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A future-proof framework for CRE investments

by Ana Lopez
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Mike is the co-founder and CEO of dealpada cloud-based software platform for investment and development teams in commercial real estate.

Investors wanting to compete in the new real estate game are approaching business with a new framework – one that gives them speed, foresight and agility.

Almost every week we read about institutional investors such as Brookfield, Starwood or Blackstone taking over another large real estate portfolio or setting up a new billion-dollar fund. They have improved the way they do business to adapt to the times: they operate at scale with speed and precision despite the volatility of the market. They play what I see as the new real estate game.

Big companies have learned from the “noiseby using data to focus on what the real estate market is telling them. Thanks to a new landscape of proptech, it is now easier to collect data, collaborate and extract insights from it than ever before.

With the right framework and strategies, data-driven proptech can enable you to remain agile in turbulent times and help you manage change; this new toolset allows forward-thinking investors to adopt the same methodologies as industry giants and gain a competitive advantage.

A new methodology

My firm has worked with hundreds of real estate investment managers, from smaller boutique and mid-market companies to industry giants. Based on this experience, we came up with a new framework for understanding, competing and operating in a rapidly changing landscape. This framework has four key components: data, automation, collaboration, and scale (DACS). I think you can best apply this framework in your own company in the following way:

1. Use better data and insights.

To drive business, data must be easy to collect, understand and apply. It should be accessible from where professionals work, and it should be usable for future transactions. To extract actionable insights from this data and systematize data-driven investment decisions, they also need to be structured and formatted in logical ways. In short, data needs to be centralized to ensure accessibility for everyone in your organization.

To do this, as teams process the weekly deal flow, build a rich global database of every asset and deal that can be easily used across the organization – programmatically assembling a valuable database and making it easier for key stakeholders to to collect, understand and apply this information now and in the future.

Consider some important required fields at the time of deal creation and through the stages of the deal. This strengthens the collection, its use and your data hygiene. Evaluate whether data fields should be free form, a drop-down list, or a calculation, as well as the format in which to display the value. This also helps with the standardization and usability of your data.

2. Take advantage of automation.

When investing in real estate, time is money. Accuracy and speed are both essential. Of course, those are often at odds with each other. Skilled professionals often perform repetitive administrative tasks to make sure every number is accurate.

Workflow automation is a powerful way to systematize processes. You can use specially developed collaboration software to collect required data from known sources and provide access and notifications to team members so that they have a clear view of the work required. I recommend selecting platforms built with an open API that allows you to automate data flows between the best CRE software.

I also suggest that you start with clear goals of your desired outcome and how you will measure success criteria. Where possible, leverage familiarity with existing processes and naming conventions. Be sure to replace something rather than just add extra work. In general, you start with the basic requirements and build out as the team uses and takes advantage of the capabilities. Continue to analyze the actual results against the goals/assumptions you started with.

3. Look at technologically advanced collaboration tools.

To keep up with the current pace of business, you need to be in constant contact with critical issues, and team members across the business landscape as well as third parties need to be able to derive actionable insights from the large amounts of data being collected.

In the past, this was done manually through emails, phone calls, and shared spreadsheets that were difficult to decipher given the wealth of information required. To keep up with big companies, I encourage investors to use tech solutions that simplify collaboration and introduce new processes that make large amounts of data accessible to everyone simultaneously and in real time.

When it comes to these solutions, access rights are critical. Consider the need for internal and external collaboration and consider how detailed the access rights you need.

4. Balance scale and agility.

New proptech tools don’t just collect and parse data; these tools also enable companies to operate at scale. To ensure there are integrated workflows and collaboration to increase scale, configurability is key; to drive user adoption and real business outcomes, workflows must be shaped around an organization’s proven investment criteria and processes. In terms of strategies for dealing with scale, eliminating manual and administrative work that used to consume deal teams’ time and resources creates the opportunity for them to evaluate and close more deals.

Countless hours per week spent on repetitive administrative work, such as data entry, report formatting and information dissemination, can be saved with specially developed tools. Historically, analysts and collaborators had to go to different data sources to manually compile and format the information, which was time-consuming and prone to error. Make sure your setup allows more time for insights gathering rather than activities like debugging.

A new world of investment opportunities in 2023

Data is revolutionizing the way deals are closed, creating informational and operational benefits that businesses have never had before. It helps investors see the best deals for their strategy and understand how to execute them quickly and accurately. It’s not just the Blackstone portfolio companies of the world that are using these approaches to build value in 2023. This new real estate playbook is available to everyone.

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