Prevent decision gaps with real estate capital planning technology
Capital planning for real estate is more than a series of tasks to check off your list. It’s a value-generating workflow involving multiple inputs and resources that help you ensure efficiency and maximize asset performance.
Financial teams must be well-equipped to manage resource allocation, operational efficiency, and mitigate risk appropriately to manage day-to-day activities once capital plans are in action. And as global markets welcome more certainty with slowing inflation and stabilizing interest rates, real estate investment is projected to increase significantly in the second half of 2023 and into 2024. It will be crucial for organizations to develop an effective capital planning workflow.
What makes capital planning successful? CFOs, financial executives, and analysts must have access to reliable data and visibility into each aspect of the process. But when multiple departments, inputs, and systems are required to manage the capital planning process, you run a greater risk of disconnected, siloed data. That becomes a problem because financial professionals can’t easily find the information they need in a timely manner, which leads to unwelcome and costly mistakes.
A unified view of your real estate capital planning workflow
The good news is that it is possible to achieve data visibility and quality across all functions you’d expect from a single capital planning management system without sacrificing the flexibility to choose the software that works best for you at each stage in the workflow. We call this “conquering the chaos” with connected financial systems that produce accurate, real-time data and identify patterns and trends that inform your decision-making processes for current-status budget allocation and capital spend.
How can you integrate and unify your capital planning processes? Let’s look at how technology can help at each step.
1. Making decisions about deploying your capital
The initial stages of capital planning involve lots of analysis and decision-making – from proformas to site and vendor selection and setting budget and ROI expectations. The planning team may also need to secure funding or capital from investors when additional resources are needed. The financial analysts involved in these activities can benefit from fund and asset modeling software to ensure robust and speedy analysis across multiple models to better assess long-term performance.
2. Managing the construction project
As the project itself begins to take shape, construction and development teams rely heavily on technology to optimize project performance. Construction management software like Procore is essential to manage the workforce, report on progress, track permits, and more. ERP solutions like MRI Property Management X (with modules like MRI Job Cost) provide a comprehensive view of the project and actual vs. budgeted spend. These solutions help CFOs and financial analysts stay in the loop regarding cost control and budget commitments.
Integrated commercial property management software solutions help reveal the story behind your financial data so you can make smart and agile decisions for your capital expenditures and navigate the day-to-day challenges of implementing your capital improvements. Additionally, tools that integrate and share data can better manage fixed assets and centralize the budgeting and forecasting process, further streamlining the job of financial executives tracking capital for the construction project.
3. Making the asset profitable
Accountants, controllers, tax specialists, and property managers play a crucial role in stabilizing the new asset and ensuring its long-term profitability. Now is the time to bring in occupants and proactively manage the property to ensure tenant satisfaction and lease renewal. A property management software that brings together data from all project phases will provide a high level of visibility for real estate financial executives and other stakeholders working to maximize performance across the portfolio.
Manage your end-to-end capital planning workflow
There’s no one system that will handle all aspects of real estate capital planning exactly the way you want, so your firm needs the flexibility to choose the tech tools that work best for you. That’s why MRI Software and our ecosystem of more than 200 partners is designed to integrate your tools of choice and help you create a competitive edge through technology. Our solution creates a backbone that helps all parts of your capital planning process work together to make your real estate vision a reality.
Don’t let data decision gaps keep your real estate vision from becoming a reality. Contact us today to learn how to integrate all parts of your capital planning process.
Breaking Down Data Barriers: Derwent London finds a better way to work by linking lease data and planning tools
As the largest London-focused real estate investment trust (REIT) in the UK, Derwent London plc owns 77 buildings in a commercial real estate portfolio predominantly in central London valued at £5.7 billion. Typically acquiring central London proper