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Blog Dec 03, 2015

How to manage growing real estate data more efficiently

Over the lifetime of a real estate asset, the associated documentation becomes significantly more complex and more difficult to manage. Relying on artificial intelligence, STRABAG and LEVERTON set an example for cost-effective property management that saves time and guarantees precise real estate data records.

Constantly growing amount of contract documentation

Real estate portfolios are mainly managed on the basis of contracts – contracts that constantly change and accumulate more documentation. But not only amendments add volume to the relevant contract documentation; other relevant documentation such as handover certificates, rental invoices, index letters and communication between the landlord and tenants also has to be processed. Considering the length of an asset’s lifecycle, the core data of the underlying documentation can be vast and highly intricate, depending on the types of assets, the complexity of portfolios and the number of parties involved (e.g., asset managers, property managers, lawyers, third-party consultants and service providers).

In fact, processing the vast amount of contractual real estate data is one of the biggest challenges in property management, fundamentally contributing to the costs of the commercial property management. Consequently, there are three main factors driving the costs:

  • the quality of the existing contract data,
  • the accuracy of the existing documentation, and
  • the efficient handling of new documents and data.

Effort & cost of data management grow with
the size of a lease file

Cost analyses often incorrectly assume that the cost of human labor remains unchanged over the lifetime of a lease file. However, as the number of pages and documents for such lease file considerably rises (see chart), so does the research that employees need to undertake. Therefore, for the economically efficient management of large real estate portfolios, the targeted handling of time-intensive and quality-critical stages in data processing is critical.

© Bohm/Matthaei, Immobilien & Finanzierung, Heft 21

Artificial intelligence enables property management 4.0

The use of new, self-learning software has resulted in faster, automated data entry with better quality for entering and archiving data. In an initial project, STRABAG Property and Facility Services GmbH (STRABAG PFS) and LEVERTON GmbH are working together using artificial intelligence in property management. The computational linguistics software from LEVERTON tracks the contractual breakdown of maintenance obligations between landlords and tenants for 1,000 leases. The data is semi-automatically transferred to the customer’s internal management system.

The automation of commercial portfolio management – from document receipt to the archiving and expansion of the database – enables significant time-saving, enhances quality as well as efficiency: Property Management 4.0.

With an intelligent system, the digitization and data processing of all real estate documentation create both assets and value. The advantages are clear:

  • Full Transparency
    Full and transparent overview regardless of location; access to relevant data is available to different people within the company – fast and without restriction.
  • Completeness & Accuracy
    Supervision of the completeness and continuous improvement of the data quality. Missing documents can be uploaded and assigned to the right person within the platform.
  • Faster Review Process
    Reduced research time by automatically linking pre-set data points with the original sources and paragraphs. The software supports automatic resubmission, escalation, and deadline management including automatic reminders.
  • Better Collaboration
    The collaboration between internal teams and with external service providers is facilitated by removing geographical restrictions and external communication tools.
  • Easy Reporting
    Digitized data enables instantly available analyses, decision-making papers, risk assessments and reporting – all “at the click of a button”. Microsoft Excel exports allow for easy integration with other tools.

A lengthier version of this article was written in conjunction with Marko Bohm and published in Immobilien & Finanzierung, vol. 21, pages 13-15

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