The golden rule of “location, location, location” that has guided industry wisdom for years is no longer as simple as it seems. That principle has been asterisked dozens of times over to include clarifications regarding what kind of physical asset is being offered, whether or not the value proposition is worth it, and what kind of digital amenities are offered in any given commercial space.

On a recent episode of “Building Success: A Real Estate Podcast,” Dror Poleg of Rethinking Real Estate lays out how the commercial real estate industry is being changed by physical assets that have gone digital.

Disrupting a field dominated by physical assets with digital amenities

Physical assets are rapidly transforming into digital assets in the real estate industry, and an increase in technological advancement is at the core of this transition. In previous years, new talent, resources, and tenants could be drawn into a business with the promise of a good location on a particular street, comfortable physical amenities like chairs, and other physical assets. In today’s day and age, these things are no longer thought of as amenities and are considered a given. When a tenant hears the word “amenity” nowadays, they’re far more likely to envision digital and technological assets.

These technological assets can look like anything from special software programs, system capabilities, and the speed of Wi-Fi coverage. Digital assets have the power to completely change companies, and not just ones that rely technology to function. Take two large companies that went public in 2004 for example – Google and Domino’s Pizza. While Google relies mostly on the ever-changing flow of technology, one might be tempted to think that Domino’s did not inherently need big tech upgrades. However, with the addition of digital services that made ordering pizza easier for their customers, Domino’s stocks shot up by 2000%.

Space as a service

Of all the disruptive technologies that have risen in recent years, one of the most notable is “space as a service.” What initially started as a helpful tool for freelancers and millennials has now turned into a critical digital asset, and that’s good news for both tenants and managers in commercial real estate. With the increasing popularity of this digital asset, managers now have a chance to offer a new kind of space that can bring in significant business, and tenants have the opportunity to work on a more flexible basis.

With shared workspace companies like WeWork, the idea of space as a service goes far beyond established spaces specifically for office work. With brand new technologies, any space can be transformed into a digital workspace or even a quick rest spot. For example, a restaurant that’s closed on Sundays can bring in extra profit by flipping their space and setting up a shared workspace environment. Space as a service is the kind of disruptive digital asset that works for producers and consumers, and it’s the kind that players in CRE should be paying attention to.

How consumers will drive the market

The future of the commercial real estate industry is far broader than technology. Assets are becoming more dependent on operators. It’s no longer enough to have a great building in a great location, you’ve got to have a differentiated operator running that building. It’s all about adding value. New operators create value with how they run buildings, making a great working experience a must-have – not an amenity.

To learn more about commercial real estate, check out “Building Success: A Real Estate Podcast,” and also be sure to learn more about MRI Software’s offerings for commercial operators.

Real estate investment trusts (REITs) aren’t just challenged by the need to comply with various requirements; they also deal with a higher level of risk than some of their private equity counterparts. The ultimate goal of REIT technology is to minimize vulnerability and help REITs adapt to various market changes. While striving to achieve this, they also struggle to balance that with maintaining strong investment performance to attract new shareholders.

The biggest challenges that face REITs revolve mostly around reporting, as they are always looking to provide returns back to shareholders from things like adjusted funds from operations. In the midst of all of this, REITs seek to mitigate any issues around debt requirements, and the technology systems these REITs use has a direct impact on their ability to complete their objectives. However, REIT technology improvements, such as an integrated systems, can help REITs face their frequent challenges with reporting, data accuracy, and visibility.

How can integrated systems benefit your REIT?

The challenges that REITs face revolve around the fact that they are often concentrated on a specific asset class as opposed to having a large variety of asset classes by which they can reduce their exposures to certain market conditions. There’s a real focus on how to best leverage debt, both secured and unsecured, to achieve their desired means.

Automation and reporting
Technology like integrated systems can help REITs because these systems allow them to easily ensure compliance with specific business and investment models. A lot of the processes associated with these business models can be automated, tracked, and audited. A system like this provides a lot of what would otherwise be a significant manual burden.

These integrated systems also support investment in a specialized asset class because they allow a user to easily understand and analyze market trends. REITs can easily consume information from multiple sources and present it in a way that is visually appealing. The systems are also efficient to adopt and analyze that information.

