How Real Estate Technology Has Changed Since COVID-19
Summary
A few months ago the “adapt or die” scenario for real estate technology appeared far off on the horizon
The combination of stay-at-home orders and layoffs has made the concept of a digital transformation suddenly very tangible.
Technology solutions in June have seen dramatic improvements to capabilities and fundamental changes to delivery methods than their predecessors in March.
A few months ago, the digital transformation of commercial real estate was just a trend to keep an eye on. It seemed to be following the familiar pattern of early adopters, early majority, late majority, and laggards. There had been home runs and epic failures, but the “adapt or die” scenario appeared far off on the horizon.
The coronavirus has changed that. The combination of stay-at-home orders and layoffs has made the concept of a digital transformation suddenly very tangible. Accessing critical information anywhere, at any time, from any device became a “need to have” basically overnight.
As they say, necessity is the mother of innovation.
Three months is a drop in the bucket for commercial real estate investments, but it is an eternity for technology companies. While owners and operators have been reacting to dramatic changes in tenant behavior, new cleaning and ventilation requirements, and rent shortfalls, technology companies have been in the midst of an exceptionally productive time driven by clarity of mission.
No doubt, there have been pure marketing campaigns that are leveraging COVID-19 simply to sell the same solutions. But just as often, technology solutions in June have seen dramatic improvements to capabilities and fundamental changes to delivery methods than their predecessors in March.
These are not necessarily related directly to dealing with the pandemic. The one consistent theme is the democratizing of information and rapid transition from manual and paper-based processes to automated and digital ones.
People have been calling the digital revolution in commercial real estate for years, but even those evangelists likely don’t understand the level to which the coronavirus has been a catalyst. In many ways, this is a point from which there will be no turning back.
Scalability
The first real estate technologies to scale across large portfolios were on the brokerage and asset management side. If data already exists in spreadsheets and databases, it can easily be transferred into the cloud for analysis. Just as importantly, owners and operators could easily envision this process happening.
But what about the digital transformation of physical assets to keep costs low and tenants happy?
From an owner or operator’s perspective, there have long been solutions that didn’t take much imagination to envision across a portfolio of hundreds of buildings. Things like digitizing utility bills or simple preventative maintenance software. The problem is that, while scalable, these solutions provided only marginal value and were each delivered individually.
On the other end of the spectrum, landlords have been piloting technologies that would use much more granular data derived from sensors to provide insights. These insights could be highly valuable, directly saving tens or hundreds of thousands of dollars of operating expenses. However, gathering this data was necessarily more difficult and more expensive.
Unfortunately, no amount of case studies demonstrating fast payback periods and substantial ROI could make these more powerful solutions scalable on their own. Each property had different budgeting considerations, requirements, and personalities on site. No matter how much sensor costs fell, and installations were streamlined, it was simply tough to envision these solutions across a massive portfolio.
So, what has changed since the COVID-19 outbreak?
In the most basic terms, these two concepts have been combined. Now, owners and operators can get started immediately with software-only solutions that digitize information, streamline workflows and get teams used to working with mobile apps.
From there, the same solutions can be powered up with high-value solutions as needed in each asset depending on budget, sophistication of the team and unique needs. While seemingly subtle, this innovation in delivery method has all but solved the scalability question while also giving each asset the bandwidth to make the decisions that make sense on site.
Platform
Of course, the best delivery method doesn’t help much if it has to be repeated for every type of technology that a company needs to run the business. Even within the major departments of leasing, asset management, operations, sustainability, construction and property management, there are multiple functions that need dedicated software solutions.
In the example of building operations, the same portfolio could easily have a preventative maintenance software, a building management system, an energy management system, a tenant submetering vendor, and any number of point solutions for things like leak detection.
When this is the case, it doesn’t seem like that big of a deal. At Enertiv, we used to have a different software for customer relationship management, internal messaging, email marketing, project management, software development, analytics, digital signatures, social media, and accounting.
Everything worked. But when the switch was made to a single platform that connected all these various aspects, there was an explosion of productivity and collaboration. Now, any team member can instantly pull up any piece of information they need, and workflows pass between teams automatically to reduce errors and things “slipping through the cracks.”
Due to the strains caused by COVID-19 forcing owners and operators to do more with less, coordinate across departments, and work remotely, there is greater alignment than ever between platform technologies and commercial real estate.
In addition to the benefits of centralizing information and tying together the workflows and analytics of different teams, there is a direct economic benefit. Simply put, in nearly every case, it is less expensive to manage multiple initiatives through one platform than to purchase the software for each initiative individually.
Conclusion
The past three months have changed real estate technology in subtle, but powerful ways. While the ideas of scalability and comprehensive platforms have been marketed for a long time, this crisis has been the crucible necessary to turn the marketing into reality.
As many have noted, the disruptive nature of the coronavirus has dramatically accelerated the trends that were already in motion.
The takeaway is that owners and operators who have evaluated technologies that appeared valuable but were too big of a lift to implement should be reconsidered. A lot may have changed since last time you spoke.
Enertiv has made our platform more scalable than ever. Schedule a demo today to see how.