Guest Post by Matt Giffune, a co-founder at Occupier

Commercial real estate technology is ancient. It’s not uncommon to see commercial brokers using fax machines to move contracts around, get signatures, and close deals as fast as possible. This is because the transmission of faxes is seen as more secure than email.

Because they handle sensitive financial information, CRE firms often rely on older technology. According to Deloitte, about 80% of CRE firms still use outdated core systems that can’t support emerging technologies.

Real estate is a relationship-based business involving archaic processes of handshake deals, wet ink signatures, and manual data research. It’s no surprise that the CRE sector is slow to adopt new technologies. However, advancements in property technology, or proptech, are disrupting the industry by optimizing the processes of leasing, buying, selling, and managing properties.

Digital transformation in commercial real estateis changing the way we do business, and CRE professionals that ignore proptech investment will be left behind. It’s time to ditch that old fax machine and embrace the technological revolution.

What Is Proptech?

An investment in proptech is an investment in the future of your business. CRE brokerage firms that proactively adopt technology are leading the pack. This includes a CRM for customer data, marketing automation, ERP systems and cloud SaaS tools, commercial lease management, lease accounting, and transaction management workflows.

When considering the right proptech to use, real estate firms need to understand how it fits into their current processes. Those that perform the digital transformation proactively and with intention are finding 50% higher returns on investment than firms simply adding technology in response to trends.

Tenant-rep brokers are the proptech advisors of the future, holding the intelligent keys to market analysis, competitive insights, and a wealth of CRE data points. Firms leveraging this information can optimize their processes and make the most efficient allocation of resources to help them stay ahead of the competition.

Digital Transformation in Commercial Real Estate

The word “disruption” tends to induce fear in many sectors, and as the leaders of human-focused, relationship-oriented companies, CRE proprietors are used to legacy processes. They like their spreadsheet inputs, basic data analysis, manual research, and handshake deals.

But the digital transformation of the CRE sector is upon us, and it’s firing on all cylinders. Technology increases transparency, which in turn powers smarter decision-making and better long-term real estate strategies. There’s a new business standard, and early adopters will dominate the art of the transaction with smarter lease management workflows, leaving the rest behind. The notoriously slow-moving government invested $100 million in IT and cyber-related investments last year, and 80% of this budget was allocated to system operation and maintenance of legacy systems.

Everyone else will be following its lead, and this digital transformation is occurring at every step of the supply chain, including the tenant-facing portals.

Tenants expect digitally enhanced technologies. They want modern, simplistic tech stacks that can power their day-to-day work. Most businesses also rely on tech stacks that save employees time, enable collaboration, and unlock siloed data. The top proptech companies know this and provide an improved customer experience using modern relational tools that are keeping tenants in leases longer.

There are three main benefits to upgrading commercial real estate technology, and those who are slow to adopt will be left behind in these key areas.

1. Automated Workflows

Manual processes can’t automate your workflows. There’s a good chance you have a contract sitting on your fax machine right now that needs attention.

Imagine a world in which you are automatically notified when your legal team has officially signed a new lease deal. That action then triggers your real estate team to upload the lease into a lease administration module. From there, every clause, critical date, expense, and data point is automatically organized and tracked. Finally, the finance team is pinged that they have a new lease for their balance sheet under ASC 842 guidelines. With modern proptech, managing and automating that workflow becomes easy and efficient.

2. Data Analysis

Clean, accessible, and predictive data is table stakes these days. Without it, you’re in the dark and making uninformed business decisions. Heads of real estate and finance need instant access to data to confidently assess areas of risk and opportunity within their portfolios. Ultimately, CRE data removes the guesswork from strategic decision-making.

You’ll make informed, high-level choices and better optimize your portfolio for profitability using the right information. Even better — both you and your tenants can have instant, real-time access to any necessary data in a collaborative environment.

3. Collaborative Platforms

Many teams — such as design, construction, facilities, HR, finance, and more from entry-level to C-suite — work together on various tasks within organizations. When each department or team uses different tools to communicate, internal collaboration is difficult to manage.

A single source of truth is necessary to keep everyone in alignment and sharing knowledge about project updates. Proptech now powers task management, automated email notifications, and team commenting so each business unit has visibility into the lease management process. From designing a space to critical date notices and expense due dates, every aspect of the process can become more collaborative to help people work together and move the project forward.

Still Working in the Dark Ages?

Have you ditched your fax machine and legacy software from the prior century yet?

Stale software only leaves you in the dark. Older technologies create manual processes that are inefficient and riddled with errors. Modern, intuitive, and automated software tools, on the other hand, can power your lease management process. Most businesses have upgraded, but the CRE sector can be stubborn in its traditional ways.

Firms that proactively and strategically upgrade their technology and implement automation throughout their workflows will see competitive advantages moving forward. These software tools provide a secure and efficient environment for the full team to collaborate and create. Whether it’s researching the market to find the next great deal or managing the existing properties in your portfolio, your need can be met with the right CRE-focused proptech solution.

Matt Giffune is a co-founder at Occupier, a lease management software platform.