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Six Reasons to Use Real Estate Asset Management Software

By Devon Maresco
Marketing Coordinator
SpaceIQ

The question on every corporate executive’s mind is whether to downsize, scale back, or consolidate the company’s real estate portfolio. This is especially important in a post-coronavirus world as the workplace undergoes yet another change. As real estate managers forecast the future, they need quantifiable data about facilities. Real estate asset management software can provide this data and the insights that contextualize it.

Here’s a look at six of the most important reasons real estate managers need asset management software and the benefits it provides.

1. 1,000-foot view of properties

Asset managers need to understand each property from a cost-benefit standpoint. That means looking from the top down, to see the factors that make up both sides of this equation. It’s easy to look at fixed costs on a balance sheet—asset management software provides additional insights that contextualize those larger figures.

A broad view of facility costs and revenue becomes particularly handy for higher-level decision-making about property-specific changes. What’s the current cost per square foot vs. occupancy vs. revenue? How do maintenance costs factor into total cost of ownership? The answers to these questions and dozens of others provide broad context for facilities, which lends credence to them as assets.

2. Quantifiable financial metrics

In the scope of portfolio decision-making, what does a real estate asset manager do? In simplest terms, they provide quantifiable insights for executives and other stakeholders. That means delivering real estate data and information in the form of key company success metrics. These insights aren’t always easy to come by, which is what makes real estate asset management software so vital.

With the proper infrastructure, asset management reporting software will deliver core company metrics available at a glance. This can include the cost of the lease and annual maintenance, month-over-month spend on facilities, revenue performance by location, and much more. These are the figures decision-makers want to see as they contemplate the future of facilities.

3. Asset-based insights

It’s easy to delineate the many functions of a property. A real estate asset manager faces the task of quantifying these functions and understanding them in the context of an asset. Asset-based insights are what C-suite executives and portfolio managers want as they make decisions about the direction of a company. Asset-based insights and their contribution to financial metrics are what aid in that decision-making.

Each asset-based insight creates an opportunity for asset optimization. Can you cut costs here? Realize new revenue opportunities there? Defining the various monetary contributors to real property’s place on the balance sheet unlocks the potential to modify them.

4. Forecasting, simplified

Real estate asset management software might tell you that a facility is operating far above capacity and generating less profit than a comparable property. Or, it might show that the maintenance costs of an old building make it a drag on the balance sheet. In these situations, available data promotes better forecasting. It’s about using the data you have now to make ROI-driven decisions about real estate for the future.

Forecasting using real estate asset management software can aid in everything from budgeting to asset planning. If companies can see the role of their facilities far into the future, they’re more equipped to make confident decisions about them in the present.

5. Contextualize workforce distribution

Asset management isn’t only about managing the asset itself—it also involves who (or what) interacts with it. In the case of corporate real estate as an asset, that means looking at workforce distribution. Real estate software readily provides this data, including data for capacity, occupation, cost per head, and other workforce-specific costs and figures.

As companies manage assets, they need to do so with the workforce in mind. After all, the core purpose of facilities is to support the people working within them. Treating real estate like an asset means considering ROI from a workforce standpoint, which means contextualizing the workforce across real estate holdings.

6. Generate reports, shareable insights

What is real estate asset management without contextual reports? Just like a securities manager might look at a candlestick chart before acting on a position, asset managers need to compile, organize, and contextualize data. This is a herculean effort without real estate asset management software. Thanks to machine learning and automation, most modern software is smart enough to aggregate and deliver the insights most important to managers—including cross-examining cost data with non-financial metrics.

Rely on the convenience of software insights

These benefits all add up to something invaluable: asset-based insights about real estate. Looking at real estate through an asset evaluation lens can provide crucial insight for portfolio managers, executives, and other stakeholders as they determine the right path forward for their real estate holdings and facilities. The simplest way to get these insights? Real estate asset management software.

Keep reading: How Agile is Your Real Estate?

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Workplace Thought Leadership

Digital Twins

By Noam Livnat
Chief Product & Innovation Officer
SpaceIQ

Is your company using a digital twin to manage your workplace? While electronic representations of real-world objects have been around for decades, businesses are now exploring novel ways to harness this technology and combine it with business processes, driving efficiencies and data-driven decision making . Because a digital twin is composed of data layers, the latest innovation is to add a “personnel layer.”

