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800.944.5173
Schedule a demo with a product specialist who can answer any questions and show you the platform.
800.944.5173
In the 2019 Deloitte Commercial Real Estate Outlook, the report had five key takeaways, one of which explored how the rapid evolution of technology and consumer preferences is redesigning commercial real estate (CRE) business models and bringing rapid change to the industry. Concurrently, the Altus CRE Innovation report of January 2019 collected similar findings.
As detailed on the Deloitte blog, there were five key takeaways:
Proptech
Proptechs are increasingly popular with investors and are expanding their coverage across the real estate value chain. The Deloitte report found there is merit in CRE companies becoming knowledgeable about proptechs, since these firms are using technology to nurture new, innovative ideas that enhance operational efficiency, tenant experience, and information flow.
While commercial real estate has a reputation for being slow to adapt to changing technology, 2019 is seeing strong gains in the adaptation of technologies to recover missed revenues, gain broad efficiencies, and create seamless integrations between properties and teams. However, while many CRE firms have now invested in integrated CRE software solutions, many are still using spreadsheets for critical CRE functions which is creating more data silos.
According to Forbes and Altus group data, total investment in real estate technology was roughly $33 million in 2010. A total of $9.6 billion was invested into real estate companies in 2018. The 2018 figure was slightly less than in 2017 ($12.6 billion), with a variety of factors cited for the decrease, including a more sophisticated investor community, and the focus of $2 billion alone on WeWork.
In its broadest sense, proptech in commercial real estate is used to reduce or eliminate many of the routine CRE tasks in transactions, valuation, property management and leasing. Investor confidence is bolstered when Commercial Real Estate Property Management firms invest in technologies due to the resulting efficiencies and overall transparency achieved.
Common types of proptech include:
Proptech Adoption
Adoption of proptech can be seen as challenging for some firms however: some organizations may have concerns that migration away from spreadsheets and legacy accounting programs will create disruptions in day-to-day operations.
This is a dangerously false position, and in reality, the opposite is true: inability to adopt new technologies will jeopardize the continuity of firms and companies that do not adapt. This is a business continuity matter. The key is in choosing the right platform: one that is not over-engineered and difficult to implement. We designed RAAMP specifically for these transitioning communities.
The Altus study further cites the distinct advantages operators can expect in both top-line and bottom-line gains by implementing proptech: the use of property technology removes existing information silos and takes the guesswork out of commercial real estate investing and property management.
The Time to Change is Now
A key finding of the Altus report indicated that a large majority of firms have already invested in integrated software solutions for critical CRE functions. However, 60% of executives said their firms are still utilizing spreadsheets as their primary tool for reporting, 51% for valuation and cash flow analysis and 45% for budgeting and forecasting, indicating that despite significant innovation, the industry continues to lag in certain areas.
By improving the experience of users of commercial space and accelerating the use of shared, innovative property technologies, commercial real estate firms and investors will become more profitable and provide a competitive edge against those that refuse to adapt to the changing marketplace.
Please contact us to learn more about how RAAMP’s proptech approach can seamlessly become a part of your firm’s accelerated growth.
As adoption of the RAAMP platform grows within the Commercial Real Estate market, we thought the timing was great for a short insight interview with Founder and Chief Architect of RAAMP, Landy Randolph
I: Why did you develop RAAMP? What were the main problems you were trying to solve for the CRE industry?
LR: I developed RAAMP to deliver more accurate rent rolls,
but more important, to ease the pain of abstracting a complex lease into common
language. Accounting teams and Property
Management teams must share data to ensure internal and external obligations
are met. It could be something as simple as who is responsible for the
maintenance of a parking lot, or if sales are being reported for percentage
rents — a type of rent based on the gross income of the tenant rather than a
fixed amount. If that revenue is not reported accurately or documented
appropriately, that communication gap can be responsible for millions of
dollars of lost revenue annually. Missed escalation dates and inaccurate excel
spreadsheet formulas can amount to significant financial losses.
I: How was RAAMP funded? ‘
LR: Originally, a private asset manager came to us and requested we create a more sophisticated pro forma. I wrote a plug-in to Excel, and that worked so well that we started to explore how we could take it to the next level. Ultimately, we created a cloud-based application to offer the service more broadly, bootstrapped by our original client. We built RAAMP recognizing that the industry lacked a user-friendly platform that had an integrated accounting solution, a CRM system, and document management. We’ve been fortunate to receive tremendous, positive feedback
I: Have you learned anything along the way from your customers that surprised you?
LR: We learn from our customers every day. Specifically, we
learned that RAAMP is an invaluable tool during the due diligence phase of an
acquisition. As an example, property valuation by banks and brokers considers
all current rents, regardless of when they expire. With RAAMP, the platform
allows the user to see the current net operating income (NOI), plus the
potential NOI related to vacancies, and at-risk NOI based upon lease
expirations.
I: What is your favorite feature of RAAMP?
LR: I’ll limit it to two. The file management system in
RAAMP is so integrated into the platform that you can easily find any file
within a few clicks. The way we allow for customization but still enforce best practices
and folder structure gives our customers confidence knowing they can easily get
to a file exactly when they need it. My other favorite is the variant rent
feature: many times, in leases, you don’t know what the rent will be for a
given escalation or option period. Sometimes, rent is simply based on the Fair
Market Value, but at other times, pricing indexes or variable rates like Prime
are applied. RAAMP computes the rent for you — taking into account the various
indexes — and even gives you an easy-to-read explanation for how the rent was
computed. This saves the time it takes to search out the indexes and compute
them, and the time to relay that information to the tenant. We do it all for
you.
I: What’s next for RAAMP?
LR: Our next integration will be a Property Management
maintenance module. Property Managers
and tenants will love this. For the Property Management professional, we
sincerely want to reduce the administrative effort required to do their jobs
while making best practices accessible.
Plus, we have worked exceptionally hard to make the platform easy to
use. We haven’t over-engineered which
can lead to a break from industry standards.
About RAAMP
Founded in 2015, RAAMP combines robust, industry-compliant Accounting tools, Lease Management, CRM and Document storage in a team-shared environment. Designed to replace disparate spreadsheets and cumbersome legacy accounting software, RAAMP was developed as an internal tool for private asset management. RAAMP replaces over-engineered, overly complex industry solutions with a simple, elegant platform.
RAAMP’s software solution increases productivity between management teams, reduces the risk of missed revenue, and eliminates the need for multiple software and file management systems within a company. RAAMP solutions currently support millions of square feet of managed space for the commercial property management industry. Contact us to Learn More
Founded in 2015, RAAMP combines robust, industry-compliant Accounting tools, Lease Management, CRM and Document storage in a team-shared environment. Designed to replace disparate spreadsheets and cumbersome legacy accounting software, RAAMP was developed as an internal tool for private asset management. RAAMP replaces overly complex industry solutions with a simple, elegant platform.
RAAMP’s software solution increases productivity between management teams, reduces the risk of missed revenue, and eliminates the need for multiple software and file management systems within a company. RAAMP solutions currently support millions of square feet of managed space for the commercial property management industry.
Schedule a demo call with a product specialist who can answer any
questions and show you the platform.
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