There are now more than 130 companies creating technology to help the commercial real estate industry thrive and to make work easier for property owners and managers. A panel discussion at the Real Estate Strategy & Leasing Conference in Toronto this year examined how technology is changing asset management and where the future of office space marketing is headed. Moderator Monica Di Zio, marketing and communications manager at Crown Realty Partners, posed questions related to what technology to use and how companies can measure the success of products.
Looking back to the 1980s when a “good old handshake was the way properties were marketed,” Di Zio said some spaces are really starting to incorporate technology. The industry is shifting into augmented reality, 3D printing, robotic automation and drones, which are creating paths to imagine commercial real estate in new ways.
“Tenants are now more sophisticated than ever and commercial real estate has been slow to adapt to technology,” she said. “Our tenants are expecting more, so marketing campaigns have evolved.”
Deciding what technology to use
The commercial real estate industry has traditionally been lethargic when it comes to adopting new technologies, but businesses are starting to view change more positively, said Maria Aiello, vice-president real estate advisory and technology lead at PwC.
With so many technologies competing for attention, it can be difficult to know which one is best for business. With the ability to address gaps that once persisted, Aiello says industry should now look more closely at the solutions that can help properties and make sure marketing can be enhanced.
“There has to be some kind of a value proposition, said Aiello. “In the interest of the deal, the space, tenants and occupancy, I don’t think it’s one-size-fits-all.”
For Jennifer Allard, project manager of real estate investment information systems at HOOPP, data is required in order to know what is working and not working. However, many leasing teams have been using Excel spreadsheets for years, and they need to use tools so data can be collected in order find out what initiatives are working and generating leads.
“If the vast tools aren’t easy to use or if they don’t see value in them, they won’t use them,” she noted. “The value of getting them to use the tools so they have to data is key to making decisions.”
Peter Altobelli, vice-president and general manager of Yardi Canada, sees a lot of change in how to deliver marketing to potential clients and new tenants and how to service existing tenants. In the next several years, industry can expect more integration between products and services or interfaces with third party companies, along with the use of artificial intelligence and machine learning in marketing and leasing.
“Over the years I’ve seen an enormous amount of change in technology and how it delivers solutions,” he said. “The U.S. is so much ahead of Canada in terms of technology adoption, but it’s starting to change where new technology is coming out with real ROIs.”
When choosing technology, he suggests looking at the larger issues and working on acceptance. He spoke about the benefit of CRM tools and how sales teams often have a difficult time using them.
“If you want to automate your leasing teams, you have to get acceptance in that automation and try to drive what the benefit is,” he said. “If someone leaves and all their contacts go with them, you really need to understand how that is a problem for your company and determine how to solve it. Once you solve it, how do you deploy it and gain acceptance from internal staff? Or, if you’re using external brokerage, how do you get those brokers to use it effectively?”
Alain Cohen, president of Arcestra Inc., said clients are expecting them to find better ways to track supply and demand. His objective is to bypass CRM tools and look at newer technology platforms like Uber and Airbnb, which don’t utilize CRM platforms, but connect to supply and demand.
“I think our market is much more ready to adopt new technologies that reside on the cloud,” he said. “What we are working on is peer-to-peer communication; it doesn’t change the way you work, but captures a conversation.”
Improving product offerings
At Yardi, the team focuses on short-term and mid-term research and development. Products are developed based on listening to what clients need and ask for. But these products are now maturing. There are now more and more integrated solutions which are “feature-rich.” All software cannot be “sitting-at-my-desk type applications,” but more web-based and mobile.
“Arguably, there are a lot of great tools out there, but you have to have a strategy because the strategy is really important and differentiates organizations from others, added Aiello. “I urge you to create a strategy that incorporates all of your stakeholders and leverages investment in technology, which is always under the microscope.”
Software is now a service, and Aiello suggests using vendors as partners. Using the functionality of software vendors offer extends to both internal and external organizations, including tenants, investor clients and third party partners.
Software as a service is a major change that has made offerings more flexible, said Allard.
“Traditionally, you would go out and spend $10 million on a SAP solution, which you’re customizing and are kind of stuck. Software is a service; it’s cheap, it’s an annual fee and your biggest cost is change management. At the end of the contract, if you’re not satisfied, you can walk away and all you’ve lost is what you paid that year.”
Measuring the success of technology
“The success of technology is very difficult to measure,” said Aiello. “Traditionally, people thought it could come through savings and resources, but I believe that it leads to operational efficiencies and a means of reinventing your business.”
“The ROI you can get by implementing a platform that centralizes everything and makes things faster and better is really key to getting an easy pay back,” added Allard.
For Cohen, it’s a simple equation: the cost of empty space and the value of any vacant day surpasses skepticism of technology.
Quite often it takes too long to close a deal, Altobelli added. The people needing to make decisions need data and deal structures in front of them, rather than sifting through documents and emails to pull it together.
Immediacy is also key.
“How can you place a price on the immediacy of information,” posed Aiello. “Everyone has some kind of device. You can be in Santa Barbara or Asia and know that space is available or a deal is done. In terms of what vendors offer, it’s organizing data in such a way that it is available and something that can communicate to all of us in record time.”