The Institutional Real Estate Inc Sponsorship brochure, Connected-Investor Focused, We connect people, data and insights, sponsorship, events, IREI Products
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NAREIM DIALOGUES SPRING 2018 19 CREATING OPPORTUNITIES IN A COMPETITIVE MARKET The most lucrative opportunities in today's late-cycle market are complicated and time-consuming. Winning and successfully executing these deals requires an infrastructure that manages most of the process, so investment professionals can address the more complex issues that require a higher level of expertise. A robust infrastructure can also build revenue and profit by helping a company expand into new markets. In rental housing, for example, several resources offer detailed information about occupancy, demographics, and supply and demand in every market, sub-market and micro-market. With this information in hand, a company can identify new markets that are a solid fit and test the waters before opening an office and putting boots on the ground. Investing in access to detailed data and internal systems offers another invaluable benefit. It allows a company to proactively seek deals that fit its criteria, rather than simply reacting to opportunities that the market presents. This is a potential game-changer for every commercial real estate firm. THE BEST AND THE BRIGHTEST Competing for top talent? The role a company's infrastructure plays in attracting and retaining the most qualified talent cannot be underestimated or overlooked. Today's up and coming commercial real estate professionals grew up with high-tech innovation. These technology natives will be drawn to companies whose systems and processes facilitate connectivity, efficiency and progress. Companies that operate manually to create and deliver client account statements, reports, and other investment related communications and that track portfolios on spreadsheets are unlikely to attract and retain top talent. A robust company infrastructure can also help companies hire more strategically. With systems in place to collect, analyze and report data, recruiting can focus on professionals whose highly specialized skills can contribute to the bottom line. REALITY CHECK The operational and strategic benefits of creating a strong company infrastructure cannot be overstated, especially for the vast number of commercial real estate companies that have given the topic little attention. Yet it is important to be realistic about what is involved. Creating a robust infrastructure is not easy, inexpensive or a one-time project. Buying technology solutions may look like a shortcut, but there is not a benefit in automating inefficient processes. The first step must be to clearly identify and document how a company operates at every level. It is critical to understand what is being accomplished by the systems currently in place, the steps each person takes to complete their job, and what works well along with what does not. Only then will it make sense to evaluate technology solutions that can manage data and reporting, streamline operations and increase efficiency. Choosing solutions is an early step in a much broader initiative. As a rule of thumb, the greater a system's potential to drive a company's success, the longer and more complicated its implementation. Further, managing a company's transition to an efficient, technology-enabled infrastructure is not a part-time job. It requires an experienced, forward-thinking real estate IT professional who can identify and tailor solutions to meet the company's needs and build a best-in- class team to transform the platform. Finally, building an infrastructure that truly supports a company's growth is not a "one-and-done" exercise. Like perpetually sourcing new deals and capital, real estate firms need to continuously manage and evaluate their infrastructure for the greatest impact and opportunities. "INVEST NOW OR BECOME EXTINCT!" "Invest in infrastructure or become extinct" may sound inconceivable in a thriving commercial real estate market. However, some real estate companies with a vision for the future are already investing in their internal operations, processes and systems. Other firms will follow. Over time the companies with robust infrastructures will obtain the majority of institutional and other capital, execute a majority of the lucrative deals and win the war for talent. When the cycle changes, these companies will likely be among the most resilient. For those firms who choose to stay the course and avoid developing an effective infrastructure, the Kodak story should serve as a cautionary tale. Few may recall that Kodak invented digital photography. However, film was the company's top producing product at the time, and the company saw no reason to change its business model. Instead, it continued to stay firmly focused on its traditional business, despite rapidly declining demand. Today, Kodak is mostly irrelevant within the photography industry. The choice is critical. Evolve by investing in infrastructure or die on the vine. NAREIM DIALOGUES SPRING 2018 19