20 Dec 2022
o make sense of it all, numerous enterprise solution technologies were created to capture the information for financial services, healthcare, and other professional services sectors. However, the end result has been a plethora of siloed technologies with no connection and virtually no way to communicate or consolidate the information into a single view for meaningful analysis. The phenomenon has not been as true as it is today in real estate, where online public and numerous other data heavy sites can provide large amounts of information. While these data sites are seemingly adequate, it’s rare that the data is available at the scale needed for careful contextualization and the ability to optimize real estate assets. Fortunately, we are witnessing a dedicated, innovative sweep and digital transformation occurring across the wider real estate sector.
Disparate data sourcing is one reason asset managers can spend up to 80% of their time just to make it ready for analysis. By using technologies for everyday practices, this common and arduous road map of data extraction, remediation, and enrichment can be completed more easily and with greater consistency. Processes for evaluating individual assets include exhaustive data scrubbing and entering the right information. Data from documents, images and files can be extracted much more easily with NLP processing and then layered with AI for best results. Overall, technology can be used to provide a much more seamless process in going from raw data to formatting, structuring, and then to standardize the data for its automated transfer into a database for further due diligence and reporting.
Real Estate analysis, subject to geopolitical tensions, volatile credit and debt cycles as well as nebulous property values, can no longer rely on manual or legacy in-house systems to maximize value. The pace of change and volatility are rapidly changing paradigms that in-house legacy systems are based on. Liquidity models depend on data from market comparables, rent rates, auction results and other factors that all require extensive remediation. New proprietary analytical platforms are able to replace the guesswork when combining multiple variables around determining value and liquidity. In one example, results were compared describing the difference in a manual approach vs the use of technology designed to efficiently engage in the process of cleansing, organizing and migrating data. The sample included enriching a datatape for an NPL loan portfolio consisting of 6,000 pieces of collateral. Manually, this is a daunting task, given the incomplete data and incompatibility between assets and documents that are not matched within the tape. The manual nature of extracting key fields within the documents and supplying additional data with open sourcing also serves to further complicate the matter. Manually, the task took over 128 hours and 2 analysts to complete. The use of a technology developed specifically for remediation and enrichment activity only required 1 analyst and 18 hours worth of time. That is a stark difference. Technology indeed is capable of supplying asset remediation and enrichment services that replace high cost and error prone manual processes.
From the example, it’s clear that today’s economic environment requires a more comprehensive and accurate assessment that cannot be achieved with yesterday’s tools. Real estate professionals can better understand value and liquidity and the target market for any asset by using technology. Not only are older obsolete processes cumbersome and time consuming, but they also present significant risk as an impediment to arriving at the bottom line and getting ahead of the competition. The inefficiency is remarkable.
Without a more integrated approach, disparate data will only continue to provide more inaccurate and undefined information. Today, the sheer numbers of siloed technologies and information is on a path to becoming unmanageable. As we continue to place a greater emphasis on decision making tools that are able to provide a thorough and comprehensive view without having to manually reconcile information across multiple systems and platforms, proptech will continue to create a new category of technology capable of serving today’s needs in data requirements. New real estate technologies today can provide a real path for more seamless, interconnected systems with the ability to transfer the information in the correct context for every stakeholder. The bottom line is that technology can help minimize risk and improve time efficiency while optimizing profits.