The commercial real estate (CRE) industry has seen a plethora of transformative technological advancements. One of the most impactful among these advancements is the integration of property technology, commonly known as proptech. Proptech, in essence, encompasses a wide array of digital platforms, software, and innovative technologies that are designed to enhance every facet of the real estate industry, from the operational functions to strategic decision-making. 

One of the key areas in the CRE industry where proptech is making a significant impact is vendor management, especially in the triple-net (NNN) space. Triple-net leases involve the lessee or tenant taking on the three main property-related expenses—insurance, property taxes, and maintenance costs—in addition to the base rent. Consequently, NNN leases entail intensive vendor interactions to efficiently manage these various aspects of property upkeep. 

Adopting proptech in the vendor management processes within the NNN space ushers in a new era of seamless, streamlined functionality. It revolutionizes the traditional, often complex, vendor management by enabling automation, enhancing transparency, and ensuring compliance with industry norms.  

Let’s delve deeper into the numerous benefits that this integration offers, taking a closer look at its influence on bid management as well as contract and purchase order management. 

8 stats that decode the industrial real estate landscape

8 stats that decode the industrial real estate landscape

Findings from a recent report convey eight crucial takeaways all industrial property owners and operators should know. Here are those statistics.

Vendor management challenges 

To fully appreciate the transformation proptech has brought to the vendor management processes, it’s important to understand the limitations that traditional methods represent. 

In traditional processes, bid management is time-consuming and manual, prone to human errors, and lacks transparency. Bids are evaluated based on personal judgement, possibly leading to biases, and information is typically scattered across various files and locations. Procurement timelines are occasionally missed due to lack of continuous monitoring and the archaic method of maintaining and retrieving vendor performance data can prove to be ineffective and laborious. 

Additionally, traditional contract and purchase order management often involve manual execution, prolonged turnaround times due to physical paperwork, disorganized document storage, and difficulties in monitoring compliance and managing renewals or terminations. 

Ultimately, the adoption of proptech solutions in vendor management showcases a transformative shift from labor-intensive, inefficient, and opaque processes to automated, streamlined, and transparent ones. This not only saves time and reduces costs but also bolsters decision-making capabilities and compliance, thereby providing a competitive edge in the dynamic CRE landscape. 

The top proptech CRE teams are investing in now

The top proptech CRE teams are investing in now

Technology’s role in property management has proven to be pivotal. In fact, according to a report by Building Engines, nearly every property team is investing in CRE software.

Proptech for bid management  

Automated vendor bidding systems revolutionize the procurement process by increasing transparency and efficiency while ensuring compliance with industry standards and regulations. 

Some benefits include: 

  • Facilitates unbiased vendor selection through algorithm-based evaluations, enhancing fairness and competition  
  • Decreases administrative workload by automating the bid invitation, documentation, and comparison process  
  • Improves compliance monitoring by incorporating checks directly into the bidding process  
  • Offers real-time updates and notifications, ensuring that procurement timelines are met  
  • Aids in maintaining a comprehensive database of vendor performance and cost metrics, promoting informed decision-making 

Proptech for contract management  

Digital contract and centralized agreement storage solutions ensure that all contracts are securely executed and managed, offering accessibility and organization. 

Some benefits include: 

  • Enables electronic signing of contracts, reducing the turnaround time and paper waste  
  • Facilitates better organization and retrieval of documents with centralized digital storage  
  • Enhances the visibility of contract terms, making it easier to maintain compliance and manage renewals or terminations  
  • Integrates purchase orders with work orders, thereby linking procurement directly to the task at hand, improving efficiency and traceability 
3 ways automation can streamline property management tasks

3 ways automation can streamline property management tasks

The CRE industry stands at the cusp of transformation, driven by evolving economic, environmental, and societal drivers. The year 2024 is marked by an industry rebound...

Proptech in vendor management 

Proptech significantly changes the landscape of vendor management within the CRE industry, particularly in the triple-net (NNN) space. Through automation, digitization, and innovative use of technology, proptech offers a comprehensive, efficient, and seamless approach to bid management and contract and purchase order management. 

Adopting proptech solutions spells the end of labor-intensive, time-consuming, and error-prone traditional practices, transitioning the industry toward a digital age characterized by increased transparency, efficiency, and compliance.  

CRE professionals who leverage these technologies will position themselves at the forefront of industry advancements, ready to navigate the challenges of vendor management with confidence, and prepared to capitalize on the opportunities that this digital evolution presents. 

How does your vendor management process stack up? Download “The CRE guide to advanced vendor management” to take the self-assessment.