Technology is set to play a significant role more than it already has, in the future of real estate investment. Not only will funds be able to invest in technology that creates smarter, more valuable properties, but they’ll use technology such as AI and data analytics to better understand what makes a successful investment and which factors should be taken into account when assessing opportunities. Adolfo Poveda, Senior Manager at Auxadi, shares his views on how technology will impact the sector and how firms can get the most out of new technologies.
In our recent report, ‘Market Adaptations: Maximising New Growth Opportunities in the Real Estate Sector’[1], real estate managers highlighted the expanded use of technology in the sector. 66% of our respondents said that technology will have a transformational effect on investment performance, and that the biggest impact on the real estate fund management industry over the next five years will be with the use of Artificial Intelligence (AI). When we delve into the data further and look at North American respondents, 77% agreed on the transformational effect, while a staggering 83% said the most benefit will come from AI.
Online real estate search platforms are now commonplace and not going away, but AI could be used to analyse data and bolster lead management. Market data analysis could be used to recommend properties to specific brokers (based on their past sales and niche). Analysis of customer interactions during the leasing or buying process could provide insight for customer services. AI-powered chatbots could also be used on your website to answer questions and make personalised recommendations.
AI could also be used for manual and repetitive processes, like data entry and modelling. Not only would this free up staff for more value-added tasks, but using AI would likely cut down on errors and increase productivity. What’s more, AI could be used to assess risk based on specific criteria set by the firm.
But the one biggest, most practical, and most effectual uses of AI is data management and analysis.
According to the Altus Group, many Commercial Real Estate (CRE) groups are spending 15-25% of their time managing and organising data – which equates to two to three months of the year. Time that could be better spent on far more value-added tasks. This figure, more than anything else, highlights the urgent need for technology in the sector.
In our report, 47% of respondents said that technology will offer greater operational efficiencies. For example, one of the most obvious data management tasks – documentation – can benefit from technological integration.
Every real estate firm, no matter the sector, produces and stores massive numbers of documents. Leases, appraisal reports, ownership records, safety certificates, legal papers, tax reports, zoning regulations, land management records – the list goes on and on. A single mis-file or mis-label can have far reaching consequences, affecting even a firm’s brand and reputation. AI could handle this onerous task and even link it to your online systems, so customers have immediate access to, for example, current certifications or land use records for a specific property. What’s more, an AI system could also alert you when new documents are due, when certifications are due to expire, when new appraisals are required, and even track and monitor interest in each property.
AI is also a useful tool for client data management. Not only could AI quickly and easily produce useful information to help strategic planning of your business, but such a system could also:
- analyse and track customer requirements/preferences against current and proposed portfolios,
- quickly and easily provide useful data on specific regions, markets, properties, clients and even sectors, and
- let you better monitor profitability and trends using customer and operational data to drive efficiency and growth.
Then there’s the assistance that technology and AI can give to your ESG criteria. Being able to easily track and monitor usage, costs, and trends for energy, waste, water, and even green spaces, could be a game-changer for your ESG planning. AI can be used to implement efficient energy distribution based on building type, season, and even the weather, using smart meters and systems integration. Not to mention that the compiled data can also be reported to tenants and residents, instantly boosting your reputation by letting them use the data to plan their own ESG strategies.
Technology and AI can also be used in property management to analyse and predict issues, to prevent occurrences like electrical outages, leaks and clogs. This won’t only help maintenance teams proactively maintain the essential systems, but tenants avoid disruption, and firms avoid exorbitant costs for emergency repairs. AI can even help with “replace or fix” decisions.
With technology constantly evolving, many real estate managers are concerned about failing to implement technologies successfully. Our report stated that 39% of real estate managers are already falling behind their competitors and a further 34% said that keeping pace with technology is a challenge. If you’re not already on board, then adopting new technologies is something you should be thinking about. The Altus Group report also says that industry consolidation of technology is imminent, with 49% saying it’s either already underway or occurring within 12 months. So, don’t get left behind your competition.
There are immeasurable ways that technology and AI could help your real estate business. And, with the ability to link AI systems with your outsourcing partner, you can receive real time updates for your accounting, tax, and payroll management, helping you to use data to your best advantage.
Now’s the time to start boosting your business with technology, and discover the benefits and savings you could achieve with data-driven decision making.
As a different type of fund services provider, Auxadi focus on how we can help you with your real estate investments. We’re a leading provider of accounting, tax compliance, payroll and SPV administration services and are trusted by 14% of the world’s top 100 PERE managers. By partnering with us, we can offer real estate firms many more options – there’s no time limit on the services we can provide, we can be brought in when needed and we can provide licenses from our ERP at competitive prices. We’ll also give you access to accurate and regular information which is easily consolidated and easily understandable.
Read our complete report, ‘Market Adaptations: Maximising New Growth Opportunities in the Real Estate Sector’, to learn more about the outlook for the real estate sector following the global pandemic and if you’d like to find out how we can help with your real estate investments, please do get in touch.
[1] Research was conducted by Auxadi via an online survey amongst a panel of 100 senior-level real estate fund managers in April 2021
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Founded in 1979, Auxadi is a family-owned business working for multinational corporations, private equity funds and real estate funds. It’s the leading firm in international accounting, tax compliance and payroll services management connecting Europe and the Americas with the rest of the world, offering services in 50 countries. Its client list includes many of the top 100 PERE companies. Headquartered in Madrid, with offices in US and further 22 international subsidiaries, Auxadi serves 1,500+ SPVs across 50 jurisdictions.
All information contained in this publication is up to date on 2021. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.