3 Ways Commercial Real Estate Will Be Different in 2021 & Beyond
Turner Levison | September 18, 2020
As Buzz Lightyear enthusiastically says in the movie Toy Story – To infinity…and beyond! The feeling in the industry is that events of 2020 will change the industry for infinity and beyond. In real estate the mantra has always been location, location, location. As we move into 2121 real estate may have a new mantra – Digital, Digital, Digital.
From a digital workforce, to digital marketing, to a digital handling back office CRE principals are trying to decide how most economically move their businesses into the 21st century. With a plethora of real technology companies created over the past five years many real estate executives have developed analysis paralysis unsure of what direction to take. If we are honest, technology makes real estate executives anxious. It can be overwhelmingly confusing. Sometimes it’s hard to even know what the right questions are to ask, much less implement an overall technology strategy.
In commercial real estate there are no “best practices” for a tech stack because it’s still new in comparison to other markets. The only best practice is: as long as the tech stack you choose aligns to your brokerage’s needs, and allows your company to improve your productivity and profitability then you can’t go wrong. One of the first areas real estate executives are having to navigate is what a digital workforce will look like for their specific organization. Real estate executives are in uncharted waters as we try to understand the psychological effects of a remote workforce on our businesses and our team.
In our discussions with real estate principles their primary concerns have focused on understanding how working remotely will affect their company’s productivity, culture and most importantly their teams emotional and psychological well being.
In defining their digital workforce executives have also discussed the need to evaluate internet speed of their workforce many who are having connectivity issues working remotely. Additionally executives we spoke with felt selecting the right communication software was critical to setting up an effective digital workforce. Some of the more frequently used platforms are Slack, Microsoft Teams and Trello.
Selecting the right video communication platform can also make a difference in maintaining your company’s culture and team interaction. Some of the most popular video conferencing platforms are UNITE+Intermedia, Zoom, GoToMeeting, Skype and Google Hangouts.
Even before COVID-19 became part of today’s culture, the use of new digital platforms by owners and brokers to market their properties had already seen a significant increase. The national shelter in place order during this past Spring saw a proliferation in the adoption of digital marketing by landlords and brokers. Even as the country prepares to reopen, digital platforms are still gaining traction as the most efficient and cost effective approach to marketing real estate of all types. During the past three to five years there have been a multitude of digital platforms created to market property directly to tenants, investors, and broker representatives in addition to Costar, Loopnet, Cityfeet and TenX. Some of the most popular new platforms include CREXi, biproxi, Brevitas and Real Capital Markets.
In addition to these new marketing platforms a number of new tools have also been developed to help automate the creation of marketing materials in this new digital age. Some of the best platforms being utilized by real executives to create their marketing materials and virtual tours include, Buildout, Matterport,TourWizard and My360 tours.
As real estate principles are trying to understand and evaluate the best approach to creating a digital workforce and internally automate and digitize their marketing departments they are also preparing their back office to operate digitally at maximum efficiency. A recent study by Wells Fargo outlined the struggles many businesses are moving away from desktop computers, paper-based processes and outdated systems. The study discussed how automation can make a positive impact when companies shift away from outdated legacy systems. Automation, through providing real time information, can also dramatically improve cash flow forecasting and budgeting especially important in today’s uncertain environment.
The study also outlined how estate back office operations of the 21st century will require a different mix of skills than the historically traditional role. Real estate back office professionals of the future will include strategic thinkers, adaptable to new and evolving technology and individuals with good collaboration skills. Financial knowledge will still be essential—but it’s no longer the only strength that will be required.
Several of the real estate executives we spoke with felt when implementing new processes and procedures into their back office best practices should include reviewing and implementing:
Cloud based process for paying vendors, employees and agent commissions. Executives felt automation built into these new procedures will help eliminate human error and dramatically increase productivity which typically leads to increases in profitability.
Systems should also provide managing brokers and principals real time access on their brokerages KPI’s allowing them to keep their finger on the pulse of the organization through instant access to business-critical information.
Moving away from paper checks and moving to internally creating ACH and wire transfers, and providing direct deposit for employees and agents was also mentioned as a key component of moving to a digital back office.
Some of the most popular accounting packages providing these features for real estate executives to consider are Quickbooks, Avidxchange, Yardi, MRI, and CommissionTrac.To fully move into a digital back office companies need to also utilize options to electronically accept vendor payments for commissions and company expenses. A few of the more popular financial platforms are Paypal, Stripe and Chargee and for national and global operations Braintree owned by Paypal offers more robust options.
Executives we spoke with also felt often overlooked, but critical to a successful transition to a digital back office and marketing department was the vendor’s customer success team. Within the SaaS industry there is a standard metric used to measure custom success departments of organizations. The metric is known as the net promoter score (NPS) score, and requesting the metric from your potential provider will give you an idea of the quality of the company’s customer support.
CommissionTrac is here to assist you with all your back office needs, and all the reporting needs associated therewith. To find out why over 1,000 users and affiliates of Colliers, CBRE, Cushman Wakefield, NAI, SVN, Lee & Associates, as well as largest national ‘tech-enabled” brokerage business, TenantBase have chosen CommissionTrac as there back office CRE platform – request a demo today by visiting our website.
Authors: Daniel Levison – CRE Holdings (CommissionTrac, Commercial Property Consultants, SharedSpace) and Turner Levison, CEO, CommissionTrac