How Proptech is Changing Today’s Data Driven Environment

Commercial real estate, like other industries, is adapting to today’s “data everywhere” world and making investments to create value through data and analytics. In particular, over the past two years commercial real estate has experienced a significant acceleration from awareness to adoption of both emerging technology as well as the utilisation of data analytics. While a majority of commercial real estate firms have now invested in integrated software solutions, many are still using spreadsheets for critical functions which is creating more data silos. According to the report A Shift in PropTech Adoption and Investment undertaken by leading software, data and advisory firm Altus Group, 60 per cent of executives indicated their firms are using spreadsheets as their primary tool for reporting, 51 per cent for valuation and cash flow analysis and 45 per cent for budgeting and forecasting. Historically an underserved industry in terms of technology development, over the past few years commercial real estate has attracted increasing amounts of technology venture capital investment – so much that investors have formalised the category with their own buzzword “proptech”. Commercial real estate’s rise in investment importance to fourth asset class status has driven a globally competitive market. Investors working in today’s “on-demand” culture and raised on a diet of instant access to information, increasingly expect data visibility, accuracy and transparency in real time from their investments. While a majority of CRE firms have now invested in integrated software solutions, many are still using spreadsheets for critical functions which is creating more data silos. What are the drivers of change? Commercial real estate firms need to start looking at how their technology infrastructure will allow their processes, workflows and data to “digitally plug” into the technology advancements of the proptech future. The adoption of process automation and data solutions will allow firms to utilise new industry-wide processing frameworks. Further research conducted by Altus Group revealed process automation and performance management, in particular, are two areas where technological advancements could significantly impact business operations. This report was based on a global quantitative survey of 400 c-level and senior executives. When executives were asked how automation could take over traditional manual processes, the survey respondents indicated that process automation could be a major disruptor in commercial real estate. Over 50 per cent said that many major processes and workflows could be significantly or completely automated — suggesting a potentially dramatic impact on people associated with these processes, and that the industry may be ripe for automation to take over. There is also the competitive risk of not being able to satisfy shareholder and investor demand for returns and losing market position as a result. Not being able to satisfy shareholder, investor and lenders’ desire for increased reporting transparency, detail and frequency also poses the risk of losing market position to CRE firms that can satisfy this demand. The use of an integrated application platform is a growing trend and example of how innovation is driving competitive transformation in the industry. CRE executives must, therefore, meet the needs of these investors who operate with the expectation of on-demand information delivery – they want more data, more often. It is clear that the transition towards greater proptech adoption is accelerating. Billions of dollars of venture capital are flowing into proptech as large-scale investors and leading real estate firms seek to change the rules of the game by disrupting traditional business processes and gain first-mover advantage. As the drivers of change continue to evolve in today’s “data everywhere” world, those still using spreadsheets for critical functions and operating in data silos will be left behind. It is no longer a matter of if but when. Click here for more information on Altus Group’s industry leading CRE software solutions. The Urban Developer is proud to partner with Altus Group to deliver this article to you. In doing so, we can continue to publish our free daily news, information, insights and opinion to you, our valued readers.

How Proptech is Changing Today’s Data Driven Environment

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