Right now, every penny counts. The real estate industry has been significantly impacted by the coronavirus pandemic and, as a result, landlords are facing increased operating costs to comply with local health ordinances and paying closer attention than ever before to property-level cash management to better plan for what the “next normal” will look like.
To prepare for the future, landlords need clear, accurate property data on demand. Unfortunately, too many miss out on opportunities to carefully manage their property-level cash flow because of basic data management problems.
Research shows that 45% of commercial real estate teams are spending 15% to over 25% of their time managing and organizing data, equivalent to two to three months of the year. To make truly informed decisions amid the uncertainty, the real estate industry needs to embrace financial performance solutions.
“The pandemic is forcing landlords to take a closer look at their properties’ operating financials so they can understand how they’re spending and making every dollar,” said Charlie McComas, head of sales at Waypoint, a CRE proptech firm. “To do that, they need data that they can trust, and the best way to get that is through leveraging a financial performance tool versus creating more and more ad-hoc custom reports using a business intelligence solution or Excel.”
Many landlords make the mistake of depending on operating partners’ accounting systems and software tools instead of their own. They also rely on spreadsheets for financial reporting while asking asset managers to work in their own vacuums, and lack standard financial accounts or naming conventions between acquisition underwriting models and asset management reports. Financial performance tools can help solve these issues.
Companies such as Anaplan, Planful, which was formerly known as Host Analytics, and Workday Adaptive Planning, which was formerly known as Adaptive Insights, are examples of financial performance and planning solutions that dominate the corporate world. Solutions like these have become popular among Fortune 500 companies, especially during economic downturns, to gain greater insight into their business.
Despite the growing popularity of these platforms, most landlords lack a consistent method for managing and maintaining crucial financial data throughout the life cycle of a property.
“The Band-Aid the real estate community continues to rely on is using Excel or a business intelligence tool like a Tableau or Power BI,” McComas said. “By doing this, you are just kicking the can down the road instead of fixing the problem, which silos off your team from working together off the same data types.”
This common approach leads landlords back to confusion, lost revenue and lost opportunities. By adopting financial performance solutions like Waypoint, landlords can solve many of the issues that lead to this confusion, like acquisition teams using “on-the-run” abbreviated and separate account naming conventions and inputs.
With financial performance tools, landlords can receive continuous custom reporting that can be standardized across the business, as well as more accurate data to support strategic decisions internally and share externally with investors or partners to continue to earn trust.
“The job of an asset manager has become much more complicated,” McComas said. “They don’t have the time to pore through spreadsheets trying to interpret different data to make sure the numbers are accurate. Waypoint, the financial performance solution for CRE, collects and standardize that data for their clients and puts it all in one, easy-to-view place so they can make decisions faster and move on.”
Waypoint helps automate, accelerate and align the day-to-day financial and operational management of commercial real estate portfolios.
As the next-generation operating system for asset and portfolio managers, Waypoint connects the critical information across its clients’ portfolios and automates financial management workflows, enabling its clients to spend more time on what matters most: analyzing investments, building trusted relationships and generating increasing returns.
This feature was produced in collaboration between the Bisnow Branded Content Studio and Waypoint. Bisnow news staff was not involved in the production of this content.