April 5, 2023
With prominent Class-A commercial properties throughout Manhattan and a dedication to environmentally responsible operational and financial practices, it’s safe to say RXR has played a very influential role in CRE, managing approximately 30M square feet in Class-A properties on Madison and Park Avenue, Time’s Square, and beyond.
So it was no surprise when RXR, a commercial real estate firm dedicated to staying on the cutting edge, needed an intelligent and easy-to-use digital solution for managing their office and retail portfolio, Prophia stood out as a natural fit to solve the unique data challenges their team was experiencing.
Read on to learn more about Prophia’s pilot to portfolio relationship with this leader in CRE and how Prophia’s CRE tech solution continues to make a daily impact in the speed of their business intelligence, the ability to collaborate and more.
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Identifying the Data "Problem"
Preparing the Pilot
The Result & The Prophia Difference
Identifying the Data “Problem”
The commercial real estate industry is one of the largest business asset classes in the world. In 2018, the industry reported managing 97 billion square feet of floor space across 5.9 million commercial buildings. This staggering number puts into perspective just how much data CRE professionals manage within a single commercial portfolio, including all of the utility, legal, tenant, addendum, encumbrance, and lease documents it takes to effectively manage commercial assets.
For RXR, and many firms like it, managing all of this data was a manual process. This resulted in issues with data accuracy, governance, and team member’s time spent primarily on administrative tasks or sifting through unstructured data to find critical information.
“...the genesis came from conversations with the leasing and investment management teams about the manual effort required to find documents and our often counterintuitive internal file structure.. It was challenging for the team to get any insight into the portfolio and look at any cross-portfolio or cross-tenant trends.”
Joe DiSalvo, SVP, Corporate Controller at RXR
The RXR team needed a powerful digital solution to regain confidence in the accuracy of their data and supply them with decision-ready information. And this specific criteria led them to quickly eliminate certain solutions that their peers and competitors were using for their own data processes.
Selecting a Viable Candidate for the Initial Pilot
When RXR first went to market for a tech solution, there was some debate, internally, about what the team’s data needs really were at the time. While document organization was top-of-mind, internal feedback and discussions with CRE peers uncovered that RXR needed more than a simple way to share documents, the team would also require a sophisticated lease-reading and abstracting component, as well as the ability to conduct advanced searches across the portfolio.
“Many tools we looked at didn’t have the cataloging functionality. The other platforms we researched also didn’t offer the same attributes or, at that point, or weren’t as smart on the lease-reading piece as Prophia.”
Joe DiSalvo, SVP, Corporate Controller at RXR
They quickly eliminated DocuSign and Dropbox from consideration as well as eBrevia and turned to PropTech solutions that were specifically built for CRE. This change to their criteria naturally led them to MRI, Yardi, and VTS, but none of the three options had complex leas-reading abilities. It wasn’t until an old connection with Cameron Steele, Prophia’s CEO, placed them in front of what would become RXR’s data solution of choice.
Success of the Pilot & Onboarding The Rest of Their Commercial Portfolio
Adopting new tech can be an expensive and time-consuming process, so RXR wanted to approach this process with an abundance of strategy in order to discover the right solution. This led them to form a tech committee made up of department heads to track KPIs and any ROI throughout the trial and pilot stages. Those KPIs included:
- Ease of use - The team was looking for a digital solution that allowed them to access premium features out-of-the-box.
- Accuracy - One of the challenges of the team’s manual abstracting processes to that point was data accuracy. RXR needed a solution that instilled confidence in their portfolio data once their documents were fully integrated.
- Versatility - The team was also looking for a tool that could easily integrate into their existing tech stack.
- Time saving - And finally, the solution needed to demonstrate that it would save the team time on administrative-like data tasks.
Starting With RXR’s 5 Most Challenging Buildings
To kickoff the pilot, the RXR team chose 5 of their most challenging leases for Prophia to abstract. These assets ranged in complexity in a number of ways. Some documents dated back to the 1970s and were in rough shape. While another building simply contained massive amounts of unstructured data. The New York Presbyterian Hospital, alone, contained 3,902 total pages.
Prophia successfully onboarded each document in this initial trial run, demonstrating the out-of-the-box power of the AI’s capabilities and the speed at which even the most complex lease could be abstracted. And the success of this initial period ultimately led the tech team to place Prophia in front of the next set of tests.
“...if you look at a building like 1285 that you all have abstracted for us, there are only 3 tenants in the building but each of them is between 300,000 and 800,000 SF. So they’re really large, and the documentation that goes along with those leases is extensive.”
Alex Bedell, VP of Leasing at RXR
Abstracting the Next 256 Leases
The next 5 buildings contained 256 leases that, similarly, spanned decades and countless addendums and modifications. At this time, the RXR tech committee assembled a robust questionnaire in order to continue to measure Prophia’s progress through this second onboarding stage.
“... we had a pretty robust checklist, 96 questions that our tech team put together outlining elements of the control - security, infrastructure and on-going training and support. Once reviewed, we pursued a trial with one of our properties and found the product to be as advertised with minimal exceptions.”
Joe DiSalvo, SVP, Corporate Controller at RXR
At this time the leadership started to hear resounding positive feedback about Prophia as a data solution. Key leasing team members, like Brett Meisel, who interacted heavily with Prophia throughout the trial period, remarked at the speed and accuracy with which they could access key CRE terms and the original documents contained within each portfolio. SVP, Joe DiSalvo noted, “When I started getting positive feedback from Brett, one of our key users, I knew we had found something powerful.”
Within 30 days of implementation, the consensus was clear. Leasing, property management, finance, and brokerage teams all recognized Prophia’s capabilities and were eager to scale it to the rest of the commercial portfolio.
Onboarding RXR’s Commercial Portfolio
Today, RXR has transformed their office and retail portfolio into a digitized resource that, in turn, is more collaborative, accurate, and efficient. With greater accessibility to every document in their portfolio, the team was able to free up data silos that naturally occurred overtime in their decades-worth of documents.
Additionally, the improved data access made it easier to catch discrepancies and pinpoint critical data. Tasks that used to take the leasing team hours now took only minutes because Prophia’s lease abstracts always link back to the original source so CRE professionals can confidently and quickly access the data they need. This greatly shortened the turnaround time for administrative-like data tasks and allowed the team to place their focus on strategy.
It’s like a “Swiss Army Knife of functions,” RXR Leasing Analyst, Brett Meisel, remarked about the platform, “When someone from leasing asks me a question about options, instead of taking 10-15 minutes to find an answer, it takes seconds.”
For executives like Joe DiSavlo, watching team members spend more time on strategy than administrative tasks due to better data management ultimately convinced him of Prophia’s value, “Prophia quickly changed from a nice-to-have, to must-have for RXR”.
If you are curious about conducting a pilot or would like a product demo, please reach out to our sales team. We frequently run product demos tailored to the unique business needs and data challenges of prospective clients and are happy to answer any questions you may have along the way.