Whether you’re talking about proptech, commercial real estate tech (CRE tech), building tech, or workplace tech, technology that makes it more efficient and easier to own, lease, and occupy buildings is critical to successful business outcomes.
But managing your corporate real estate portfolio is a complex endeavor with many moving parts. Along with strategic portfolio planning, you must consider lease analysis, administration, and accounting, transaction management, and financial analytics and reporting ― not to mention how to best adhere to evolving accounting standards.
So when looking at the roughly $20 billion market of software and technology solutions for managing the commercial property lifecycle, where should you begin?
It starts with the strategy behind the technology. Read on for seven steps for building an effective CRE portfolio digital strategy.
Step #1 Clean and standardize your data
If your data is held by different groups that don’t communicate well with one another, you’re not alone. Our experience has been that many companies don’t have the right data structures or the right data governance in place for a full data strategy. And unfortunately, it can be extremely difficult to unearth who is responsible for putting lease, asset, and other data into a centralized system.
For example, facilities and asset management might call a building by one name ― but the finance group calls it by another. If you consolidate your data without fixing that discrepancy, you could end up with a messy dataset.
Start by assessing how good your data is and what cleanup it needs. Otherwise, you risk going down the wrong path of choosing a software solution that looks like great in the demo but that doesn’t meet your business needs.
Step #2 Get a solid understanding of current space usage
How much space will your business need going forward? Are individual space needs decreasing because of flexible work? Are you retaining or expanding space usage because you require more collaboration spaces?
There’s a lot of uncertainty in the real estate market these days, whether you’re an owner or a tenant. It may be difficult to know what space you will need six months or a year from now, but determining how much space you’re actually using today can inform more accurate forecasting. Solid analytics tools track important data metrics like usage, cancellations, and meeting type, and include in-depth utilization reporting so you can optimize your real estate footprint.
Step #3 Evaluate your existing real estate tools
It’s tempting to look for the latest and greatest new technology, but you may have hidden value in your current commercial real estate technology. Fully look at:
- The solutions’ capabilities
- Your organization’s usage of the tools
- How you might use this CRE tech in the future
- Any possible gaps in features or functionality
One example we see regularly is space reservation systems not being used to their full capacity. Existing workplace technology could have integrations you hadn’t put into play already because you didn’t identify a need — but your needs have changed. Many meeting and event management systems also include tools for flexible, hybrid work, desk booking and data analytics.
Step #4 Detail your internal business processes
What do your processes look like? Why are you doing certain things? What are the value-added pieces and the redundancies?
It’s not just the software or the real estate data. Often, it’s your business processes that are not fully understood. Evaluate what your organization is doing today and examine how you want those processes to operate in the future. Look at what your company is trying to achieve, take into account how real estate and facilities play into those goals, and make sure these processes are ultimately trackable up to your corporate objectives.
Step #5 Consider the full effects of tech buying decisions across your organization
A CRE tech solution doesn’t exist in a silo; it has impacts far beyond one group or department. Getting that broad company perspective will bring home the value of the solution for everyone. Understand:
- Where the biggest impacts will be on the business
- What cadence makes the most sense for upgrading CRE technology
- What gaps you are trying to fill
- How to go out into the marketplace to buy new solutions
- When to properly acquire tech (e.g., Do you historically only invest in new solutions when lease accounting rules change or some other major event occurs? Is this the best approach?)
Step #6 Involve legal and procurement early in the buying process
Although it may be painful involving procurement, bring them into your vision early and have an appropriate business plan for your commercial real estate going forward. This is key because it’s the best time to determine terms ― the most flexible a vendor will be is when you're negotiating your very first contract. Procurement can help you get better terms and conditions related to life of the contract. Likewise, leverage legal for the right reasons, like wrapping around your RFP.
Step #7 Conduct a comprehensive needs review after use (and before renewal!)
CRE technology gets old, fast. Add in vendor turnover and fluctuating levels of support, and you can soon find yourself having to ward off stagnation.
As such, several times a year look at where you are from a roadmap and delivery perspective. What’s going well? What hasn’t happened? What’s next?
At the same time, keep in the loop by attending conferences and connecting with others. Maintaining an active relationship with your software provider will keep you hearing about improvements as well as providing answers to your questions.
In today’s changing commercial real estate industry, it’s increasingly important to continuously monitor your CRE technology. It’s also vital to reach out to your teams about what you are doing — and why. Putting sensors in your corporate offices? Be sure to communicate your business objectives and get employee buy-in for technology adoption early on.
For more suggestions on making your real estate portfolio more adaptable to the changing market, please see our on-demand webinar How to Prepare Your CRE Portfolio for Potential Economic Dip.