Project errors — especially unforced, preventable errors — have been the bane of commercial real estate (CRE) developers’ existence since a time when land was first bought and sold. Now, especially with the explosion of tech over the past several years, the best way to minimize project errors is through the implementation of state-of-the-art digital solutions.
Like many industries several years ago, CRE was in danger of falling behind in new technology implementation. But that’s no longer the case. From 2015 to 2019, property tech (PropTech) investment in the CRE space grew by 1,072%, and in 2018, venture capital firms invested $8.3 billion in real estate technology companies around the world, as reported by Forbes.
The pandemic has served to further accelerate tech adoption across myriad businesses worldwide, including CRE. And tech paves the path to reducing errors.
Correct live errors immediately
Real estate technology involves the integration of high-tech software applications and information platforms that enhance commercial investments and business processes; it is redefining how investors and real estate professionals find and handle properties, set up deals and communicate with co-investors and tenants.
PropTech gives developers a competitive edge concerning how properties are marketed, and buyers the ability to move more quickly on closing deals.
One of the best things about tech is that its proper implementation offers the ability to check the validity of data inputted at any stage of the land procurement or project construction phases. Automating the data process eliminates mistakes by taking human error out of the equation.
Use reliable data upon which to base future projects
Especially today, with both inflation and war threatening availability of goods and dictating rapidly fluctuating prices, it is not enough to base future projects on the last project performed.
Tech innovation has made it possible to not only collect large amounts of data, but also to render that information actionable. Data analytics provides for a better understanding of current market trends and allows for more accurate forecasts. Big data can reveal trends within audiences, determine pain points and more accurately triangulate on specific goals.
Deep data analytics forwards valuable insights for smarter investment decisions and more sophisticated forecasts, leading to better decision making, and therefore fewer errors, across the entire CRE continuum.
Real estate developers, owners and managers should look to tech to solve problems related to storage and retrieval of data from different software programs that cause double entry errors and cause issues with real-time report viewing. These types of data issues cause higher than expected costs in the development and management of real estate assets. The proper state-of-the-art solution can help accounting staff and managers become more efficient by decreasing the time it takes to produce reports to management, owners, partners and financial institutions.
Tech helps keep project cost down
In the CRE industry, developers are very dependent on project budgeting software, and this has increased through the pandemic. The best solutions in this space grow in lockstep with tech, and should give the project perspective as much attention as the financial perspective. A state-of-the-art solution allows the software modules or functionality to be project aware, with each module providing the necessary project perspective to complement the general ledger perspective.
Nearly all job-costing software emphasizes the subcontractor or general contractor perspective where the detail level drives the reporting. But success in the developer market comes from its ability to go beyond the details and show management top-level project status and the various detail levels that support it. The software solution must address the complete life cycle of a real estate asset: from project inception to project completion, and from pre-development to property management, in order to minimize budget debt and maximize profit, efficiency and client satisfaction.