Chasing deals in a competitive marketplace is a race that requires equal parts smart analysis, strong due diligence and rapid decision-making if you want to win. None of these are possible if your team is manually entering or compiling data from multiple sources for input into one or even multiple systems. However, a dealmaker today can gain a competitive advantage over a less tech-savvy competitor simply by using a cloud-based valuation, forecasting and data platform.
Too much time in our industry is wasted on manually assembling data from disparate applications and systems. Nobody knows that better than me – I used to be the guy tasked with doing so. Automated data integration will be the hallmark of commercial real estate technology ecosystems of the future, I’m sure of it.
Software based on the complicated data set required for sophisticated commercial valuation doesn’t happen overnight. Leaving the Tower of Babel of disparate systems behind, open APIs and cloud platforms have already made it possible to aggregate data in real-time from different sources without egregious implementation costs. But you’ve got to have a mature, field-tested system that you trust. The good news: with prudent technology decisions, it is possible to cut out weeks of manual work. This efficiency improvement will give more time back to highly trained commercial real estate investment professionals for more important activities like real bricks-and-mortar analysis, creating what-if scenarios, understanding the market/submarket, and recommending compelling investments.
Is your real estate valuation and investment ecosystem an impediment to the success of your team? Ask yourself the following:
Can I quickly integrate data across every step of asset lifecycle?
Technology needs for every company vary and many will require platforms for everything from accounting and leaseadministrationto asset management and valuation, to name a few. In a successful technology ecosystem, data can flow easily from one platform to another while automatically providing end-users with complete data sets.
To make sound commercial real estate investments, data is fundamental at every stage. When you’re buying an asset, you need information pertaining to building operations, cash flows, capital expenses, potential risks, market assumptions, and more. When you’re transitioning assets from the previous to the current owner, you need accounting data and property files. After closing, you need information about lease agreements, property management, building operations and many other aspects of a property. Finally, you eventually sell the asset—returning back to the need for valuation and due diligence data.
With legacy valuation systems and archaic practices, the lease data alone can constitute a major headache—especially if a transaction encompasses a property portfolio. Reviewing lease agreements and manually inputting data into your accounting system can become incredibly stressful in the days before or following a closing.
With a Web-based platform, you can integrate data directly from a leasing and asset management platform to real-time valuation and even share information with other parties involved in the transaction. A Web-based platform will include flexible, open APIs that enable seamless integration with other data sources throughout the transaction lifecycle—without the high cost of manual system integration.
Are my investment analysts spending their time analyzing data—or entering it?
Investment analysts are smart people who know how to interpret the numbers to give buyers and sellers a true picture of value and risk. Yet, that brainpower isn’t always used for its highest and best purposes. Using legacy systems, an analyst might spend 80 percent of their time gathering data and 20 percent on the analysis of the data—the meaningful work.
In contrast, with a cloud-based system and seamless data integration, an analyst can spend 20 percent of their time on data issues and 80 percent on the important business of analysis. New technology means your return on investment in analysts is much greater, because they’re spending more time on transactions, creating better analyses and encountering fewer errors in the data.
Are my property valuations accurate across my portfolio?
Trusted valuations and smart investments are built on a thorough understanding of a property’s operating costs and cashflow. That’s where the traditional manual aggregation of data can create problems. Typically, there’s a lag between when a person receives data and when they manually put it into a spreadsheet. And, even the best typist will undoubtedly make a mistake at some point.
Accurate and current data is essential for a smart decision. For instance, can you confirm that data concerning tenant leases is up to date? Can you trust that the operating costs are stated accurately?
Automation can solve these problems. Today, you can use a cloud-based valuation platform to automatically integrate real-time data from validated sources, including VTS, Yardi, Real Page and MRI, to inform a current analysis of individual properties or an entire portfolio. And, you can quickly model scenarios, including leasing and debt assumptions, and compare insights across your portfolio.
Faster, smarter investment decisions
With today’s technology, you don’t need to slow down the dealmaking with manual processes, or risk faulty conclusions based on lagging data. The cloud has come to commercial real estate technology, making it possible to create a technology ecosystem that supports even the most complex property investment analyses. With the right tools at your fingertips, the deal race will be yours to win with faster, smarter decision making.