The three most important characteristics of commercial real estate technology for the post-COVID-19 world
Last Updated on March 9, 2023 by Morgan Beard
As the COVID-19 pandemic continues to challenge existing frameworks of how we live and work, the commercial real estate industry is experiencing a sudden upheaval due to social distancing guidelines that prevent business from happening in person. An industry that has traditionally relied on in-person meetings for collaboration is being forced to rapidly adjust to the virtual world. This acceleration is shining a light on cloud software as both a challenge and opportunity.
For tenants and tenant representation brokers, it seems as though the cloud has pulled business forward by five years during the past five months. Tenants relying on antiquated lease administration platforms, or even worse, spreadsheets, are being forced to reckon with the compounding effects of siloed systems, disparate data, and inefficient processes. On top of this, new lease accounting standards are forcing companies to spend hours tracking down information to remain in compliance. Meanwhile, tenant representation brokers, who previously communicated offline using documents, phone calls, and handshakes, are now being forced to collaborate in real time, remotely. It is becoming clearer that the only way to ensure continuity, communicate effectively, and mitigate business risk is by transitioning to cloud-based applications.
When evaluating cloud-based lease management, lease accounting, and transaction management applications, real estate teams and brokers should consider prioritizing the following characteristics of the software:
Simplification: If a software tool does not simplify a business process, then it only adds more work and confusion. Commercial real estate workflows are among the most varied and complicated. Take the process of identifying a new location and negotiating a lease. Not only do local markets, brokers, and landlords behave differently, but the sheer amount of information to share and sift through presents an overwhelming amount of attention and time spent. If a lease deal typically takes 18 months from start to finish, how much “work” can be simplified or removed from the process to reduce the transaction cycle to 12 months? By centering a multi-disciplinary team around a process in a software solution that is simple to use, real estate teams and their brokers can free up their time for other impactful work, and rapidly adopt a cloud-based approach. This will ensure maximum ROI for the business, and transform a critical business process from manual to digital.
Collaboration: With much of the world being forced to rely on remote collaboration tools like Zoom and Slack, it can be argued that the old way of in-office collaboration will become a thing of the past. Therefore, any business process that relies on multiple stakeholders will inevitably be forced to rely on remote tools. Lease Administration is an example of a business process that has typically relied on outdated methods for data sharing (spreadsheets, PDF lease abstracts or back office ERP systems), and has been disconnected from other areas of the business. As tenant rep brokers complete lease transactions resulting in signed leases, the data from those leases should seamlessly transition into a lease administration platform, and subsequently power lease measurements that comply with lease accounting guidelines. If this can be achieved, then a single cloud-based application can serve as the connective tissue for external brokers, the real estate team, business stakeholders, and the finance department. Without collaboration, handoffs are missed, data is leaked, and mistakes are made.
Security: A distributed workforce relies on a vast network of connected devices, software platforms, and infrastructure. Unless these aspects are secure, then the company is at risk. Important financial information that is shared among team members, both internally and externally, should be securely managed. Businesses looking to transition their real estate workflows to the cloud should make sure an application can support single sign on, demonstrate the necessary data protection capabilities, and be able to rapidly respond to customer issues.
It is still uncertain what the future holds for the future of work, but one thing is certain: the demand for cloud-based real estate software has increased as companies shift to distributed work arrangements. Focus on these three characteristics of your cloud application selection, and you will be moving in the right direction.
Occupier and the Transitioning to the Cloud
As companies try to make sense of their workplace and real estate footprint in the wake of the COVID-19 pandemic, it is no longer sufficient to rely on manual processes for lease administration, lease accounting, and transaction management. Occupier provides an all-in-one solution, automating the entire real estate lifecycle from new site selection through FASB ASC 842 compliance. Without a centralized system with one source of real estate data truth, it is inevitable that costly mistakes will be made. By transitioning the real estate workflow to Occupier, business will not only realize time savings, but achieve future goals through mitigating risk and making better real estate decisions.
Interested in learning how Occupier can power a more efficient and accurate workflow for your real estate team?
Check out our Lease Accounting Resource Hub for additional guidance.