The Lobby CRE team hit the road again to participate in the 2023 National Apartment Association (NAA) Apartmentalize Conference. During the conference, our CEO, Anne Hollander, joined Tim Kramer, Vice President and Director of Operations of Draper and Kramer, and Leah Cuffy, Director of Advocacy Research at National Apartment Association for a panel discussion about how to leverage technology and benchmarks to optimize apartment budgeting strategies.
Read ahead for highlights from the discussion.
Budgeting Pain Points for Apartment Owners and Operators
Budgeting can be a significant challenge for commercial real estate (CRE) owners and operators, leading to various pain points that they must navigate. When times are good, an annual budget is often adequate. But when we’re battening down the hatches, quarterly reforecasts of your budget should be the norm
Market fluctuations and changing regulations can introduce uncertainties that impact revenue projections and complicate long-term planning. Balancing the need for cost control with the necessity of maintaining competitive and attractive properties poses yet another challenge. Overall, these budgeting pain points demand a strategic and proactive approach to financial management in the commercial real estate industry.
CRE Technology’s Impact on Budgeting and Forecasting
CRE technology has had a significant impact on budgeting and forecasting processes, revolutionizing the way organizations plan and manage their finances. By leveraging advanced analytics, data integration, and automation tools, CRE technology enables businesses to streamline their budgeting and forecasting tasks, resulting in improved accuracy and efficiency. With access to real-time data, businesses can make informed decisions and quickly adapt their financial strategies to changing market conditions. Additionally, CRE technology facilitates scenario analysis and predictive modeling, allowing organizations to assess potential risks and opportunities, optimize resource allocation, and align their budgets with their strategic objectives. Overall, the integration of CRE technology into budgeting and forecasting processes empowers businesses to make more informed, agile, and effective financial decisions, ultimately driving greater operational efficiency and profitability.
What to look for in a CRE solution:
- Integration to the PMS
- Integration & alignment with market data
- Alignment with investments and proforma
- Stress-testing with clearly defined assumptions
- Automated insights
For apartment owners and operators, visibility isn’t the biggest benefit of CRE technology. Rather, clear communication and alignment on expectations among everyone from the property manager to the asset manager, owner, and investors is a key impact. For example, a tool like I/E IQ Benchmarks grounds the conversation in the reality of the market and helps them avoid overzealous, unachievable objectives and outcomes.
Future Projections of CRE Technology and Multifamily
The panelists posed some thought-provoking questions pertaining to the future of commercial real estate technology and the multifamily asset class. The three questions they asked were:
- Can you imagine a world without Excel?
- Can you imagine a world where your budget creation & monitoring are automated?
- Can you imagine a world where your forecasts are continually updated based on micro & macro trends?
If your answer is yes to each of these questions, congratulations! According to the panelists, when CRE technology and multifamily collide, the future could look a lot like this. As technology advances, we can anticipate even greater integration of innovative tools in the multifamily space, revolutionizing how properties are managed. Automation, artificial intelligence, and data analytics will become more sophisticated, enabling property managers to optimize operations, improve energy efficiency, and enhance tenant satisfaction. Smart building technologies will be more prevalent, integrating various systems to create seamless and interconnected living environments. Tenant engagement will further evolve through personalized apps and smart home devices, enabling residents to have more control over their living spaces.
As multifamily owners and operators consider their budgeting pain points, CRE technology can help them better manage property and portfolio outcomes. Want to learn how Lobby CRE can help multifamily operators and owners drive cashflow? Contact us today.