Data Drives Success

Yardi EU Perspective

By Richard Gerritsen on Aug 6, 2020 in Global

Real estate asset management firms are facing extraordinary challenges in the aftermath of the COVID-19 outbreak. Some may emerge from the crisis relatively unscathed. Others might not be so fortunate. Social distancing requirements and work-from-home strategies, prompted by COVID-19, have rapidly amplified the importance of operational and financial data, its accessibility and team connectivity. What matters almost more than the data itself, however, is the means of obtaining it efficiently and using it effectively to benefit clients, investors and other stakeholders. That’s not easily done without the right technology.

In the world of real estate asset management, data comprises information that reveals a portfolio’s health, such as revenues, debt, risk, occupancy and sales, along with property-level operations such as energy consumption and accounts receivable. Two distinct groups need this data: operations groups tasked with effective management of the portfolio, property and tenants; and those who focus primarily on investors along with the organisation’s tactical and strategic issues.

Some systems compile data from multiple disparate systems, making usable data a moving target. This approach – which prevailed in most property management industry vertical markets until the last couple of decades — is complicated, cumbersome and prone to error. For asset and operations managers to remain nimble, act proactively, anticipate and react decisively, they need a way to stabilise and gain instant access to it. That’s why connectivity is the key value proposition in asset management and the reason that sophisticated yet user-friendly asset management software applications that collect, process and apply such data across the asset management lifecycle are increasingly relevant.

All user groups benefit when the data their business depends on is readily available. Fortunately for them, today’s asset management technology platforms assimilate all asset management information at the property and portfolio levels and makes it universally available. The most advanced among them combine deals, budgeting, construction and maintenance in a single connected system, aided by machine learning recommended actions customised for a company’s operations and competitive environment.

With full information readily available in one database, asset managers can evaluate pipelines, match deals with investors and form an effective management plan. They can also evaluate their properties’ rent and expense performance against target properties, tie capital calls to investment lifecycle data, automatically generate reports, and project how any given asset will impact an investment fund’s overall allocation. More efficient deal execution that coordinates all leasing processes and market intelligence activities helps increase revenues.

At the property level, data collected within a single platform enhances asset values by driving new operational efficiency. Tenants can make payments online through a portal without paper and mailing expenses. Vendors easily enter invoices and collect remittances. Building operators can take advantage of automated platforms that leverage energy consumption data to reduce the cost of heating, air conditioning and ventilation system operations without impacting tenant comfort.

Meanwhile, automated construction management systems leveraging real-time information on capital projects help keep projects on time and on budget. Data collected from installations, machines and buildings transforms maintenance from a reactive function driven by breakdowns and complaints to an asset that saves money, enhances building occupant satisfaction and eventually reflects in enhanced values, sales prices and attractiveness to investors.

We’ve seen in 2020 how quickly boom times can yield to uncertainty. Asset managers equipped with connected technology that encapsulates the entire real estate management lifecycle are best positioned to endure challenging times and thrive when crisis abates. The competitive edge and faster, better-informed decisions made possible by advanced data collection technology never go out of fashion.