300 CRE businesses confirm automation matters more than ever
Understanding the assets, income potential and underwriting commercial real estate has traditionally been a very time consuming process. Fortunately, today’s technology can automate many time-intensive real estate functions – underwriting, mortgage servicing, lease and rent roll abstraction – to allow CRE brokerages and mortgage servicers to trim overhead expenses and improve profits.
Over the past few months, many CRE businesses found themselves more reliant than ever on technology to maintain activities and operations. And those businesses already taking full advantage of technology want their partners and suppliers to follow suit.
At a recent Chicago capital markets event sponsored by Clik.ai, Bisnow conducted a poll among 300 participating companies and found that a strong majority of CRE business are pushing hard for technology to become a more prominent player in their operations. A few respondents expressed frustration with their position behind the technology curve. How do businesses determine whether the time is right to upgraded technology and shift away from time- and labor-intense manual processes?
How does the commercial real estate industry view advances in technology?
Real estate players often operate in the spirit of 'If it's not broke, don't fix it." Especially for established businesses, this philosophy may have served them well in the face-to-face economy running at full capacity. Over the past three months, however, with social distancing measures in place, “virtual” became the new normal. CRE brokerages and mortgage providers that may have remained hesitant to invest in new technology at the beginning of the year found that they had no choice by the end of the first quarter.
Which processes can technology enhance?
The Bisnow poll asked respondents about technologies designed to automate repetitive tasks and assemble data to facilitate analysis. These processes include building Excel and Argus models, and manually reviewing transactional documents. Over half of 77 responses to this question indicated a time commitment of five to ten or more hours a week to develop models and review documentation. We’re all familiar with screen fatigue, which can lead to errors in reading, transposing numbers or transcribing to the wrong field on new documents. While technology is never the entire solution to eliminate these common human errors, it can make a big difference.
How will technology help commercial real estate?
Automation tools that extract data from Excel spreadsheets and multiple-format documents to produce PDFs, allow an analyst to reclaim time otherwise spent on repetitive tasks and focus on interpreting the data. These powerful tools can assemble needed data in a matter of minutes, rather than days. The analyst is now available for more value-adding functions, like analyzing bigger and better deals.
Who can benefit from adopting a pro-technology mindset?
Respondents to the Bisnow poll estimated their cost to complete repetitive tasks at between $500 to $1,000 or more per month. Automation tools make it possible to greatly reduce that type of overhead expense. Scaled over a large company with many analysts, those savings become even more impressive.
When will commercial real estate seriously embrace technology?
The poll asked respondents to project a timeframe of industry readiness for AI technologies like automated rent roll analysis, asset management reporting and lease reviews. Only 15 companies indicated that the industry is not prepared. 16 companies expressed hesitation but said they are willing to invest in more technology for their company – for their own future and the overall betterment of the industry. A similar number of respondents reported that they make full use of technology today and will continue to do so. The remaining 20 companies are eager to take advantage of technology but need help to scale what they perceive to be a steep learning curve.
Where can companies turn for guidance?
Help to select and implement automation technology is readily available. Companies like Clik.ai have been partnering with banks, CRE mortgage servicers and CRE investors to enable them to take advantage of such technology. Rather than continue to handle repetitive tasks in house, these CRE business tap into a provider’s full team of real estate analysts and automation tools, boost the speed of analysis and repetitive tasks by a factor of 10, and reduce cost for in-house operations by 50%. This type of service allows professionals in the commercial real estate industry to focus on business operations that will help them grow – and stop wasting resources on processes that cost time and money.
Over half the Bisnow poll participants share a conviction that commercial real estate operations are transforming – moving from a reliance on manual processes to embrace technology and use it for growth. These companies at the head of the pack will help commercial real estate advance from the dark ages and embrace the technological mindset in 2020.
Photo courtesy: bisnow.com