How Digitization Is Helping CRE Investors Piece Together Deals

Repricing and rebalancing investment portfolios have become top priorities for commercial real estate investors as market uncertainty spreads nationwide. Property prices are starting to tumble and federal interest rates have ticked up, forcing investors and developers to rethink their business strategies.

Investors are piecing together how to make deals work in this market, furthering the need for the seamless digitization of business practices.

“There has never been a time more pertinent than now to automate and digitize a business as much as you can both on the property and investment management sides,” said Michael Sebastian, industry principal at AppFolio Investment Management. “It is imperative to use technological solutions as a means to help your business flow more efficiently.”

AppFolio Investment Management is a CRE software firm that offers software-as-a-service for the real estate industry, focusing on cloud-based business management solutions. By helping clients store their data in one space, AppFolio’s investment management solutions provide transparent communication between developers and investors. 

With the constant evolution of the CRE industry comes the need to keep business software up to date, Sebastian said. 

Antiquated technology can hinder the way business is executed and also poses difficulties in recruiting new hires and retaining talent. Younger generations are the most tech-savvy individuals to enter the workforce to date, making it more crucial to incorporate modern proptech solutions into daily operations.

“It is hard to hire people during what we’re calling the Great Resignation,” Sebastian said. “People are switching jobs due to increased workplace flexibility and demanding higher salaries to catch up with inflation. There has never been a greater need for automation than now because it is so hard to hire people and keep them, and that creates risk for businesses.”

Since nearly 78% of workers prefer to work from home, having the ability to seamlessly connect with each other over a sophisticated interface is invaluable.

“Our software easily allows your business data to be distributed to all team members, regardless of location,” Sebastian said. “Since we know it is hard to hire and keep talent, you need tools that will automate what they do. We provide the tools to do so for the sake of investors. Our software takes something that may take two weeks and compresses it into a day or less.”

Jeremy Terr, chief risk officer and partner at Argo Property Group in Philadelphia, said that before AppFolio investment management, important documents would often get lost in the shuffle. He said it was time-consuming for his company as well as investors.

“This software is incredibly intuitive and very malleable to meet our complex needs,” Terr said. “With AppFolio Investment Management, financials for each of our stakeholder’s investments are found easily in the investor portal, readily available for them to view at any time. From being able to see their documents to receiving regular updates, investors are getting a full picture of their portfolio.” 

AppFolio also makes safeguarding business data one of its top priorities, Sebastian said. Cybercriminals from all over the globe prey on outdated business software, waiting to breach confidential data and wreak havoc on businesses.

“The best way to secure your data is in a system that has SOC 1 and SOC 2 compliance,” he said. “These systems are designed like bank-grade security to protect your data from any kind of cyberattack. All application data is encrypted and stored in a hub that is equipped with two-factor authentication. AppFolio software systems provide a sense of relief, knowing that your company’s information is safe.”

He said that the firm’s newest software solution, AppFolio Stack, integrates its classic data interface and security features with additional tools from its network of partners. This new system encourages orderly investor communication as well as increases team productivity.

“Our software solutions, both on the property and investment management sides, have recognized that our systems need to expand faster to keep up with the demand for automation,” Sebastian said. “One way to do this is to share data with other tools that we don’t have the bandwidth to create ourselves right now. It maximizes efficiency and allows you to manage a portfolio with ease.”

This article was produced in collaboration between Studio B and AppFolio Investment Management. Bisnow news staff was not involved in the production of this content.

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