Data visibility and accessibility
REITs can use this technology to understand and mitigate risk by providing visibility into blended asset income and debt service. In this particular scenario, blending refers to a blending of both historical, actual information with forecasted information based on assumptive data. That specific benefit opens up an easier way to understand both what REITs are likely to encounter from a risk perspective and the kind of opportunities they can leverage to mitigate risk in the future.

Integrated systems assist in enabling quick and competitive responses to opportunistic acquisition/disposition transactions. In the past when things were done manually, this process was, in many ways, cumbersome to the point that people were missing out on strategic opportunities because they couldn’t finish the due diligence quickly enough. Systems that help automate that collaboration of information can enable REITs to act quickly when an opportunity arises.

Improved accuracy
The systems also support the timely decision making and audit requirements by reducing human error within the process. A lot of this error is mitigated simply because of the automation through systems. This means that when someone is looking at a report, they can be more confident in the data integrity.

Finally, these systems can help businesses deliver real-time reporting at every level of the REIT instantaneously. Modeling and reporting no longer needs to be done in Excel, which is usually a cumbersome process. REITs can use this technology to overcome their challenges.

Finalizing the new process

A REIT’s ability to overcome obstacles doesn’t have to be hampered by lacking technology. The software solutions discussed here are readily available to REITs so they can start streamlining processes and mitigating risk. MRI Software offers an Investment Suite of products that help REITs maximize efficiency and bring their organization up a level and prepare them to compete with private equity counterparts.

Watch the on-demand webinar here to learn more about MRI’s investment solutions and how they can help overcome the challenges facing your REIT.

People are living longer now than ever before, and while that should be celebrated, the real estate side of pensions funds recognizes that this creates a unique challenge for their pension fund management. These pension funds need to determine the optimal point to get the maximum output from the fund. Across all of that, they also need to be continually managing risk and keeping track of market fluctuations considering they have a commitment to payout at any given time.

Pension fund managers have to strategically plan for the future by taking that lump sum of money that’s been invested in the real estate portion of the pension/insurance fund and deciding how to allocate that sum to drive performance.

How can technology help?

The real estate aspect of pension funds needs long-term sustained growth to satisfy the retirement needs of clients. Like all good businesses, they need to manage debt to maximize returns, and ensure they have enough cash on hand to pay out at any time.

Strategic forecasting
Pensions funds have to think very strategically, and putting an emphasis on forecasting is critical to this particular market segment. Technology can help pension funds efficiently assess the impact of speculative pipeline deployment to compete for funds against other equity types. The ability to make quick strategic decisions about how to deploy several million dollars is critical in addressing needs.

Analyze market fluctuations
The right software solution can also help pension funds prepare for the future. These funds need access to technology that can easily analyze volatility and sensitivity to market fluctuations. When thinking about the future of pension funds, questions such as, “what if interest rates increase?” must be addressed proactively. Being able to assess these questions easily and with the help of technological solutions can help funds ensure that they’re properly set up with diversification and less risk exposure. That way, their clients’ retirement funds are can be properly secured.

Global capabilities
Pension funds are much more global today than ever before, and fund managers need software systems to provide comprehensive global, cross-border capabilities to address multicurrency requirements and regional standards. Even if funds are centered around a much more local group of investors, the assets in which they invest are highly globalized and highly diversified to hedge their bets across multiple regions and asset classes in markets. The ability to address multicurrency translation and multicurrency consolidation, as well as the ability to conform to regional standards of reporting, is critical. To manage risk without a globally applicable system requires an overwhelming amount of internal effort, knowledge, and processes, all of which are costly and time-consuming.

Drive performance
Pension funds also benefit from technology that can ensure maximum output by testing different exit strategies. This can be done by identifying low performing assets quickly so that they can be discarded at the discretion of the fund and the capital recycled in a proper way.

Finally, software that can quickly produce attribution reports can aid pension funds in optimizing performance across asset classes, regions, and strategies. As a pension fund, you need to be able to generate reports that can drill down into all the information and divide everything into proper groupings such as asset type, sub asset type, region, sub region, and so on. This ability is critical to identify the strongest and weakest parts of a pension fund’s portfolio, so the fund can plan even more strategically for the future.

