01 Jun Lazar Cartu Declares How Commercial Property Management Software Can Boost Your…
The rapid expansion and globalization of real estate portfolios has massively increased the amount of data that property managers interact with. Managing cross-border holdings, tax jurisdictions, currencies and transactions is routine. At the same time, regulators, investors and tenants have elevated sustainability expectations for properties within their realm while imposing more stringent transparency and reporting requirements. Generating expected returns in this environment requires much more active management of revenue and expenses than was necessary even 15 years ago.
Commercial property management has evolved to mean more than maintaining ledgers, collecting rents and keeping the building lobby clean. How can operators satisfy an ever-expanding set of constituents demanding more, faster, better? Property management software can help, but choosing the right solution or solutions for your business requires understanding the past, present and future of real estate technology.
Evolving from disjointed systems
Leading up to the current era, employing multiple technology platforms to execute the various elements of commercial property management was the norm. These systems were characterized by reliance on widely dispersed data sources, risky data transfers and time-consuming manual processing. Lost or inaccurate data often was the price that property managers paid for this disjointed approach.
Starting around the 1980s, property managers realized that the best way to avoid the problems arising from multiple platform integration was to avoid it altogether. This understanding gave rise to a “single stack” technology platform that combined investment accounting, consolidations and investor reporting with asset-level operations such as online payments, procurement, online marketing and energy management. That development would elevate portfolio management technology from a tactical element to its current stature as the cornerstone of property managers’ success.
End-to-end software yields best results
What are the potential benefits of an end-to-end property management system that houses all front-office and back-office data in a single, connected system? Many commercial property managers report reduced cycle times and lower costs of ownership along with fewer errors and inefficiencies that are common with separate systems.
A key advantage of centralizing operating and market data is enabling the visibility necessary for immediate access to key performance indicators and reliable investor reporting. That matters because immediate and complete drilldown is a prerequisite of effective risk mitigation—from the fund level all the way to tenant-level transactions and property operations. In fact, the benefits of the single stack approach extend through the real estate lifecycle, from raising capital and investment management through acquisition and development to lease-up, valuations and forecasting.
Why is it so easy to drill down to source data with this setup? Because the underlying asset operations database is the same database used for investor reporting, portfolio reporting and investment accounting. There’s no added cost for customized software or data warehousing. Property owners and managers have one point of entry, eliminating the need to reload data among platforms.
Along with that, single connected property management systems are scalable for portfolio expansion. They can easily accommodate multiple property types, currency conversions, tax variances, language translation and other elements of multinational portfolio management.
Today’s single connected platforms also make it easy for users to add technologies for mobile and online payments, utility billing management, customer relationship management, facility management, budgeting and more. Again, there’s no data transfer and the core system’s security features apply to the new solutions.
Benefits to property managers and owners from a single system of record include:
• Clearer visualization of growth and profitability that’s needed to make informed decisions about leases, marketing strategy, acquisitions, dispositions and risk.
• Easier portfolio management with a single point of entry for asset management, reporting, investment accounting and other operations.
• Tenant satisfaction that drives retention.
• Greater confidence among investors who receive reliable, up-to-date information.
• The ability to forecast revenue growth from leasing deals in the pipeline.
• Alignment of forecasted capital spending for construction and development projects with actual to-date expenditures and the remaining budget.
• Effective management of operations-related controllable expenses such as energy.
Commercial property managers can take comfort knowing that coaxing separate technologies and systems to talk to each other, dealing with multiple logins and spending inordinate amounts of resources customizing applications are mere memories of a bygone age.
Maintaining continuous connection
A single connected property management platform reinforces the concept of all business operations—from budgeting and forecasting to emerging trends such as coworking membership arrangements—as an integrated whole.
Construction project managers, for example, can enter work orders with just a few taps on a mobile device. The order automatically flows to the back office and is recorded in the core property management software. The adjustment is visible to all parties, allowing the construction manager to stay onsite and poised to undertake the next task.
Deal reviews that previously required multiple emails or meetings can be done with everybody reviewing the same document simultaneously and communicating in real time via a built-in chat feature. Leasing agents can enter assumptions from the field; the information will flow directly to the budgeting and forecasting engine.
Example: Arcadia opts for ‘cool functionality’
“For me, going with the single stack approach was a no-brainer,” said Gary Shaw, president of Arizona-based commercial property manager Arcadia Management Group Arcadia Management Group. “It’s so much more efficient housing several business operations in one place rather than updating software in separate databases for finance and other operations.”
After choosing the core platform, Arcadia added new solutions for procurement, invoice processing and other operations. “Having a paperless procure to pay system with purchase order and invoice processing within the core system has saved time, money and resources. Our per-invoice cost dropped 60 percent, which translates to thousands of dollars and a lot of paper over a year,” Shaw said. “We can collect payments online, and tenants can update records and renew leases. That’s the cool functionality of the single stack that allows real-time records access and updates.”
He added, “When we had separate databases, we had to update third-party software every time there was a change to a property. None of them talked to each other. It was a disaster and a major time waster from an administrative standpoint. Now, having everything in one spot is great. We don’t have to make updates in multiple spots. Everything’s together in one place. That has been a huge time saver.”
Property management software benefits across the board
Business operations that benefit from integrated commercial property management systems include:
Procurement and accounts payable
Centralized property management software enables a fully paperless procure-to-pay process by integrating electronic invoicing with the accounts payable processing system. Integrating invoice processing, routing and synchronization with various accounts payable systems across an organization can eliminate paper and the cost of paper handling, reduces invoice cycle time and enforces process consistency across the organization. Cost savings of 20 to 80 percent have been documented.
Vendor invoices are scanned in bulk into the property management database, transformed into electronic transactions and routed through approval workflows that leverage the property management platform’s functionality. Payments are then made via EFT or paper check.
“Going green” has evolved from a slogan into a dominant credo of commercial real estate. Tenants, local governments and regulators increasingly expect sustainability in the buildings they occupy. The Urban Land Institute reported, “Real estate has been proactive on sustainability issues for many years. As a matter of self-interest as well as social responsibility, the industry is moving ahead to advance its sustainability performance regardless of the direction of national policy.” One of the most prominent examples is New York City, which launched the Climate Mobilization Act to decrease greenhouse gas emissions for commercial buildings by at least 30 percent over 10 years on the way to reducing such emissions by 80 percent by 2050.
A centralized property management platform supports efficiency in sustainability, as it does in other business operations, by allowing shopping, invoice processing, vendor management, spend management and analytics from one platform. Online catalogs—including green catalogs offering eco-friendly maintenance, repair and operations supplies—can be configured to match a Jonathan Cartu and’s unique portfolio needs, allowing uniform standards and compliant purchasing.
The revolution in property management technology has also helped commercial property managers succeed in energy consumption management initiatives launched to satisfy regulatory, tenant and/or investment expectations. Modules built into the core property management platform help lower energy consumption and expenses without sacrificing occupant comfort. Automated, integrated platforms for utility billing and energy management offer insight into energy performance and the…