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Investors - SEPTEMBER 25, 2018

Tech adoption by real estate industry builds momentum

by Loretta Clodfelter

The real estate industry is reaching a tipping point on its integration of technology into the business, according to Alex Robinson, CEO and co-founder of investment management software provider Juniper Square. He says real estate firms have begun adopting new technologies “at a dramatic pace.”

Case in point: Robinson says in the past 12 months Juniper Square has more than tripled its customer base, as its clients have rapidly evolved from mainly small- and mid-sized real estate firms to now include some of the largest institutional fund managers.

One of those customers is Tishman Speyer, which has just chosen Juniper Square as its investment system of record for its global real estate portfolio. Tishman Speyer’s team will use Juniper Square’s software for client management, fundraising, investment accounting and investor reporting.

“Tishman Speyer has repeatedly proved itself to be a technology leader,” says Robinson. “And that’s significant because it underscores a big theme we’re seeing in the real estate industry — that large managers of real estate have begun to see technology as a core differentiator,” Robinson explains.

“For many years, technology was seen as a four-letter word among real estate leaders — something to be consigned to the back office, with the absolute minimum investment of budget and management attention,” said Robinson. “Just in the last few years, that paradigm has been turned on its head. Real estate managers now see technology not just as a necessary evil, but as a tool that can help them win in the marketplace. What was once a backwater is now a source of competitive advantage, and firms like Tishman are leading the trend,” he adds.

In the case of investment management, a key driver of this trend has been the desire of investors to have a better understanding of and ability to manage data related to their real estate investments.

“For a long time, there’s been this desire by investors to get at the heart of their data, to get a better depth of understanding of their exposures so they can more effectively manage their portfolios,” says Robinson. But the challenge for managers has been “there was no way for a GP to comply with all of the data requests that investors place on the GPs because each investor would have a different data request. If you’re a GP with 200 investors, that’s 200 different data requests.”

He says the promise of new technology is to ease this tension between the investors who want more data and transparency, and the managers who are unable to provide it because of the operational complexity involved.

“The promise of modern software is that investors should soon be able to get the data they want, with managers actually saving time as a result,” says Robinson. “And if managers can provide investors the data they need without having to hire a 30-person team, we find they’re usually happy to share it. Everybody comes out ahead, and the focus is where it should be: on the real estate. That’s our hope for the industry.”

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