables real estate businesses to streamline their asset management workflows, collaborate more efficiently, as well as reduce the time and resources required to manage their digital assets. Bynder also integrates with other software tools, such as Adobe Creative Cloud, WordPress, and Salesforce, allowing seamless workflow integration.
Aprimo
Aprimo is a marketing operations platform provider that offers digital asset management, marketing resource management, and campaign management solutions. Businesses will be able to streamline marketing process workflows using the centralized platform. Aprimo's features include digital asset management, workflow automation, project management, budget tracking, and marketing performance analytics. With the company’s centralized platform, real estate businesses can optimize their marketing operations and drive innovation. The platform also enables businesses to collaborate on projects and measure the impact of marketing campaigns, leading to increased efficiency.
4.3 Project Portfolio Management Solutions Providers
ClickUp
ClickUp is an all-in-one productivity platform that offers a wide range of features, including task management, time tracking, calendars, and project reporting. Enterprises utilize the platform for creating Gantt charts, and tasks, tracking time, and reporting to stay on top of their projects and meet deadlines. The company enables effective project portfolio management, playing a crucial role in real estate asset management by helping businesses streamline their operations, optimize resources, reduce costs, mitigate risks, and drive innovation. Organizations can leverage this solution to ensure the effective delivery of projects, maintain alignment with strategic objectives, and ultimately achieve better outcomes for their real estate assets.
Saviom Software
Saviom Software provides futuristic resource management and workforce planning solutions that help real estate businesses optimize project portfolio resources, schedules, and budgets. Its solution offers features such as capacity planning, project scheduling, forecasting, and resource allocation, which are crucial for effective real estate asset and project portfolio management. It benefits real estate industry professionals by providing extensive features to improve project delivery times, resource utilization, and cost management. In addition, it enables real estate organizations to enhance team collaboration, automate manual processes, and reduce administrative burdens, leading to greater efficiency and profitability.
Octalsoft
Octalsoft is a project portfolio management solution provider that offers a comprehensive suite of tools to manage real estate assets efficiently. Its features include project planning, resource management, budgeting, and risk analysis. In addition, its project and portfolio management solution offers robust reporting and analytics capabilities, providing insights into project performance and identifying areas for improvement. By streamlining project management processes, Octalsoft's project and portfolio management solution drives innovation by allowing real estate asset management companies to focus on high-value activities and drive better outcomes.
5. Emerging Data-driven Asset Management Patterns
Data-driven asset management is essential in the real estate industry, allowing businesses to optimize efficiency, improve tenant satisfaction, manage risks, and increase asset value and profitability. The emerging data-driven asset management patterns discussed showcase how businesses can leverage technology and data analytics to drive innovation. The variety of solutions offered by project portfolio management, property management, and digital asset management solution providers enable real estate businesses to streamline processes, increase collaboration, and make data-driven decisions. Investing in these solutions will help real estate businesses to remain competitive and achieve long-term success.
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