What’s the solution?

The challenges facing pension funds can feel daunting at times due to the nature of the business, but adapting these types of technological solutions can make any organization more prepared for what may lie ahead. For these challenges and many more, MRI Investment Suite provides pension fund software to help funds compete on a more even level with other private equity firms and organizations.

Watch the on-demand webinar here to learn more about MRI’s investment solutions and how they can help overcome the challenges facing your fund.

MRI Software is proud to announce Version X.5, the latest release of our web-based real estate accounting and property management software. Building off the strong foundation of our popular Platform X, the most recent version combines powerful new functionality with feature enhancements to enrich the user experience and improve operational efficiency.

New features in Residential Management

Version X.5 delivers several new features to Residential Management within MRI as well as new capabilities for the UK market. Core functionality updates have been made to the batch entry process to allow users to disable cash types in batch entry and also create and post batches from multiple properties. Keeping with the theme of extended functionality across multiple properties, a new drop down box enables users to narrow searches for prospects and residents across multiple properties. Finally, from within the MRI-GO results screen, MRI has added the ability for users to create a service request from the GO Card without leaving the GO search screen. Once the service request is saved, the user returns to the MRI-GO search screen and can perform additional actions.

In the UK, MRI announced the general availability of the Residential Suite with features and functionality designed specifically for the UK residential sector. These include:

• Flexible rent dates: UK property managers have the flexibility to adjust the monthly rent due dates for any tenant.
• Proration: Real estate organizations have the ability to prorate on an annual or monthly basis.
• Step-ups: This solution enables the rent on a multi-year tenancy to increase annually, making it easier to manage three-year lettings.
• Break clause: Property managers can set the ability for a resident to break a lease without penalty after a certain amount of time in the unit.
• Common banking: Fee managers can collect rents into a common bank and then disperse the funds into the proper accounts afterwards.

Now available in Commercial Management

Updates to MRI Commercial Management are designed to make accessing information more efficient by assisting common user activities. For example, when a user is typing in a lookup field, MRI will intelligently attempt to find matching look up items based on user keystrokes.

New features include Multicurrency Recoveries, which enables users to calculate recoveries in a currency different from the base currency for that entity. This delivers the ability to capture expense pool amounts in the target currency based on the AP invoice date and using the daily exchange rate. This reduces the risk associated with fluctuations in exchange rate and results in a more accurate recoveries process.

Accuracy is a critical component in the development of a new CM/GL interface page that allows the user to review the interface details in a single grid and make any updates from this view. In this release, the calculation of Bad Debt Reserves is now automated. Users can now designate bad debt percentages by asset class or entity and automatically calculate and journalize those entries.

MRI Fixed Assets tightens the integration with MRI Financials

In MRI Financials, the X.5 release represents a significant step forward for the integration between MRI Fixed Asset Accounting and the General Ledger. Users can now create assets in MRI Fixed Asset Accounting by entering invoices and journal entries in MRI. This automated process will save hours of manual entry and reduce errors and reliance on spreadsheets.

Enhancements to Budgeting and Forecasting

In this release, Budgeting and Forecasting users will notice greater control over workbook functionality, including new check-in/check-out options, the ability to lock workbooks and delete a workbook from a budget. New fields, filters and column headers offer users greater visibility and flexibility across various time periods. Finally, enhancements continue to the Residential Management functionality as multiple collection frequencies can now be budgeted and users can enable step-ups from the Property Options tabs upon release.

What’s new in X.5 Reporting

The release of X.5 introduces a redesign of 50 of the most commonly run reports within MRI. This new, contemporary design delivers a streamlined and accessible look and feel to these reports. Additional information about the report itself is arranged so that users can recognize the key aspects or parameters of the report at a glance.

For users requiring additional detail, Advanced Filtering has been added to the runtime option page to allow users to run query-like parameters against reports to dig deeper into the requested data.

Introducing the web interface for Security Console

X.5 marks the first release of the web interface for Security Console and represents a major step toward combining the functionality of security console in windows and security manager. The new web interface improves the overall navigation experience as well as makes processes such as creating and setting up new users more efficient and intuitive.

Already an MRI Software client? Download Version X.5 from the MyMRI client portal.