Over the last few years, the COVID-19 pandemic, macroeconomic conditions, and changing expectations around work and lifestyle have increased the need for technology across industries. In a McKinsey survey of 800 executives, 85% of respondents said their businesses had accelerated digitization. Though the real estate industry has been slower to adopt new technology in comparison to others, a survey conducted by EY found that attitudes have shifted, with more companies seeking solutions to increase efficiencies and reduce costs. In the survey, 69% of real estate owners identified technology adoption as a high strategic priority, and 87% of respondents wanted to make the capture and use of data a priority. 

Real estate developers looking to build more effective and resilient businesses will find a variety of software solutions on the market, each with unique features that serve different industry roles or phases of a property’s lifecycle. From investor relations to project management to construction management to accounting, it can be difficult to determine which tools are the right fit for your team’s needs.  

How can you cut through the noise and select the best tools for your real estate development business? 

Here’s a guide to the most frequently considered software solutions by real estate developers including their use cases, functionality, and pros and cons.

Investor Relations 

Best For:  Real estate private equity funds and developers with complex investor relations and reporting requirements

Use Case/Functionality: Investment management platforms help real estate firms manage their investor reporting, fund accounting, and distributions. Real estate investment also usually involves complex tax considerations, and this software can help investors keep track of profit and loss statements, cash flow statements, or other important financial documentation for tax purposes.  

Common Platforms:  RealPage IMS, AppFolio, JuniperSquare

Pros: 

• Built specifically for managing real estate investor relationships
• Standardizing financial reporting to assist with complex tax or regulatory document management 

Cons: 

• Only assists with one function of real estate development, investor relations. Not suited for the everyday project management-related activities associated with development, asset, and capital projects  

Outside of investor management, real estate teams have a broad array of responsibilities relative to the actual planning, management, and execution of the development, re-development, and capital projects across their portfolio. 

These workstreams commonly include budget planning, cost forecasting, invoice and contract management, schedule management, document management, and more.

While many real estate developers still find themselves stuck in error-prone and labor-intensive spreadsheets to manage, report, and forecast on the projects across their pipeline – a new category of real estate software specifically designed for development and project management has emerged. 

Development and Project Management 

Best For: Real Estate Developers, Owners, and 3rd Party Project Management firms managing development, major renovation, or asset management projects across their portfolio

Use Case/Functionality: Real estate development software empowers real estate owners and project management firms to deliver their development and capital projects on schedule and on budget.

Think of real estate development management software as a command center for the everyday tasks associated with planning, managing, and reporting on development and capital projects from pursuit to stabilization.

An effective real estate development software empowers project teams to work faster and smarter while providing senior leadership with better visibility into project statuses and risks.

The most powerful tools leverage automation and data to transform clunky, error-prone processes associated with:

• Budget planning
• Bid management
• Invoice and contract management
• Forecasting
• Schedule management
• Document management
• Draw requests and project-based reporting for investors

Real estate development software commonly integrates with accounting software to drive better alignment between project and accounting teams while ensuring project expenses are automatically reconciled with the general ledger. 

Common Platforms: Northspyre

Pros: 

• Eliminates low-value tasks through automation, allowing you to transcend menial tasks and be more strategic throughout the project lifecycle 

• Centralizes reports and data for faster decision-making and increases visibility on key project metrics by breaking down silos across teams
• Aggregates analyzes, and benchmarks cost and vendor data across projects to drive more informed budget and procurement decisions
• Built specifically for real estate owners and project teams, not general contractors

Cons: 

• Real estate developers who act as their own general contractor might also consider a construction management solution to support their more construction management-based workflows including submittal, RFI, and blueprint management 

Northspyre is the only all-encompassing real estate development platform on the market, using automation and data analytics to minimize wasted time and maximize proactive decision-making at every stage of a real estate project. The platform is tailored to the specific needs of owners, developers, project managers, and internal corporate or institutional real estate firms. 

You can use the platform to unlock efficiency for your teams through automated data entry and reporting, access to historical project performance data organized into easy-to-digest dashboards, and proactive intelligence that flags budget lines trending high, all to help you and your team make the decisions that lead to project budgets and timelines being met. 

General contractors and construction management teams directly responsible for the coordination of trades and on-site construction activities require different tools tailored to their specific needs.

Construction Management 

Best For: General Contractors/Construction Project Managers

Common Platforms: Procore, PlanGrid, Autodesk360 

Use Case/Functionality: These tools are widely leveraged by general contractors to manage activities and correspondence related specifically to the construction phase of the project including Submittal Management, RFI Management, Punch List Management, and Blueprint Management. 

While real estate owners should expect their 3rd party or internal general contractors to leverage construction management software, these tools, in and of themselves, are not designed or sufficient to manage the entire development process and the everyday workflows of real estate owners and development teams. 

Pros: 

• Powerful organization tools for project managers, project engineers, superintendents, and field engineers to manage construction activities, documentation, and workflow
• Built for field offices and on-site teams
• Increase visibility and accountability for trade partners and subcontractors
• Provide dashboard project views for owners seeking to track and monitor the status of their projects under construction

Cons: 

• Tools like Procore require significant data entry and adoption by subcontractors often making them difficult to implement
• Not built for development project teams and have limited capabilities for pipeline management, task management, lender and investor reporting, soft cost management, and budget planning.

While Investor Management, Development Management, and Construction Management tools are invaluable solutions tailored to real-world challenges, almost every real estate owner will require an Accounting Software to organize bookkeeping and key financial reports.

Accounting

Best For: Any Real Estate Team Responsible for Bookkeeping and Financial Reporting across their corporate and property-based entities  

Use Case/Functionality: Accounting software plays a key role in any real estate company, ensuring accurate bookkeeping and financial reporting for various LLCs and properties associated with a real estate developer’s portfolio.

Most real estate developers leverage accounting software to organize their general ledger and ensure compliance and accuracy in the face of financial reporting and auditing.

What accounting software developers use is typically governed by the size of their property and asset management footprint and to what degree they outsource property management.

Merchant developers who disposition properties shortly after stabilization or largely rely on third-party property management firms typically require far less robust accounting software than firms who hold and property manage their stabilized assets in-house.

Common Platforms: Yardi, MRI, QuickBooks, Sage Intacct, RealPage

Pros: 

• Ensures books are organized for financial reporting at both the corporate and property level 
• Facilitates accounts payable and accounts receivable processes
• More robust solutions like Yardi, MRI, and RealPage offer a suite of add-on capabilities for stabilized properties including Investor Management, Property Management, and Asset Management 

Cons: 

• Lack of comprehensive and intuitive solutions for planning, managing, forecasting, and reporting on development and asset management projects
• Limited automation and heavy dependence on manual data entry to maintain
• Complex implementations
• Mainly used by well-trained accountants and rarely accessed by other common stakeholders such as acquisitions, development, construction, or senior leadership

Technology will continue to play a role in the real estate industry, and as new innovations emerge, it’s important to understand what software is on the market and which tools will work best for your team. Depending on the use case and needs of your business, different platforms will be appropriate at each stage of a project’s life cycle or provide more use to one person’s role. 

Northspyre was built to transform developer, owner, and project manager workflows, driving down costs and achieving higher returns on complex projects. The platform can be used for the management of all projects in your portfolio, allowing you to seamlessly manage multiple projects simultaneously and keep them all on budget and on track. Northspyre drives projects forward at all stages of the development process, from pre-development to occupancy. 

Book a Northspyre demo today and learn how the platform can act as your real estate development command center on your next project.