How Tech is Changing the CRE Landscape

Over the last decade, technology has transformed the real estate sector in many ways and some CRE buyers and sellers are struggling to keep up the pace.

What is Proptech and how is it used?

            Proptech refers to any real estate technology platform that helps to improve efficiency, and they can do so in many ways. Overall, the idea behind these platforms is to lower costs while increasing efficiency. They are often used for sourcing and managing new deals, saving time and money by streamlining day-to-day operations, accessing and analyzing third party data, and providing visibility for the company. Most importantly, proptech can connect every person involved in the company to each other. Buyers, sellers, tenants, landlords, investors, and managers can easily communicate with one another and keep up to date on information and operations. Especially for smaller companies, proptech can help to keep up with larger companies by more effectively performing difficult tasks and intensive research.

Steps for Integrating Proptech into a Company

            EY suggests three major steps to think through before implementing real estate software into a company. First, develop a technology strategy. Before choosing and implementing a software, a company must be sure of how it will align with their planned direction and how they can fully integrate it across the entire business and allow it to communicate with other softwares in use. Second, create a track to implementation. Due to difficulties often found with integration, there must be a plan as to how a platform will be used and how it will fit in with other programs currently used by the company. Third, develop a sourcing plan. Where and from whom the software comes can often be a sign of its usefulness and reliability. Balancing price and quality is something that should be discussed and fully researched before making a choice one way or another.

Problems and Hesitations with Proptech

            Many brokers and buyers are finding the transition to a more online system problematic, and some have not begun the process yet at all. The main reason stated by CRE professionals for not having integrated with proptech is the lack of end-to-end systems that can streamline every part of a real estate businesses day-to-day. With so many specialty software options out there, many companies have several software platforms that they have to manually integrate into a general ledger system. Some companies have begun development of such full-use platforms, but without widespread options, the adoption of proptech will continue to be slow in the commercial real estate sector.

Submitted by KJ Worley