How to Grow a Commercial Real Estate Company

CRE is Ripe for Disruption

Technology is an incredible resource for growing your CRE business. It can’t replace everything, nor can it be used in every role, but there are many ways to harness different technologies to automate or streamline processes in CRE investment.

People and companies have already started to adopt more technology into their process, but it’s not the norm yet. Tech adoption is still in its infancy. Penn Capital is at the forefront so much so that we are asked by leading vendors to improve products and give feedback to improve their CRE tech, and we’re also implementing tech to enhance our own operations.

Tech has the potential to fill many gaps in the CRE industry and, for example, we use it here at Penn in the following ways:
 

• Identify Markets

  Market research that’s assisted by data analysis platforms and deep databases speeds along the process of finding suitable markets for investments.

• Screening Deals

  Due diligence is easier when you have platforms and software at your disposal that helps you evaluate details efficiently, analyze the numbers in a deal, and accelerate the research process. We find this help as much with identifying deals that make sense as it does in quickly eliminating those that do not so that we do not spend resources of time and money on deals we should be passing on.

• Enhance Investor Relations

  Investor relations are easier for everyone when the process can be automated. For example, we use a proprietary investor relationship portal that allows every investor to log in and get real time updates about their investments, including pictures of the asset during construction, access to updated analytics and important documents.

• Property Management

  In property management, tech applications can range from expense tracker platforms to physical smart devices installed within the asset. Smart devices, such as video doorbells or smart locks, are a differentiating factor that can make your building safer and more attractive in certain markets.

• Data Management

  Every decision you make in CRE is guided by mounds of data. Using the right tech, you can make it easier to access that data, sort through it, find connections, and look for patterns that help with decision making.

By leveraging technology correctly, you can gain an advantage. Tech can be applied almost anywhere in CRE, but it must be providing real value. Don’t use tech just for the sake of using it. Anywhere that it can replace a lot of manual steps or streamline systems, it’s valuable. Otherwise, it’s just another budget waster.

Our mantra is that we are a technology enabled real estate company. We aren’t a tech company, but we do leverage technology to get better results for our investors.

Leveraging Technology to Grow Your CRE Company

If you’re talking about growth through tech, there’s one key thing you need to understand. Using tech doesn’t mean working less. You will still have long hours if you truly want to get results. What it means is improving the quality of the output and reducing the time spent to create that output – in our case, making us more efficient overall.

Tech helps streamline processes that take a lot of human resources which can be reduced or eliminated completely. You will be freeing up your time to do more important tasks, rather than simple tasks which can be automated.

Many processes in CRE can be automated or streamlined through the use of strategic tech resources. For example, in addition to the investor relations portal we’ve implemented, we also harnessed software that makes our accounting and distributions easier. All our K-1s are distributed electronically through the portal for tax season. Another part of distribution automation is electronic payments. Whereas we used to have to send checks and follow up on them constantly, we can now make direct ACH transfers, including automating the process for regular payouts to investors.

The program also helps us calculate waterfall payments and other related data. Everything done on our accounting program is cloud-based, so every relevant party can access the data and make necessary adjustments. If we need to hand it over for an audit or any type of review, we can instantly generate a report and export it them directly. This is a huge step up from an Excel spreadsheet and paper accounting – practices still commonplace at many real estate companies.
 

***

Tech isn’t the answer to every problem in CRE. It’s not the silver bullet that’s going to make you successful. However, if you leverage the right kinds of technology to aid your growth, you can gain a competitive advantage and differentiate yourself in a market that is otherwise behind the times.