This article was co-written by Brian Zrimsek, Industry Principal, and Arik Kogan, Vice President of Financial and Investment Solutions at MRI Software.

The COVID-19 pandemic has created the most challenging planning and forecasting moment for real estate investors since the Great Recession from over a decade ago. In comparison, the current period is both broader and deeper in its impact on real estate, creating substantial needs for technology to help (re)forecast 2021 and the next few years, in spite of all of the unknowns.

What makes this challenge more complicated for the real estate industry?

Unlike other market downturns in recent memory, there is a uniquely human element to the one that has acutely impacted the real estate investment landscape since March 2020. With the turbulence of the last year behind us, Green Street is already noting a valuation recovery and pointing to a continued positive trend.

Global transaction volume hit record lows through 2020 (anywhere from 13% to 61% across various regions, according to JLL), but these numbers were brought down primarily by asset classes that investors do not believe will bounce back hard and fast in the post-COVID global economy. There is plenty of capital available to be deployed, and while office and retail transactions have been limited, other asset classes, like apartments, student housing, and hotels, are being sourced and acquired eagerly by private equity investors.

How to create opportunity out of the challenge

These phenomena affecting the market, and core assets in particular, create an unprecedented challenge for investors, but also an incredible opportunity for those equipped to navigate it effectively. Strategic planning through this pandemic is not just an exercise in economics and math, but an intricate web created by the intersection of the market with human beings. We will be working from home. We will be shopping online. And when we don’t, we want health, safety, sustainability and an experience worthy of the effort.

As more factors, data points, and potential scenarios come into play for real estate investors looking to make quick and confident decisions, modern technology has become table stakes. For short-term planning and forecasting, integrated planning and budgeting tools make quick work of using past periods to drive future period forecasts, while providing for both general and specific assumptions to be put into specific planning scenarios and then rolled forward from one period to the next.

Driving multiple scenarios is important given the lingering uncertainty, allowing leaders to understand the likely bounds of the playing field in front of them.

Short-term, operational plans should then be used as inputs to longer-term planning processes. With a strong basis in operational realities, longer-term plans can be more reliable for further scenarios and strategic planning, including:

• Planning cash flow in support of expense or capital activities
• Identifying debt covenant opportunities or issues
• Projecting valuations as part of acquisition and disposition scenarios

Using data to model scenarios and gain consensus on plans is truly important given the uncertainty of the current time. In addition to gaining consensus over future plans, you must also ensure that you are leveraging data to both manage risks and ensure compliance.

Learn more about how you can plan to win with financial planning and analysis technology.

What if your real estate business could leverage technology powered by artificial intelligence without requiring coding skills on the part of the user? This is the potential that “no-code AI” offers – the ability to let non-technical experts utilize applications that can expedite data extraction and entry processes.

With the digital transformation taking place across the real estate industry, businesses are turning to technology to bring their operations into the modern era. Given its application to lease abstraction and lease management, artificial intelligence offers immediate value for real estate businesses and property management firms. With no-code AI for real estate, these organizations can quickly save time and money.

No-code AI could be a mainstay in the future of the real estate industry for businesses that want to harness the power of AI without the need for deep technical skills. Here are four benefits of no-code AI that can transform the real estate industry:

1. Scales with your business

No-code AI’s biggest advantage is that it can adapt to your business needs as they grow and change. End users don’t have to have a deep technical background to tailor the system or make adjustments. As your business expands, the solution can learn your new requirements over time and easily scale to meet your needs.

2. Allows automation of specific tasks

Most firms in the real estate industry are inundated with manual tasks, and AI can automate these to help commercial organizations and real estate occupiers save time. Processes such as lease abstraction, contract reviews, and hunting for terms and conditions in legal documents can be handled automatically. No-code AI gives real estate executives and analysts the ability to benefit from this tool, even without an IT background.

3. Quick training for regular tasks

With any AI-powered tool, the end user will need to “train” the system by introducing it to sample documents so it can learn what to look for and how to accomplish certain tasks. With no-code AI, this process can be done quickly, and once you’ve trained it to identify the type of information you need, whether it be a key term or critical lease clause, the system becomes more accurate every time it reads a document.

4. Can be used for predictive analytics

Artificial intelligence can be used for more than just documentation and lease management, however. While no-code AI can automate your business’s regular processes and pull key data from your leases, it also has the potential to be used for predictive analytics. AI has the capability to understand the terms that it extracts from a contract, which could give an occupier or lease administrator the ability to make better decisions and budget more accurately.

AI is one of many solutions that can drive the digital transformation of real estate organizations and help save time and money. While no-code AI is beginning to grow at a steady pace, MRI Contract Intelligence has been utilizing this technology since its inception. Contract Intelligence automates the data extraction and contract review process for commercial businesses and occupiers, helping them reduce the risk of costly revenue leakage and providing valuable insights hidden in documents. Learn more about how MRI Contract Intelligence can benefit your business.

With the massive shift to online working, learning and socialisation that has taken place over the past year, the customer experience is more important than ever. In the real estate industry, the relationship between you and your customers no longer revolves around the lease – now, it relies on the customer themselves, whether they’re a residential or a commercial tenant.

