Proptech, the application of information technology and platform economics to the real estate industry, remains merely theoretical for the vast majority of retail owners, with less than 10% of owners using the solutions, according to a recent survey conducted with Building Engines’ customers. That’s good news for landlords and investors looking for an edge on the competition, from service vendor management, retail tenant compliance and operational efficiencies to all aspects of the property transaction cycle.

“Retail proptech is fragmented and embryonic, with a very small percentage of retail players, mainly just the big portfolio owners, using it,” says Daniel Russo, the CEO overseeing the Building Engines platform at JLLT Property Management Technology. For retail property owners who haven’t yet adopted a proptech platform, the insights from the data and organization can reduce risk in assets holistically and help teams run the building much more efficiently with less staff.

Getting the Complete Picture Through Data

A common complaint that Russo hears from retail owners is they don’t have good, detailed data about their portfolio, including building attributes and equipment maintenance records. “When investors buy a retail building, they have to do an inspection, but there’s typically no manpower to do it when it’s a portfolio of 200 buildings,” he says. 

Visibility into a property’s condition requires gathering standardized data so one can pull analytics and compare building-to-building or market-to-market, yet that’s diminished when left to individuals at the property level. 

Knowing the condition of essential equipment can also be very beneficial for capital planning on a macro-scale. Using proptech, retail owners can think bigger, across entire portfolios, while mastering the small details. From tenants to vendors and including more and more sustainability requirements, the mountain of management effort addressing dispersed tenants’ needs is best handled using proptech.

“Driving a coherent program across thousands of leases is a big undertaking that takes a lot of work,” Russo says. “You can’t do it manually with email and phone calls.”

A Necessity for Preserving Value

In net lease retail, where tenants are responsible for facility upkeep, owners can struggle to gain insights into small yet important issues such as the expert maintenance of heating and cooling systems, refrigerant levels compliance, and things like regular vent hood and grease trap cleanings. If NNN tenants fail to do maintenance, property conditions worsen and asset values suffer.

Russo notes that proptech can remind tenants programmatically of maintenance needs and schedules. Property managers not only can streamline dealing with repairmen and other vendors, they can also leverage bulk rates for the best pricing. After upload of maintenance tasks, asset managers can access reporting on what percentage of tenants have completed their compliance duties.

“After deploying our software, usually there’s zero tenant compliance because no one’s been following up on things, we find that we can jump it to 45% by the first quarter,” Russo says. “Then, after a year, it could be as high as 90% compliance across the portfolio’s tenants.”

At the portfolio level, taking steps to reduce or prevent loss looms even larger. Proptech helps staff manage a range of issues both urgent and more mundane, such as the huge amount of paperwork regarding tenant and vendor insurance. Proptech can also monitor energy usage and compliance with green building certifications. That, in turn, can support faster lease-up and higher resale values.

“Trying to do a big data project can seem impossible, like trying to boil the ocean,” Russo says. “But having a proptech platform that is deployed across the portfolio makes portfolio wide intelligence possible. If you don’t have a property management system standard across the portfolio, or if owners allow every building to make their own tech choices, trying to pull from 50 different systems to serve up valuable, portfolio-wide intelligence is impossible. And it will only get better as we add AI to the mix.”

Visit Building Engines at ICSC Las Vegas, Central Hall booth 2906F.