A digital twin opens this virtual representation to a new class of workplace management professionals: human resources, space planners, and employee experience managers. A dynamic digital twin of your workplace will yield actionable data that affects everything from space planning and move coordination to lease negotiations and employee management.

The DNA of a Digital Twin

Simply put, digital twins provide electronic means to represent physical items. They can be simple and static as a two-dimensional CAD file of your floor plan. They can also be more complex, such as a cloud-based application that dynamically represents your global real estate portfolio, from the location of each building down to the position of every security camera or defibrillator.

But without additional data to provide context and without supporting business processes, a digital twin is just a visual tool. With detailed layers of shared data, however, a digital twin enhances an organization’s ability to operate efficiently and make smart  decisions.

Consider a common object like a coffee maker. The machine comes with a printed manual that typically includes a cutaway diagram and basic instructions. But this information is static and analog—it can’t be easily updated, searched, or shared with multiple users. It also can’t be merged with related data sets, like your monthly coffee expenditure.

Now imagine a digital twin of the coffee maker. This virtual model captures the smallest details of its construction, allowing you to easily troubleshoot errors. The digital twin also contains a wealth of usage and maintenance data, all of which helps you to maximize lifecycle costs.

This is just a taste of what a digital twin can do. What if you could document that the coffee maker is located in your main kitchen, was last serviced two months ago, brews an average of four gallons a day, and is one of three other machines at this office? The data contained in this digital snapshot radically alters how you can maintain this single asset. These powerful insights can now be applied to an entire building or portfolio to proactively manage workplace expenses.

Digital Twins and Workplace Management

Building owners and property developers are already familiar with CAD (computer-aided design) and BIM (building information modeling). While these tools offer insights into physical property, they are ultimately disconnected from the most important part of your business—employees and their associated real estate costs.

The value of real estate has historically been tied to square footage, but what if it was linked to headcount? What if the question we asked was: “How much does it cost to place one employee in my building? What about 100 employees? Or 250?”

BIM and CAD simply aren’t equipped to answer those questions. They aren’t configured to tell you the number of assigned desks versus hots desks. They do not show that Mia, Jacob, and Alyssa sit in a row of private offices. And you can’t use them to assess the impact of increasing or decreasing your workforce. There’s simply not enough information available to decide whether or not to renew a lease.

But a workplace digital twin with operational management capabilities is an extraordinary opportunity to improve operations, enhance service quality, and transition to fact-based decision making. A digital twin transforms how decisions are made in four key areas:

  1. Space & Asset Management – A digital twin enables you to monitor office occupancy to make sure it remains within your targets: too low and you’re inefficient, too high and you have (literally) no wiggle room. For example, you can create a rule that stipulates floors shouldn’t exceed 90% occupancy. When the headcount reaches the 85% threshold, the digital twin can generate an alert.
  2. Move Management – Paper copies of seating charts are an outdated and clunky method to coordinate office moves and quickly turn into a scribbled mess when multiple departments are involved. But with a digital twin of your workplace, planners can collaborate and provide real-time input instead of exchanging hard-copy drawings and combining the data. You can retrieve an exact count on any floor at a glance. You can then explore different allocation options with a few keystrokes.
  3. Lease Management – Without integrated data, it’s nearly impossible to determine whether your portfolio can support your future business needs. Is it more economical to add employees to a Denver office or expand an existing San Diego location? A standard lease doesn’t tell you that—you can only compare the price per square footage. A digital twin enables you to proactively manage real estate expenses. For example, you could set an alert nine months before a property’s lease ends. This advanced notification creates a window of time to consolidate square footage, change your office density, or terminate the lease.
  4. Employee Management – Managing new hires and existing employees is usually the domain of HR, but what about resignations or terminations? If you only have a tool like BIM or a BMS (business management system), there’s no process in place to indicate when and where a person has been removed.

A digital twin that interfaces with HR software merges siloed data into one platform. Imagine an automatic push when a person’s employment ends that goes to the space manager, facilities department, and security team. Without this kind of automation, it’s a challenge to distribute this critical information to all the necessary contacts.

A digital twin with layers of workplace insights provides a shared picture for key leadership. It automatically merges data from separate systems to help improve processes and support decision making in a context-rich environment. In addition to collaboration, this virtual double can be leveraged to run reports and scenarios. With a digital twin, you can pair staffing forecasts with real estate costs and uncover innovative ways to maximize your operational expenses.

Keep Reading: Digital Twin Software: Maximize Solutions and Benefits