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June 15, 2020
How Better Data Management Can Influence Transactions
Written by: Erik Sherman
Transactions are one of the most lucrative business activities of Commercial Real Estate investment firms. Currently, many of the systems that drive this activity are outdated and do not reflect the quality and accuracy that is crucial when communicating with lenders and other third parties. The solution is simple: investing in better data management elevates data integrity and the outcome is transactions that are more streamlined, efficient, and profitable. Here are the ways we believe that better data management can have a positive impact on transactions in CRE.
Efficiency With Centralized, Cloud-Based Data Management
As access to data increases, the sheer quantity of data available to CRE professionals will only grow as well. With more data comes the increasing demand for a centralized data platform, otherwise, information becomes siloed with no one or nothing to make sense of it all. Further, the quality of that data means nothing unless it is accessible to everyone in the organization at all times. This need has been stress-tested in a time where employees are scattered across the country, yet the need for quick access to critical data has remained the same, if not increased.
In terms of transactions, deals are still happening even amidst an economic slowdown and a decentralized office space for organizations. Efficiency is key as firms are more frugal with cash - even in strategic decision making for transactions. The quality of asset data and the fact that it should be centralized on the cloud will make for a simplified data aggregation process with which to model, forecast, and make decisions with acquisitions teams on the same page.
Collaboration Both Internally and Externally
Better data management makes for better collaboration both internally and externally. While email collaboration isn’t going anywhere, there has to be a solid foundation for which acquisition teams, asset management teams, lenders, appraisers, and other third parties access their data. The closer you can get to the source documents the better and knowing that all parties involved are looking at the same data leads to a better understanding by all.
Further, data platforms must be intuitive with design and experience in order to seamlessly include others outside of the organization. If this is guaranteed, then analysts and asset managers will spend less time making data readily available because it already is with a centrally managed platform. Custom reporting features and easy data exports make data manipulation fast and fit into normal processes while expediting the activities and leaving more time for analysis.
Confidence When Integrating Into Accounting Systems
Traditional abstracting methods are no longer the industry standard. By adding an additional layer of complexity, the data CRE professionals are given reflects inaccurate, outdated information. With better data management through a centralized platform, accounting systems are fed up-to-date, accurate information directly from the source. This speeds the transaction process as teams are no longer second guessing abstracts or accounting information. All the time spent flipping from abstract to lease document to accounting rent rolls is simply no longer necessary - or if it is, takes a fraction of the time.
Comprehensive Data Room For Streamlined Due Diligence
Siloed data only makes for setting up hoops to jump through in the due diligence process. When it comes to familiarizing with an asset quickly and comprehensively, real-time reports fed by data straight from source documents ensures that there is a solid data room with which to work with when driving the DD process forward. Data management sources need to be a one-stop-shop for teams to find all the information about a property in order to feed processes correctly. Data transparency means even further detailed understanding which can be included in reporting and communication both internally and with third parties.
CRE professionals who use Prophia Cloud access critical lease information from anywhere in the world in a centralized, cloud-based platform. Prophia extracts meaningful lease data and dynamically tethers it to source documents, making custom reporting, modeling, exporting, and data reconciliation more advantageous for all CRE executives and acquisitions teams.
Tag(s): Thought Leadership
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