changing market ,” says Frank Spadafora , real estate principal at DealCloud by Intapp , a vertical SaaS solution firm based in Jersey City , N . J . “ Manual , trailing data processes were historically sufficient to manage commercial real estate investments and operations .” But during the pandemic , property managers had to suddenly deal with immediate challenges , like buildings that were running at a 20-percent occupancy level . Multifamily owners needed data on tenant movements and rent analysis . Investment and asset managers , says Spadafora , “ had little to no real-time data to inform how COVID-19 was going to impact their portfolio .”
“ It highlighted that the outcomes we were trying to achieve lacked the data that we needed to monitor and measure ,” he says . “ It distilled [ data ] down into what ’ s really essential for effective and timely decision making . When [ companies ] started looking for this data , they realized that their systems and information were often fragmented and disconnected , and they needed a centralized view of this firmwide intelligence . That ’ s where this fundamental challenge in real estate , to capture and harness this information , was highlighted .”
But the need for integrated data was hampered by the promise of emerging technology . As proptech has heated up , Spadafora says he ’ s seen clients racing for point solutions such as smart building technology . “ They often were focused on individual solutions for functional processes like property management without understanding how that data was going to be integrated into enterprise decision making . It actually created additional challenges of fragmentation by increasing data velocity without the ability to understand and incorporate this new data into firmwide intelligence .”
A property management team might focus on adding technology to one building , “ and that certainly helped them operationally , but then they couldn ’ t integrate that data back into the C suite to make the big decisions about the portfolio . To make those decisions , we need to connect every single building and every property manager across the portfolio .”
This holistic approach , says Spadafora , will mark a separation of a company ’ s ability to compete . “ Those organizations that really focused on a foundational data strategy and governance are now better prepared because they ’ ve got better speed to execution , they ’ ve got a more connected workforce , and they can produce the data and analytics the C suite needs .”
SEARCHING FOR A SOLUTION The array of proptech solutions makes choosing one challenging . “ You talk to companies who are trying to figure out
PROPTECH ’ S GOLDEN AGE
what to pay attention to , and it can just be overwhelming ,” says D ’ Angelo . “ This isn ’ t new ; it ’ s been like this the last half dozen years . But there ’ s a lot coming at you to figure out , and people can just get stuck . What ’ s actually promising ? What ’ s real ? Where do you place your bets ?”
Choosing and integrating an approach requires careful upfront planning , says Spadafora . Strategy and clear outcomes are
The most proactive companies are pursuing multiple business strategies to stay ahead of change and innovation made possible by technology , and to identify and access optimal technological solutions as they become available .
essential . It ’ s important to ask questions about what the technology enables . “ That forces organizations to look at their internal culture and decision making and where they have the talent and resources among their people and processes ,” he says . “ Then they can align the technology that ’ s going to enable outcomes . It ’ s a methodical process in how you approach that .”
Once they understand the outcomes and the necessary technology , companies have several choices when it comes to developing a fully integrated technology plan . They can develop and implement a plan internally ; they can outsource the entire function or partner with a proptech company . “ You have to match the solution to your organization ,” says Spadafora . “ It ’ s not one size fits all .” Much depends on a company ’ s understanding of its own internal resources and expertise , and he cautions against automatically outsourcing without first determining those . If the decision leans more toward partnering with an outside group , “ you want to look at the provider holistically ,” says Spadafora . “ It ’ s not just what the tech can provide , but what can it enable you to do ? Could this partner grow with you ? What ’ s their funding like ? What ’ s their client base ? Could they be acquired by a larger firm ?”
Spadafora points to another option as well : software as a service ( SaaS ). These cloud-based solutions can be a good fit for companies that lack the resources to develop or buy larger-scale plans . Because it uses common cloud-based tools , companies can use SaaS to build systems without the overhead or complexity of large-scale in-house development . He points to DealCloud ’ s parent company , Intapp , as an example . Intapp recently announced a partnership with Microsoft that will allow the company to provide technology solutions leveraging a Microsoft Azure-based industry cloud .
Using SaaS , specific functions and access can be designed for different teams in the company , but now , says Spadafora , “ everyone is sharing one common data object across the enterprise .” The vertical cloud , he adds , is like a backbone . “ It can be a single point of repository for data , but it can also interface with other internal systems that may store critical data .”
MOVING FORWARD How should companies best proceed as they develop their own proptech solutions ? “ Real estate professionals should continue to read up on what ’ s changing in proptech and stay curious ,” says JLL Spark ’ s Singh . “ Building strategic frameworks and making technologybased decisions within them , as opposed to buying point solutions , will help overcome adoption barriers .”
D ’ Angelo ’ s advice is similar . “ As an individual company trying to figure out which is which , what do you look for ? You look around and say , ‘ Who else is doing it ?’ Some of that is dictated by how progressive a company wants to be in being technology driven or being early adopters , but I tend to see those companies with focused resources really looking at the landscape of what ’ s emerging . But some will wait and see simply because of resources .”
D ’ Angelo is optimistic about burgeoning proptech . “ I hope we ’ re going to look back on this and see it as a tipping point — that this is when it was no longer optional ,” he says . “ That owners , operators , developers will do this because that ’ s what it takes to have a relevant asset in a given marketplace . We could see a golden era . To enable a better occupant experience , to better understand what ’ s really happening in a building , to run a more efficient building — there will be a wave of both investment and innovation in real property technology .”
Sarah Hoban A business writer based in Chicago
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COMMERCIAL INVESTMENT REAL ESTATE MAGAZINE SPRING 2022