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Spreadsheets in Real Estate Are Ripe for Disruption

Some designs are so perfect, fit their purpose so well that they can’t be improved in a substantial way. Things like the Carerra 911, the stapler, the book, Craigslist. Yes, Craigslist, the utilitarian website that was once of the first wave of internet aggregators but somehow managed to keeps its basic interface since its early years. 

You could make a case that a spreadsheet is just a basic matrix layout that has been used in mathematics for centuries. It’s a digital representation of a time-honored way to store information. Look at the stickiness of Microsoft Excel in finance, particularly real estate finance. It is used to model out properties and weigh investment opportunities right now in every city in the world. Spreadsheets offer a simple and relatively intuitive way for teams of all sizes and compositions to perform the analyses they need to do business. Whether the person doing the modeling is a principal or an assistant, it’s still spreadsheets that the industry relies on.

So has Excel reached peak design? Is it the final iteration of the concept? Does the fact that it is ridiculously popular mean that it is objectively good?

According to William Sankey, the co-founder and CEO of real estate intelligence and productivity software company Northspyre, the answer is no. “Real estate is one of the rare remaining capital intensive industries where 90% of teams are entrusted to manage their investor’s $500 million plus projects in error-prone, convoluted spreadsheets,” William said. 

Like many, William believes that spreadsheets are incredibly time-consuming and prone to error. With spreadsheets, project teams are losing out on access to critical insights and information needed to make fast, data-informed decisions throughout the project lifecycle. Spreadsheets and legacy software provide an inflexible, stagnant display of data and require even more time and energy to dive deeper into the true meaning behind financials such as sourcing backup documents from various filing systems, cross-referencing requisition periods, etc.

Replacing Excel spreadsheets would, of course, be a tremendously huge task. But industry players like Northspyre, and Altus Group’s ARGUS software, represent an important step on the road to offering a flexible and easy to use alternative. “We believe that developing intelligent digital tools and technology for all aspects of construction and development will transform the way professionals build our cities and infrastructure, leveling the playing field for smart and nimble firms, increasing transparency and enabling even greater growth trajectories in our formerly slow-changing industry,” William added.

There’s an important conclusion in William’s words. Harnessing software platforms that can automate processes, particular ones as central as those that rely on spreadsheets, represents a very real opportunity for smaller companies to gain a competitive advantage against the industry-leading firms which otherwise may have economies of scale and the ability to throw larger teams at real estate challenges. Smaller companies can roll out new software solutions firm-wide quicker and more efficiently, bringing the entire business to a new level of productivity, while larger companies may see advancements on particular teams but lags on others.

That ease of adoption could make all the difference. Efficiency-boosting platforms are effort multipliers. Jumping on the bandwagon now opens up money and manpower to move onto new projects and challenges that much sooner, thus accelerating the growth of businesses that read the writing on the wall early: efficiency boosts will continue to accrete with time, pushing early adopter firms continually farther than the rest of the pack, perhaps regardless of size.

Just because we have settled with spreadsheets does not mean that they are the pinnacle of their form. There are better ways to organize information, we just need to adopt them. We should always look to improve on the status quo. Switching costs can seem daunting until you compare them with opportunity loss. Replacing spreadsheets seems like an inevitability. I can’t say the same for Craigslist.

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