It’s Go Time For REITs… That Embrace Tech
The REIT (Real Estate Investment Trust) industry continues to grow, topping 907 Billion in 2014. As aspirations of continued growth remain top of mind for all REITs, a renewed focus on injecting technology across all facets of the business has become paramount.
REITs that embrace technology will have the ability to predict the future through advanced prospect modeling, will operationalize and automate their business while mitigating risk, and will increase their products marketability significantly.
With the REIT industry traditionally slow to adopt tech, instead relying on the intuition and entrepreneurial spirit of talented portfolio managers, risk remains an issue and operational inefficiency continues to erode the bottom line. Additionally, as many domestic REITs go global, many struggle to manage international rules and regulations in the absence of an automated and globally scalable technology platform. With 30 countries having adopted REIT laws, global adherence can get very complex. In addition, foreign currency fluctuation, hedging scenario modeling, and currency conversion play into the mix. Without an infusion of tech, there are simply too many variables and too much complexity to effectively scale.
At present, there remains huge upside for REITs that ensure that technology is a core tenement of their overarching strategy. Expansion is a two way street, with internal efficiencies via automation of process as important as empowering the dealmakers to effectively prospect and close high value deals quickly. Tech will disrupt the business from within and will seek out inefficiency while providing insight into new markets and undervalued opportunities.
With rapid industry expansion also comes increased scrutiny by both regulators and informed shareholders. Access to more information and increased transparency are now common requests. As the REIT industry becomes increasingly complex and shareholders increasingly demanding, technology must be deployed to maintain competitive advantage while keeping all parties constantly informed along the way.
While profitability is always top of mind, shareholders are now, more than ever, vocal about the specifics of the asset type, with sustainable products often a core differentiator that is being demanded by customers, special interests, and regulators alike. Good global portfolio management requires a nimble technology platform to track the global asset mix to ensure the best marketability scenarios while also ensuring that ever-changing reporting requirements are met.
With the REIT industry continuing to expand, continued durable and rapid growth will rely heavily on the effective use of technology to solidify the internal process, ensure scalability and adherence to law, and empower the dealmakers to identify and execute deals in record time for record value. The tipping point has arrived; the REITs that embrace tech will gain competitive advantage and the results may surprise you. The hottest REITs of tomorrow will be tech infused!