The commercial real estate (CRE) industry has a well-earned reputation for being slow to change. CRE professionals tend to be firm believers in the maxim of “If it ain’t broke, don’t fix it.” They think of themselves as being in the relationships business, not the technology business. And to be fair, it is scientifically proven that researching how commercial real estate property management software improves your NOI is not a better use of a sunny day than Bud Lights and margaritas on a golf course.
For a long time it was possible to ignore the disruption software has brought to so many other industries. But whether it’s the taxi industry, hotel industry, photography industry, or restaurant industry, software has become a key driver and differentiator for business success. Today that disruption has arrived for the CRE industry.
Software is now a crucial differentiator for managing building operations. Even if you have an awesome manual process for managing your building, you can’t easily prove that to someone outside the building. If you’re not using software to track and manage your operations, it’s very difficult to share information. So you can’t easily leverage the expertise of people spread across your organization. Software allows you to roll up operations across buildings and see everything together. And you’re also more vulnerable if you just use paper or spreadsheets, because you’re not necessarily backed up.
If You Don’t Like Money, Keep Ignoring CRE Software
As Forbes argues, “Using innovative technology is no longer a “bonus” or an “extra feature” that commercial real estate (CRE) companies can offer to their clients or use in their workspaces. In today’s market, sticking to software, methodologies, products and technology that have worked in the past is simply not enough. CRE companies have to be at the forefront of technology for many reasons, but the main one is this: It has become the expectation.”
Whose expectation? Tenants, vendors, and contractors all expect the convenience and productivity that software brings. People have become accustomed to software making their lives easier and more productive.
So using spreadsheets, basic data analysis, or pen and paper for work orders or building communications doesn’t cut it anymore. Especially not when you’re leaving the dollars on the table that software finds for you. Modern commercial real estate property management software leverages data to take the guesswork out of:
- Occupancy rates
- Resource utilization
- Property measurement and values
- Rent values
- Contract management
- Insurance management
- Lease management
- Vendor procurement
All of which adds up to less work to achieve the same or higher productivity—and higher NOI. For example, New York City’s Feil Organization oversees a national portfolio of over 800 leases and 24 million square feet. They used modern commercial real estate property management software to measure a three-tower office complex in New Orleans. Their software discovered someone had undermeasured the building by 90,000 square feet, unlocking an additional $11.7 million for Feil. (Read the case study.)
Problem: How Do You Make Software Programs Play Nicely With Each Other?
There are different platforms, tools, and solutions for every different part of running a commercial building and property portfolio. Whether it’s an accounting tool like Yardi, a tenant experience platform like HqO, or your building management system (BMS), there is software that will collect data, automate functions, and unlock revenue.
But you need all your software to be able to ‘talk’ to each other to get the most value out of each solution. You need the data from your building sensors to be read by your BMS. You need your BMS to integrate with your building operations platform so you can automate work orders for faulty equipment. Or generate reports for how your building’s systems are performing over time, so you can plan and budget.
Many CRE software programs either don’t integrate with others or do so poorly. Their data is essentially walled off from the outside world, so you have to build a custom integration if you want the data a program collects to be able to be used by another program.
Enter the API
API stands for application programming interface, and it’s a way of connecting computer programs. Essentially an API allows different pieces of software to ‘talk’ to each other, access data, and perform commands. For example, travel booking sites use APIs to collect flight and hotel information from providers and aggregate all that data to find you the cheapest option. And APIs don’t just find data, they allow you to act on that data. With travel sites, APIs enable you to quickly and easily determine availability and make a reservation.
Every major software corporation from Amazon to Google to LinkedIn uses open APIs to encourage outside developers to build on their platform and drive innovation.
Open APIs Make Life Easier
Without open APIs, every time you want to integrate a new piece of software with your existing software, you need to build a custom, one-off integration. But if your new software becomes obsolete or no longer fit for purpose —sucks to be you. You’re locked in. Custom software integrations are also usually poorly documented, hard to maintain, and if the people who built them leave and take their knowledge with them, you’re in trouble. But with an open API, information flows frictionlessly, and you can easily migrate to a new solution that’s more fit for purpose, insulating you from obsolescence.
Want to share data between one software application and another? Open APIs remove the need to export something, upload it, and send it to someone else, eliminating the possibility of human error. Instead you can instantly access data for analyzing metrics or running reports.
With an open API, one program can tell another program what to do based on rules you set. So for example, if one system sees a fault in a piece of building equipment, it can tell another software product to go and fix that fault.
Open APIs are Key to Realizing the Value of Commercial Real Estate Property Management Software
CRE software offers a competitive advantage right now which will be even more pronounced in tomorrow’s CRE industry. And open APIs are key to unlocking all the value of the software in your technology stack. So when choosing software partners, look for companies that have an API-first culture.
What is an API-first culture? An API is essentially an agreement for software to follow a set of rules. Companies with an API-first culture commit to having a well-documented set of rules about how to get into their platform and use it. They also commit to maintaining those rules and keeping them current.
The CRE tech landscape is growing rapidly, and you will likely want to work with many new software products. Look for companies that have open APIs to make the most of the software options available to you. Want to learn more about commercial real estate property management software? Download the Building Engines 2021 Buyer’s Guide to CRE Building Operations Technology.