Technology that puts the customer first

With the real estate industry transitioning away from paper documentation and trending towards data and digital usage, it is clear that integrated portals and other forms of mobile and web-based technologies are critical to support customer engagement. But while self-service extensions of transactional systems are the most common starting point, there is a bevy of customer engagement solutions now finding their way into the real estate industry.

These new capabilities are helping businesses place the customer (not the lease) at the centre of the relationship by emphasizing certain categories, such as:

• Lifecycle tracking – Understand the tenant from pre-tenancy to post-tenancy, their needs and where they are in the lifecycle. It includes features like pre-tenancy tracking of leasing opportunities, pre-move-in tracking of paperwork and space readiness, tenancy tracking of satisfaction, financial health, lease options and upcoming renewals, as well as post-tenancy tracking of exit reasons and destination.
• Communication history – Track every phone call, email, and text message, both inbound and outbound so that any member of the team can engage with the customer on an open issue or as a follow-up to a prior item.
• Interaction history – See a full history of communications and compile information regarding portal logins, service requests, complaints, payment activity, after-hour needs and any other touchpoint between you and your customer.
• Comparative data – Understand how this tenant compares to other, similar tenants. This is especially important in retail, where performance can be similar in a category of stores. Leveraging analytics and BI solutions can drive future business in other properties where tenant profiles match desired tenancy characteristics. It can also show early signs of distress with existing tenants as compared to a peer group.

Tracking and managing the relationship from prospect to tenant and throughout a tenancy provides a richer context for business. Understanding all touchpoints between a customer and the real estate enterprise can provide important colour on renewal negotiations. Learn about the other real estate technology strategies that can benefit your business.

With the massive shift to online working, learning and socialization that has taken place over the past year, the customer experience is more important than ever. In the real estate industry, the relationship between you and your customers no longer revolves around the lease – now, it relies on the customer themselves, whether they’re a resident or a commercial tenant.

Technology that puts the customer first

With the real estate industry transitioning away from paper documentation and trending towards data and digital usage, it is clear that integrated portals and other forms of mobile and web-based technologies are critical to support customer engagement. But while self-service extensions of transactional systems are the most common starting point, there are a bevy of customer engagement solutions now finding their way into the real estate industry.

These new capabilities are helping businesses place the customer (not the lease) at the center of the relationship by emphasizing certain categories, such as:

• Lifecycle tracking – Understand the tenant from pre-tenancy to post-tenancy, their needs and where they are in the lifecycle. It includes features like pre-tenancy tracking of leasing opportunities, pre-move-in tracking of paperwork and space readiness, tenancy tracking of satisfaction, financial health, lease options and upcoming renewals, as well as post-tenancy tracking of exit reasons and destination.
• Communication history – Track every phone call, email, and text message, both inbound and outbound so that any member of the team can engage with the customer on an open issue or as a follow-up to a prior item.
• Interaction history – See a full history of communications and compile information regarding portal logins, service requests, complaints, payment activity, after hour needs and any other touchpoint between you and your customer.
• Comparative data – Understand how this tenant compares to other, similar tenants. This is especially important in retail, where performance can be similar in a category of stores. Leveraging analytics and BI solutions can drive future business in other properties where tenant profiles match desired tenancy characteristics. It can also show early signs of distress with existing tenants as compared to a peer group.

Tracking and managing the relationship from prospect to tenant and throughout a tenancy provides a richer context for business. Understanding all touchpoints between a customer and the real estate enterprise can provide important color on renewal negotiations. Learn about the other real estate technology strategies that can benefit your business.

In March 2020, when the pandemic hit and a state of emergency was declared, a large portion of the workforce, especially office-based staff, decamped and quickly transitioned to working from home. Business processes pivoted to embrace paperless processing, digital signatures, and video conferencing. Zoom meetings became the rage and “You’re on mute” was the phrase of 2020.

As 2020 wore on, it became clear that working from home was possible, and even successful, at scale. Naturally, this led to the more recent conversation about what we now need from an office, if we need one at all. While some small, satellite offices have been rationalised, the consensus is that an enterprise needs a home and its people need to come together…but maybe not like they did previously.

Considerations for the future of the workplace

While each enterprise must assess what is best for them, discussions and decisions will centre around the following:

Density – Space per employee has been shrinking, as has distance from others, and the pandemic will surely drive against that trend, creating more required space per person and raising the importance of space planning and flexibility.

Assigned desks vs. hoteling – The days of assigned seating may be behind us, especially if a significant part of the workforce continues to work from home with increasing frequency.

Meeting rooms and collaborative space – We’ll also have to rethink meeting rooms as it is unlikely that people will be excited to overcrowd any given space just to be part of a meeting. These rooms need to give way to better collaborative spaces as teams return to the office together.

Flexible space – Both indoor and outdoor open spaces have grown in popularity. In order to drive collaboration and culture, having large spaces that can be quickly repurposed will be of increasing importance as ways to bring larger groups together safely without sacrificing utility during more normal business activities.

