Commercial real estate has grown into a multi-trillion-dollar industry, largely without the benefit of purpose-built software or other tools designed to address its specific pain points. Today, however, its major players are steadily converting to a new way of doing business.
Every year, $15 trillion worth of commercial real estate deals are carried out in the U.S. alone. In spite of this, the industry has been notoriously slow to create and adopt technology to streamline how it manages this tremendous flow of transactions.
At Fort Capital, and at many other growing development firms, rising deal volume can easily reach a critical mass that limits the ability to execute. The development process is time-consuming and labor-intensive, and there is a growing consensus that legacy tools aren’t enough anymore to address the accelerating rate of change in the business environment. The real estate industry as a whole is increasingly searching for specialized software services to scale their operations and streamline the investment process.
The issue with “legacy tools” like Excel or Word is that they are hosted locally on individual computers and servers. This makes collaboration, version control, and transparency constant issues. More modern solutions like Trello (a card-based project management tool) or cloud-based spreadsheets — while great tool — are general business software instead of purpose-built real estate software.
More and more, however, savvy investment teams are implementing what we call “deal management” tools — cloud-based platforms designed specifically for commercial real estate that organize and streamline every phase of activity, from initial screening all the way to closing.
Here are three significant benefits that can be realized simply by taking traditional deal management to the cloud:
Tribal Knowledge
Most real estate investment firms consist of distinct teams, each responsible for a certain subset of tasks ranging from sourcing and due diligence to acquisitions and sales. Traditionally, each of these groups are walled off from each other, creating so-called “tribal knowledge” available only to disparate teams and individuals.
By moving data onto a cloud-based platform, many of those traditional barriers are broken down and employees are granted a window into every phase of the deal process. Collaboration across all subsets of an investment team is improved, resulting in better communication and equipping employees with access to a huge collection of data and institutional knowledge that otherwise might have been limited to a small group of people.
Compounding Friction
Executing a commercial real estate transaction is complex and difficult to manage, but the process is mostly linear. After screening a property, you submit a Letter of Intent (LOI) and go through underwriting and due diligence before making a formal offer and closing. To be sure, there are hundreds of individual tasks in between, and every deal is different, but the process is still sequential. You have to wait until every task is completed before moving on to the next step.
Friction in small doses can compound over time, and it can lead to huge delays later on. A few extra emails, a misplaced file, or a late report might seem like minor issues, but when spread across dozens of deals and thousands of tasks, the amount of time wasted quickly snowballs. By moving this complex process onto a single, centralized platform, the traditional friction associated with dealmaking quickly dissipates, freeing up employees to focus on true value-add activities.
Constant software adoption
No matter what industry you work in, you’ve probably had to go through the process of adopting new software — as well as the moans and groans that typically accompany it. Nobody likes disrupting their workflow with new software, but the commercial real estate industry has built a reputation as being particularly resistant to technological change.
By implementing cloud-based deal management, various tasks that may have previously required legacy software can be conducted in a single, centralized platform. In addition to streamlining and optimizing actual deal flow, it has the added benefit of cutting down on the constant trial and error involved with evaluating and implementing new tech tools.
Commercial real estate has grown into a multi-trillion-dollar industry, largely without the benefit of purpose-built software or other tools designed to address its specific pain points. Today, however, its major players are steadily converting to a new way of doing business — one that trades the painstaking process of manual spreadsheets and checklists for a more centralized, standardized, and secure workflow. While the list of tools aimed at streamlining or organizing such a complex process is ever-expanding, simply moving that activity into the cloud has the power to unlock previously hidden value that can help enable new growth and continue to push the industry forward.
By: Chris Powersn (GlobeSt)
Click here to view source article.
At Fort Capital, and at many other growing development firms, rising deal volume can easily reach a critical mass that limits the ability to execute. The development process is time-consuming and labor-intensive, and there is a growing consensus that legacy tools aren’t enough anymore to address the accelerating rate of change in the business environment. The real estate industry as a whole is increasingly searching for specialized software services to scale their operations and streamline the investment process.
The issue with “legacy tools” like Excel or Word is that they are hosted locally on individual computers and servers. This makes collaboration, version control, and transparency constant issues. More modern solutions like Trello (a card-based project management tool) or cloud-based spreadsheets — while great tool — are general business software instead of purpose-built real estate software.
More and more, however, savvy investment teams are implementing what we call “deal management” tools — cloud-based platforms designed specifically for commercial real estate that organize and streamline every phase of activity, from initial screening all the way to closing.
Here are three significant benefits that can be realized simply by taking traditional deal management to the cloud:
Tribal Knowledge
Most real estate investment firms consist of distinct teams, each responsible for a certain subset of tasks ranging from sourcing and due diligence to acquisitions and sales. Traditionally, each of these groups are walled off from each other, creating so-called “tribal knowledge” available only to disparate teams and individuals.
By moving data onto a cloud-based platform, many of those traditional barriers are broken down and employees are granted a window into every phase of the deal process. Collaboration across all subsets of an investment team is improved, resulting in better communication and equipping employees with access to a huge collection of data and institutional knowledge that otherwise might have been limited to a small group of people.
Compounding Friction
Executing a commercial real estate transaction is complex and difficult to manage, but the process is mostly linear. After screening a property, you submit a Letter of Intent (LOI) and go through underwriting and due diligence before making a formal offer and closing. To be sure, there are hundreds of individual tasks in between, and every deal is different, but the process is still sequential. You have to wait until every task is completed before moving on to the next step.
Friction in small doses can compound over time, and it can lead to huge delays later on. A few extra emails, a misplaced file, or a late report might seem like minor issues, but when spread across dozens of deals and thousands of tasks, the amount of time wasted quickly snowballs. By moving this complex process onto a single, centralized platform, the traditional friction associated with dealmaking quickly dissipates, freeing up employees to focus on true value-add activities.
Constant software adoption
No matter what industry you work in, you’ve probably had to go through the process of adopting new software — as well as the moans and groans that typically accompany it. Nobody likes disrupting their workflow with new software, but the commercial real estate industry has built a reputation as being particularly resistant to technological change.
By implementing cloud-based deal management, various tasks that may have previously required legacy software can be conducted in a single, centralized platform. In addition to streamlining and optimizing actual deal flow, it has the added benefit of cutting down on the constant trial and error involved with evaluating and implementing new tech tools.
Commercial real estate has grown into a multi-trillion-dollar industry, largely without the benefit of purpose-built software or other tools designed to address its specific pain points. Today, however, its major players are steadily converting to a new way of doing business — one that trades the painstaking process of manual spreadsheets and checklists for a more centralized, standardized, and secure workflow. While the list of tools aimed at streamlining or organizing such a complex process is ever-expanding, simply moving that activity into the cloud has the power to unlock previously hidden value that can help enable new growth and continue to push the industry forward.
By: Chris Powersn (GlobeSt)
Click here to view source article.
