5 Reasons Why Tenants Should Invest in Real Estate Tech
Last Updated on August 30, 2022 by Neil Patel Accel
Between 1952 and 2005, 1,500 malls were built in the United States, at a rate outpacing population. In the 1990s, at the peak of the mall era, there were 48 malls within a 90 minute drive of Times Square. Shifts in consumer behavior and shopping habits have changed real estate needs…and to the death of malls, which analysts predict 1 in 4 will close by 2022. Also by 2022, many analysts agree that the share of total retail sales driven by e-commerce will rise to 17%, an uptick of nearly 5% from previous year’s estimates.
The first wave of CREtech, or Proptech, has focused on landlords, brokers, developers, and investors in real estate. Tenants, unfortunately, have been largely overlooked. In this interconnected Digital Age, it is time for tenants to invest in technology to drive change in how they manage real estate decisions. Those who are slow to adopt to technology will end up losing to competition and fall behind. We offer 5 compelling reasons why tenants need to invest in real estate technology:
1. Technology keeps you organized
A new wave of innovative and tech savvy companies are investing in software to stay organized and centralize information as they manage their portfolio. They are finding that current Lease Administration and IWMS software offerings are outdated from both a functional and user interface perspective, and instead are turning to platforms that facilitate day-to-day real estate responsibilities and tasks. Fully integrated tools, like alerts and notifications, project management, and real time reporting keep team members updated on all portfolio activities and eliminate any costly mistakes.
2. Technology drives targeted business decisions
Leveraging technology to centralize high level and detailed information helps growing companies better analyze their portfolio and make strategic business decisions. Real estate teams should be able to immediately find important lease information, from pricing to contracts, in seconds, supporting real-time decision making and spurring action.
3. Technology helps you track progress
Leading companies are turning to data to make informed decisions and measure success. Sweetgreen, for example, is known for collecting customer data to offer suggestions on dishes based on their taste buds, building loyalty and repeat business. But their use of data does not end there. Their real estate decisions also rely heavily on data, with the team analyzing optimal square footage, pricing, and terms of past lease and sales transactions. Analyzing data does not have to be painful. Technology can be used to aggregate and visualize leasing data in which teams can track overtime to ensure a healthy portfolio.
4. Technology strengthens relationships
Technology can serve as a collaboration space between team members. Companies across all industries are using software like Occupier to ensure that all team members are able to easily access the same, updated information. This prevents duplication of work, leads to real-time communication, a more disciplined work process.
Technology can also be used to manage relationships with third-party brokers and landlords. We have seen this statement proven true with VTS, who has replaced paper communication between landlords and brokers when tracking leasing activity across rental property portfolios with intuitive software.
5. Technology matters in retaining talent
Many fast growing quick service and fast casual restaurant chains are looking to grow footprints by 100 percent over the next couple years. The prospect of growing a real estate portfolio to meet expansion goals can be a daunting task if processes are disorganized and there is poor access to critical information. This can lead to an overworked and overwhelmed real estate team. Technology can help support professional growth and lengthen employees’ tenure at a company. Softwares that organize work flow and outline clear, actionable steps help team members track their own personal progress and contribution to company goals.
Tenants should be incorporating technology into their daily business operations to manage deals and portfolios, increase transparency among teammates, and strengthen relationships with brokers and landlords. The risk of inaction is high. Tenants who fall behind the technology curve could risk mismanaging portfolios, miss out on lease opportunities, or fail to meet growth goals. Investing in portfolio and deal management platforms, like Occupier, will help tenants meet company and team goals.
Check out our Lease Accounting Resource Hub for additional guidance.