The Institutional Real Estate Inc Sponsorship brochure, Connected-Investor Focused, We connect people, data and insights, sponsorship, events, IREI Products
Issue link: http://read.uberflip.com/i/814389
NAREIM DIALOGUES SPRING 2017 21 ARENCY Fortunately, recent advancements in real estate tech enable the housing of financial performance information in a single, accessible, company-wide system of record. This significant improvement to operational efficiency grants any user the power of instantaneous portfolio analysis, and removes the execution barrier for normative comparison. As Cialdini, Kallgren, and Reno wrote in A Focus Theory of Normative Conduct: A Theoretical Refinement and Reevaluation of the Role of Norms in Human Behavior: Competitive organizations foster competition through their managers. Competitive managers are now using new, easily accessible systems of record to assess, benchmark, and improve their relative performance against peers. Waypoint regularly works with investors to make portfolio performance data and analytics easily accessible, a powerful tool that motivates employees to improve operating expense performance. In one example, an asset manager single-handedly identified a $200,000 annuity savings that increased property value by more than $3 million. He unlocked this value by uncovering meaningful differences in cleaning expenses managed by the same vendor across similar markets. Opportunistic acquisition teams have used Waypoint's platform to more accurately underwrite operating expenses by comparing their pro-formas to properties held in the core funds. And we have seen operations teams initiate annual operating expense benchmarking efforts that resulted in significant expense reductions portfolio- wide, without a specific mandate to improve property performance. In each case, a single system of record that easily enabled information transparency and normative comparison facilitated the achievement. The benefits of tech-enabled information transparency are not limited to financial performance; commercial real estate owners can also enjoy better planning, greater collaboration, improved communication, and proactive problem solving. From a budgeting standpoint, an asset manager is more likely to develop detailed budgets on time if he knows his colleagues can review those budgets online once complete. Collaboration across any company arises out of a business need. If asset managers working in different offices and funds can easily see the overlap of their portfolios across markets, they are more likely to collaborate and develop strong working relationships – a substantial win for any company. Similarly, we have encountered clients who, after realizing the benefits of information transparency in their own companies, have decided to provide the same visibility to property managers and operating partners outside of their organizations. By providing these tools downstream to the day-to-day property managers, institutional investors have seen a shift from reactive to proactive property management. Obviously, there is always resistance to the adoption of new technology, no matter the benefits. First off, managers often believe technology replaces people. But commercial real estate technology is enabling, not disrupting. Disruptive technologies, like UBER and Netflix, replaced entire companies, but nothing will ever replace the business acumen, industry knowledge, and personal networks needed to succeed in real estate. The problem in commercial real estate is that individuals are currently the custodians of information. How much time does your team spend tracking down emails, searching for old investment committee memos, and wrangling property managers for single data points? These smart, hard-working individuals were hired to make strong business decisions, not corral information. The more data readily available at their fingertips, the better decisions they will make. There are tools now that enable your teams to focus strictly on what matters – managing assets and improving property performance. The key is finding a well- designed solution that easily integrates with your current tech and requires minimal effort and training to implement. So why not start sooner rather than later? " There is substantial evidence that shifting an individual's attention to a specific source of information or motivation will change the individual's responses in ways that are congruent with the features of the now more prominent source" ©iStock.com/Rawpixel