How to Bring CRE into the 21st Century
Technology is prevalent in almost every single aspect of our lives, changing the way we live, play, work, and communicate. It makes our lives easier and helps us perform tasks more efficiently and effectively. And as evidenced by the way that technology has been incorporated into our day-to-day, it is prevalent in almost every industry. But has the commercial real estate industry kept the pace in terms of innovation and technology?
CRE is an industry that is still very traditional, and some might even say behind the times. Perhaps this is shocking for some, seeing as the CRE industry is valued at approximately $12.6 trillion. But for others, who know success is often based on face-to-face interactions and building relationships, this probably does not come as a surprise.
Why Does CRE Need Technology?
Though it may be late to the game, technology is posed to change the state of commercial real estate. Technology can remove or relieve some of the most common pain points CRE firms experience, drive productivity, and improve decision-making. Additional reasons to consider investing in technology include:
Outdated communication techniques, such as phone calls and snail mail, and manual processes, such as updating contact information and doing calculations in spreadsheets, take up valuable time that could be focused on more value-add activities.
Appealing to Millennials
In 2020, Millennials will make up 50% of the global workforce, and as Baby Boomers continue to retire (the current average age of commercial real estate professionals is 54), they will increasingly rely on this younger generation to keep their businesses running. Millennial presence in the workplace has influenced the way companies work, corporate values, and company culture, and those preferences are sure to bleed into the CRE industry.
Additionally, investors are increasingly trending toward the Millennial demographic, which means they want easy access to information from their phone and on the go. Failing to invest in technology could mean alienating an entire group of investors. And in 2020 alone, this demographic is expected to control over $28 trillion in assets.
Improving the investor experience
When it comes to the level of transparency and accessibility that investors expect from their sponsors, the bar is rising. Investors want more information, more readily available, with more actionable insights.
Growing the business
Forward-thinking firms are investing in technology to quickly scale their firms, improve efficiencies, and remain competitive. And technology empowers smaller companies to more effectively compete with their larger industry peers.
How Can CRE Use Technology?
Investor management software can have a big impact on the efficiency and effectiveness of a CRE firm. See how technology can address each of the aforementioned needs.
Attract Millennial talent and investors
Technology attracts young talent and an increasingly powerful group of younger investors.
Millennials want to work for a company that is tech-savvy and demand access to tools that will help them work smarter – not harder. Utilizing an innovative solution such as RealPage IMS shows future talent that you are invested in growth, can provide the opportunity to learn and leverage the latest technologies, and are providing the tools to enable employees to work more effectively. Similarly, Millennial investors expect convenience and control, all while on-the-go. An intuitive yet powerful platform enables investors to track the performance of their investments, providing the data they need, anytime and anywhere.
Create a better investor experience
Technology such as IMS enables investors to easily and quickly access data including project information, performance metrics, ownership percentages, and historical distributions.
With front and back office support and an investor dashboard, the result is a better user experience for owners and investors alike.
Boost productivity and scale the business
While calculating waterfalls in a spreadsheet and snail mailing individual distributions may be fine now, that no longer becomes manageable as the company grows. The key to successfully scaling is in technology and automation. Automating resource-consuming tasks frees up time that can be devoted back to more value-add activities, such as advancing the project’s progress, optimizing asset performance, and deal-making. Check out the following real-life example:
- Investor Relations Manager Noelle Behnam at Gelt, Inc. was individually emailing customized newsletters to over 450 investors each quarter with information about each of their specific deals. With IMS’ email marketing tool, she can quickly and easily send large-scale communications to investors. What used to take two days now takes two hours – an 83% time savings.
These are just a few of the ways that technology and automation can drive productivity in your commercial real estate firm.
It’s an exciting time to be in the commercial real estate industry. Technology-fueled innovations are enabling firms to raise equity faster, increase asset performance, and focus more time on those activities that drive revenue.
Ready to learn more about how investor management software can help bring your firm into the 21st century? Click here!