Let's Get Digital

Converting project documents to electronic files speeds up the deal-making process.

By Peter Boritz

In today’s market, commercial real estate professionals look for the most viable options to speed up the deal-making process. Those who want to quickly navigate the tight market rely on the latest technology tools to aid in closing deals. While some commercial real estate professionals prefer to depend on their fax machines and color printers, others are digitizing property data. Floor plans, lease agreements, or other project-related documents can be digitized, converted to portable document files, and stored and transmitted to numerous computers and mobile devices, helping commercial real estate professionals gain momentum with deal making, due diligence, and valuation.

Going Digital

Digital property data helps all parties in a transaction make decisions more quickly and effectively. Today, software is available that produces detailed digital summaries of accurate building data. For instance, Real Data Management’s technology uses lasers instead of tape measures to determine a building or space’s square footage. Property owners and managers can import the fieldwork measurements into a software program and analyze the data according to different standards, creating virtual floor plans that prospective buyers and sellers can use to calculate or re-calculate measurements from any location.

For example, digitizing floor dimensions fast-tracks the process of evaluating rentable area and useable space from a week to a few hours. Technicians use lasers in the actual space to calculate square footage, plugging these measurements into a software program — typically a computer-automated design application — that creates a virtual model of the building. This virtual model includes floor plans and measurements in a readable file format such as a PDF or in an interactive video such as Flash animation.

In addition, digitizing this data speeds up the design or build-out phase for property owners or tenants. Property users can view or change digital renderings, reducing the reliance on multiple vendors also involved with the building design.

Using space management software, property owners and brokers can visually manage property on mobile devices and computers for instant access to floor plans, occupancy and vacancy information, tenant contact information, lease details, and other data. The information is compiled into a digital plan book that contains all of a property’s floor plans with the corresponding tenant’s information, including lease expiration date, useable space, and rentable space. Brokers and investors can use the software’s area analysis functions and documentation features to help determine a building’s rental or investment potential.

For instance, in the recent acquisition of a 100,000-sf building in Manhattan, the buyer needed to close the deal within one week. In two days, the technology vendor was able to reconcile the square footage of the building for the buyer compared to what the seller reported. In this case, both the buyer and the seller used proprietary technology to agree on the building’s measurements, a point of contention that often is disputed.

Practical Application

While today’s institutional investors such as private equity firms and hedge funds are comfortable using the Internet to organize and view information, some small and midsize commercial real estate brokerages store data in several different locations — both in print and online. For some companies, lease documentation might reside on a desktop computer while floor plans and marketing material sit in filing cabinets.

Digitizing data stores all information in computer files, eliminating the need for paper files. And because computers handle raw data quicker than people, this gives brokers faster access to the figures needed to close deals or acquire property.

Digitization also reduces operation costs while increasing productivity. For example, a real estate owner planned on launching an aggressive leasing campaign for one of its smaller buildings also in Manhattan. The property owner used digitized data to arm its brokers with the information they needed to close their leases. The agents were able to modify floor plans and specs to potential leaseholders on the fly, getting the useable space to prospective tenants in a quick manner.

As for pricing, Real Data Management’s diligence solutions are priced on cents-per-square-foot, and its online solution, RealAccess, is priced at a monthly rate for unlimited users.

Getting Deals Done

While digitizing property data has driven the due diligence process for large deals, such as properties between 200,000 and 1 million square feet, the software is equally useful for smaller transactions. For example, Real Data Management provided due diligence as well as guidance on navigating the U.S. commercial real estate market to Renta Corp., a Barcelona-based property manager, when it acquired a 100,000-sf office property in Manhattan.

Real Data Management drove due diligence for the deal in reconciling the square footage between the buyer and seller, quickly verifying that Renta was buying the amount of space they signed on for. This was done without either side having to manually measure space or crunch numbers. All building data was digitized, including floor plans, documentation, and marketing materials, so Renta would be ready to market the prop- erty once it bought the building.

Commercial real estate professionals who digitize building data give themselves an edge over the competition. Such online data management platforms also can be integrated with customized marketing materials to achieve greater levels of productivity with everything from collateral and floor plans to legal documentation and contracts. Overall, keeping abreast of the latest tech tools can help commercial real estate professionals increase their bottom lines.

Peter Boritz is president of Real Data Management, a New York-based real estate technology and services company. Contact him at (212) 213-8190 or peter@rdm1.com.