Space as a service – Ancillary income can be brought into the organisation by making some of your space available on marketplaces like WeWork. Similarly, space needs outside of non-core office areas may be met with the use of flexible space from similar marketplaces and providers. The ability to quickly flex space up and down to meet needs is a growing trend.

How technology can transform your office environment

In addition to defining how space will be used, there are a number of opportunities to leverage technologies for space access and usage:

Space planning tools – These can help your organisation clearly and visually understand space layouts, staff density, flow and other elements of the configuration and to create alternatives that provide for the space options listed above.

Workspace reservation systems – As space becomes more fluid, technology can be used to facilitate workspace and collaboration space reservations, including in-space displays of current and coming reservations.

Entry/exit timing tools – There are certain high traffic moments that must be addressed when returning to the office. Interestingly, the lunch period is often more densely trafficked than the start or end of the day. To better ensure social distancing, some organisations are using time blocks to manage peak traffic to better address employee safety.

Access control and on-location awareness – Understanding who has access to a space, where they are allowed and, most importantly, if they are on-location is increasingly important. Presence management is key for:

• Air quality and other HVAC/climate sensors – Air quality and efficacy of filtration functions should be added to existing systems to ensure temperature is economically managed in conjunction with space usage.
• On-location messaging – Broadcast or individualised messaging can better facilitate entry and exit windows and space assignments while also providing a method for communications about various safety alerts and visitor services.
• Wayfinding – With more fluid use of space, employees may need wayfinding assistance to get to and from their key locations or to a colleague.
• Health and safety tracking – Unfortunately, contact tracing will still be an important topic as we get back to the office.

In-room video conferencing tools – Given the success that has been enjoyed with video conferencing capabilities, meeting rooms and other collaborative spaces will need to be fit with updated technologies that allow for in-person and remote staff to be equally included in collaborative experiences as the days of poor audio over a speakerphone are long gone.

As we continue further into 2021, the workplace will be reshaped not through incremental evolution, but with the lessons of a prolonged pause, a rapid adoption of technology and much thought about what a mobile, distributed, hyper-connected workforce really needs.

Learn more about the future of the workspace and how technology can help you prepare.

Real estate occupiers have been rethinking the traditional workplace even before the COVID-19 pandemic. A year into the “new normal” of working from home, attitudes and market trends have shifted dramatically, and it’s become increasingly clear that the workspace will not look the same when employees are invited back into their respective offices.

Tenants need to meet the new and changing expectations of their employees, and organisations are being challenged to rethink their use of office space, consider the safety and well-being of their staff, and understand how hybrid and flexible work models impact the future of office planning.

1. How will offices be used once employees return to work?

Bringing employees back into an office setting won’t be as easy as it sounds. Some employees have settled into this “new normal” and believe that returning to the office full time would be detrimental to productivity, while others look forward to going back to the traditional workplace. As companies navigate changing attitudes, the office space will have to be made appealing again. The office won’t just be a place where work gets done – it will be a place where people come to collaborate. Rows of cramped desks might need to give way to new spacing requirements, and small common areas that once brought employees together for lunch could be expanded into large spaces that focus more on community than rest.

2. Ensure staff safety and wellbeing on a global scale

While companies look to turn their offices into more collaborative, spaced-out environments, many of them will still have to contend with frequently changing health and safety regulations across multiple continents, countries, and cities. In addition to keeping up disparate safety requirements, the culture of work is likely to impact different office locations. While some in the US and the UK may not be comfortable returning to the office, many employees in the APAC region have already returned to their offices comfortably. This will present a unique challenge for global companies.

3. Explore flexible, hybrid workplace models

Taken together, these dynamics paint a picture of a future workplace that focuses on flexibility and adaptability above all else. Each company, region, office, and employee has dealt with the impacts of the pandemic differently, and workplaces will need to throw out the traditional “one size fits all” office layout in order to best accommodate all of the varying needs and changing market trends.

How technology can help you plan the future of the office

In response both to health guidelines and market trends that favour space, flexibility, and collaboration, workstations across the office will need to be spaced out, and in many cases, rearranged altogether with the help of space management tools. Creating enough space between desks won’t just help the property remain in compliance with local health guidelines, but it can also provide employees with peace of mind, boosting productivity. In addition, visitor management solutions can help offices cut down on foot traffic and manage all non-employee staff that enter the building – a huge step toward ensuring the safety and security of everyone on the property.

On the subject of desks being rearranged, organisations may also have to accommodate employees who don’t want to return to the office. One of the things we’re seeing in the return to the office is that many people want to remain either fully remote or on a hybrid work schedule, meaning that not every desk within the office will be filled at all times. Taking on an approach of “hotdesking” – where several employees might be assigned to one desk at different times throughout the week – can help offices consolidate desks and desk space.

With companies using fewer desks as a result of hotdesking or even hoteling, commercial tenants might come to find that they no longer need as much office space as they once did. In these cases, landlords and tenants will need to potentially reevaluate lease obligations and reach new lease agreements. Before taking on this process, both parties will need to have a clear understanding of what’s in their leases so they can effectively communicate and agree upon new terms moving forward.

As landlords and tenants both look ahead to a time when offices will reopen, both need to be prepared to collaborate in order to address changing market trends and needs among employees and other staff.