Commercial Real Estate Embraces Technology–Cautiously
PHOENIX–The commercial real estate industry has been slower to adopt some cutting-edge technologies such as e-signatures and online bill-paying than the residential sector, but it is making progress, executives said at the recent MBA Commercial/Multifamily Servicing and Technology Conference.
Scott Keith, Managing Director with real estate management software firm RealINSIGHT, Irving, Texas, said commercial and residential real estate differ by their nature. “Every commercial real estate deal is a one-off deal,” he said. “Residential tends to be more of a cookie-cutter product with a payment between one person and the payment company. In commercial real estate, there might be attorneys and accountants involved and it’s a more complicated relationship.”
In addition, commercial real estate involves much higher dollar figures, “and on the residential side there are literally millions of deals while in commercial real estate, there are many fewer but much more complicated loans,” Keith said. “Some [commercial real estate] deals are hairy, not cookie-cutter, so they resist cookie-cutter automation.”
Borrowers also refinance commercial loans less frequently than homeowners. Michael Reynolds, Domain Manager for Real Estate Capital and Syndications with KeyBank Real Estate Capital, Cleveland, cited difficulties in introducing technology to a loan that closed years ago. “But with new loans we can introduce borrowers and investors to new technologies,” he said.
The “consumerization” of software is changing loan servicing for the better, Keith said. “People are demanding modern apps they can use on any device they have,” he said. “They use Netflix and Waze on their phones. Those types of things are driving business software now.”
PGIM Real Estate Finance Chief Information Officer Suzy Bashore agreed that loan servicing technology is becoming more user-centric. “It knows who you are and the last time you used the system,” she said. “If you’ve been sitting on a particular screen for too long it can ask you, ‘can I help you?'”
But servicing technology could be made even more intuitive and–yes–fun, Bashore noted. “Many people love gaming,” she said. “It should be more fun to use technology. I think we need to make technology for our users more fun. That’s my aspiration: that one day we’ll have more fun systems.”
For anyone in their 20s or early 30s, “your job is a technology job–because if it’s not they will replace you with technology because the computing power is just cheaper,” Keith said. “It’ll make your head spin. If your job is in technology, you’ll probably float along; if not there just won’t be a place because everything will be plugged in–every device you have will be hooked up giving information.”
Keith noted that being plugged into that means you will be plugged into the world, “and if you’re not plugged into the world, that’s not good,” he said. “If you’re in your 40s or 50s, the world will continue on as you know it for a while, but it will be quickly supplanted.”
