“A Recession Is Averted.” “The United States Will Plunge Into A Recession.” “GDP Dips Amid Recession Fears.” Since early this year, we’ve seen economic headlines change drastically on a day-to-day basis, and the impact it may or may not have on commercial real estate continues to loom. This all begs the question: What should landlords do to prepare? Harnessing real-time data should be at the top of your list when it comes to your asset and investment strategy. Now is the time for real estate owners and operators to take strategic measures to not only survive but also thrive amid rapidly changing market dynamics.
Over the past few years, there’s been a shift within the industry, and commercial real estate has largely begun to embrace the technology and data that have become available. This is further illustrated in a recent report by Future Market Insights, which predicts the proptech market will grow to $86.5 billion in 2032 from $18.2 billion in 2022 due to the continued adoption of technology solutions and services in real estate.
The last few years have shown how unpredictable the market can truly be in reaction to current macroeconomic and social events, but having the data to understand what your tenants’ current needs are, what they’re looking for and what’s needed to retain them is essential in future-proofing your business, and in a soft market, there’s no better time than now to double down on the insights that you’ll need to make better-informed decisions.
When it comes to marketing your portfolio, the real estate industry was reliant on old-school mailers and word-of-mouth referrals, but only leveraging these methods leaves you missing out on large segments of the market who are now more online than ever. Digital markets like Zillow and StreetEasy have become second nature within the home and apartment search process, but when it comes to commercial leasing and buying, the industry overall has been reluctant to embrace online platforms for marketing and engaging with prospective tenants via digital content.
According to a VTS-commissioned survey of more than 154 top industry leaders from an independent market research firm, 60% state that today’s tenants expect a virtual space tour before committing to an in-person tour—and 73% agree that implementing a digital marketing strategy has become necessary since the onset of the pandemic. It’s safe to say that the adjustments made to accommodate leasing coordination during the pandemic that has made our lives easier, like virtual tours, are here to stay.
Protecting your portfolio also involves proactively improving your internal processes as well. Leveraging technology to manage the entire leasing process online—from start to finish—is just one way to stay ahead of the competition and ensure your team performs more productively and with real-time accurate insights into your operations. Centralizing leasing insights digitally allows you to receive alerts on potential risks within your portfolio and also identifies opportunities. And when you’re working with several different stakeholders, potentially in remote offices who might be in different time zones, the competitive advantages of having all documents in one place eliminates further back-and-forth that might disrupt the process and creates a more frictionless experience.
In insulating their businesses, landlords and property managers must approach tenant management through a much more experiential lens, as today’s increasingly prevalent hybrid work model means the office is more of a destination than it was pre-pandemic. As tenants are returning to the office in a hybrid work environment, it’s not only expected that your buildings have access to strong connectivity and Wi-Fi, but also a digital platform that can manage their day-to-day experience and needs. Having the advantage of an app that can digitally advance maintenance requests, visitor registration, conference room bookings, on-demand services and mobile communication gives your buildings a competitive edge by providing your occupants with a seamless on-site experience.
Tenant experience technology solves all of this and brings the relationship between tenants, property managers and landlords closer through increased connectivity, insights and communication. This technology not only provides a positive experience for occupants and visitors, but it also gives landlords and property managers a strategic edge in managing their portfolios—with the ability to better understand the needs of tenants and also better manage the relationship, ensuring tenants are happier and their needs are met and making them more likely to renew their leases.
According to a report from the Standish Group, 66% of technology projects end in failure, so it’s imperative to have an implementation strategy to ensure a seamless transition. When considering new technology platforms for your business strategy, first ask yourself the following questions:
1. What current inefficiencies in your business are you looking to solve?
2. What are your goals with the technology?
3. How will it impact your clients and employees?
4. Can someone on your team oversee and lead the implementation process with the vendor?
Though it can be impossible to predict what’s ahead in the coming months and years, one thing that is certain is that technology will be critical in best managing your operations and formulating the best strategy for your business. Amid market uncertainty, leveraging every tool possible will be key in staying ahead of the curve, mitigating risk and navigating whatever the economy may bring.
source: forbes