How COVID-19 Has Accelerated Customer-Centric Digital Transformation for REITs

COVID-19 has taken its toll on the entire real estate industry, hitting the REIT sector especially hard. The issues REITs must deal with include:

• Rising property expenses 
• Increased vacancy levels 
• An expected double-digit decline in leasing activity and demand for office, hotel, and retail spaces over the next 18 months 

And that’s just the tip of the iceberg. With remote work becoming the norm, entire business models will have to be reconsidered.  

If there’s a silver lining to be found, it’s the fact that overcoming the challenges of the ongoing crisis requires taking the next step in terms of technological innovation. Everyone will need to think ahead and evolve to survive – whether they like it or not.

And while digital transformation is a costly endeavor, those who’ve avoided it thus far will be feeling the consequences of the pandemic for years to come. 

Meanwhile, the most resilient REITs have adopted technology strategically and embraced a customer-centric business model. Let’s take a look at the most important technologies they’ve used to prepare for the future – and how you can do the same. 

Real-time analytics for predicting trends 

The most innovative REITs are using analytics to predict micro- and macro trends across their portfolios. They are leveraging unprecedented amounts of data to determine when and if tenants will renew their leases and make changes to their asset holdings based on relevant variables. 

To do this, they’re leveraging tools such as Microsoft’s Power BI. A versatile tool such as Power BI allows them to drill deeper into data and see trends ahead of time. 

For example, they have the ability to drill down to each level of a property’s income statement and make comparisons over time. They can also look at variances in Cost of Sales and other metrics, as well as determine which assets are producing expected results or which region is worthy of investing in.  

The dashboards in Power BI are intuitive to use – even for those with no technical background whatsoever. They empower organizations through tailored visualizations and allow them to make effective strategic and collaborative decisions. 

We’re beginning to unlock the potential of AI and Machine Learning  

When it comes to REITs, we’re just scratching the surface of what’s possible with the capabilities of AI and machine learning.  

First and foremost, AI can be used to analyze and understand the patterns in tenant behavior to optimize their experience. For moving to a customer-centric, future-proof business model, AI offers invaluable insights that get better over time and improve as you collect more data. 

But that’s not all. AI can help REITs create automated marketing campaigns, improve decisions, operations and interactions, as well as detect trends that may have gone under the radar. 

With Microsoft Azure’s AI platform, your organization will be able to process data such as property valuation, transaction history, tenant preferences, and other information that can help you optimize your portfolio and make the right decision at the right time. 

As mentioned, the best part is that Azure’s AI platform keeps getting better as you feed it more data. This means the sooner you start embracing the AI revolution, the quicker you can expect to see more substantial returns from it.

Digital Twins are the perfect tool to plan for the future 

As technology becomes more ubiquitous, and smart buildings become the norm, REITs will (and some already do) use greater volumes of data to anticipate both customer and technological needs. 

A great way to accomplish this – as well as cut time and costs – is to create a digital twin of their physical assets.

Digital twins are essentially digital copies of real-life assets that serve as complex, powerful simulations. They provide a sandbox environment in which organizations can test new designs, analyze data more clearly, and imagine potential future scenarios. 

Digital twins allow you to analyze real-time data on how tenants are using buildings and optimize their experience. They empower you by letting you know how to optimize maintenance costs, unifying data from smart sensors, suggesting ways to cut costs, and predicting tenant needs. 

Even though this sounds abstract, it’s much closer than we think. With Azure Digital Twins, an Internet of Things (IoT) platform, you are able create a digital representation of real-world things, places, business processes, and people.  

This technology breaks down silos between intelligent environments by unifying data from previously disparate systems. It allows you to track both past and present events, simulate possibilities, and anticipate future events for those environments. 

Needless to say, such capabilities are inevitably going to produce huge returns for more proactive REITs that are preparing for the future as we speak.

Conclusion

The COVID-19 crisis has accelerated the need for a major shift in the REIT sector. Now more than ever, addressing the needs of tenants has become priority #1 for every organization in that space. 

Leading REITs are embracing disruption and moving the needle forward by innovating and integrating technology and data analytics. 

With Microsoft’s technologies such as Power BI, Azure AI, and Azure Digital Twins available now, the market is ripe for the taking for those willing to invest in next-gen technologies.  

The ROI may not be immediate, but these avenues will create huge opportunities in what has traditionally been an innovation-averse market.  

With the right partner, your organization can make huge strides forward and enter the post-COVID era by building a future-proof basis.   

Domain 6 can help you build a customer-centric business model and leverage technology to gain an advantage on the market.  Learn more about our solutions for REITs here. Feel free to contact us at sales@domain6inc.com. We’re looking forward to connecting with you!