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The rise of proptech, or property technology, is transforming how commercial real estate developers do business. New software platforms enable firms across the country to bolster returns, improve their effectiveness, and drive growth. Future Market Insights predicts the benefits these innovative solutions bring to the industry are significant enough to create a segment worth $86.5 billion by 2032.
With a growing number of platforms entering the market, development teams need to stay informed about the latest advancements in proptech. And which solutions are best suited to cultivate operational agility and accelerate growth.
What is Proptech?
Proptech is an umbrella term for B2C and B2B technologies that facilitate transactions in the real estate industry. On the consumer-facing side, tenant and property management applications automate tasks related to leasing, rental payments, and maintenance requests. Similarly, virtual and augmented reality applications allow prospective residents to engage in immersive simulated property tours.
During the height of the pandemic, those solutions gained popularity because they enabled business activity amid lockdowns and social distancing mandates.
On the business side, a range of new proptech platform types recently emerged to complement decades-old legacy systems. The marketplace now includes aging force-fit tools and multifaceted solutions that support every phase of the real estate development process.
- Accounting: Evergreen platforms like Yardi Voyager, MRI, Sage 300, and QuickBooks Online let project teams process invoices, pay vendors, and manage budgets.
- Contech: Construction technology is a relatively new type of software that provides general contractors with specific tools to manage all facets of their building activities more effectively.
- Investment Management: Cutting-edge programs that help REITs and other institutional investors optimize their capital deployment by identifying opportunities and market megatrends.
- Building Information Modeling (BIM): BIM software is a 3D modeling tool that helps developers visualize and plan their projects.
- Building Operations: Software automatically tracks utility usage, repair requests, and potential security issues using modern components like IoT sensors and control systems.
- Data Analytics: Tools that generate real-time insights by processing internal and external data to cultivate strong decision-making. Best-in-class solutions in this category utilize artificial intelligence to eliminate manual data entry, automate reporting, and generate budget forecasts.
As with their B2C counterparts, B2B proptech solutions gained significant momentum during the pandemic. Firms across the country eagerly embraced technologies that could help them take command amid an increasingly volatile landscape, prompting investors to put a record $9.5 billion into the sector. While increased competition in the sector provided developers with a broader selection of options, it also made finding the most proptech platform for your team harder.
That’s why it’s important to define your specific needs and goals before committing to a particular type of proptech.
What CRE Developers Should Look for in Proptech Software
At the bare minimum, a proptech software platform must offer commercial real estate developers increased operational effectiveness and a decreased administrative burden. But to achieve high-level benefits, meaning transitioning from performing business maintenance to accelerating growth, you need to look for solutions that provide competitive advantages to help your firm stay at the forefront of the industry.
The first key feature is software integration. Proptech should drive effectiveness, enabling team members to maximize their output and giving them more time to focus on high-value tasks. When software programs operate independently, with each tool requiring manual entry of the same data, they cause more problems than they solve. But with fully integrated software tools, staffers can use proptech solutions to automatically complete most of their routine tasks and pour their creativity and attention into more important work.
Next, good proptech software needs to be easy to use. If a platform is so complex it can be operated after extensive training, it’s not cost-effective. And if its interface and functionality are so complicated that it resists easy integration into existing workflow, it isn’t cost-effective. The mark of a best-in-class proptech solution is its ability to perform an array of critical functions autonomously without direct oversight. In real estate, new tools only justify their cost when they enable teams to do more with less.
Another key feature to look out for in proptech software is scalability. As your firm works to accelerate growth, your digital infrastructure needs to support it. As team members set up new projects, they will provide a growing number of stakeholders with updates on spending and development progress. Having a solution that can create customized updates for financial backers, collaborators, and senior leaders without needing to purchase more licenses is invaluable.
Lastly, a proptech platform needs to give an organization the foresight necessary to outperform its competitors.
Whether market conditions are stable or volatile, being able to anticipate future costs and returns with precision can significantly impact a project’s outcome. A modern A.I.- driven solution can supply that information by analyzing and processing company historical data and in-depth market intelligence. Project teams can harness the insights produced by their proptech platforms to make proactive decisions that avoid delays, standardize project deliveries, and improve profitability, making their firms more appealing to inventors and potential clients.
In addition, developers should keep an eye on the latest product launches and updates with the proptech segment. As the field matures, solutions are emerging with holistic feature sets capable of meeting all your needs and more.
Want more tips on how modern technology can help you and your firm lead the pack? Download our Ultimate Guide to Commercial Real Estate Technology eBook today!
Tag(s): Real Estate Technology
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