The Fate of Construction Data: Who Will Own It?
Last week, I met with the CEO of one of the largest retail owners in the world. Our conversation centered around how he gets more leverage from having technology drive his day-to-day processes. But it’s not for the obvious reasons.
The dirty secret about owning buildings is that the cost of repositioning and construction is a black box. The time it takes for projects to get completed is a black box. Even the history of vendors with whom owners have worked can be a black box.
Why? Real estate investors do not truly own their construction data. Legally, the data belongs to them, or at least part of it, but consider the reality:
- General Contractors manage the bidding process and owners often only see the final costs. So, who really owns the pricing intelligence?
- Construction managers control timelines using their in-house software programs and owners receive general updates at weekly meetings. So, who really owns the “time to completion” statistics?
- Project and property managers (internal and external) handle communications with vendors from their email inboxes and mobile phones. So, who really owns the job performance insights?
Owners are the ultimate risk takers in any building project, but without technology that aggregates and unifies insights from across their projects, their buildings and their entire portfolio, they are operating in a black box.
And that’s precisely why the retail portfolio CEO mentioned earlier values technology: unifying his construction data allows him to generate more value from his projects. As he said, "I want to combine technology and data to drive projects to completion faster which will get my tenants in faster and increase NOI. Then I cap that NOI and I've created real value for my investors."
What would happen if all owners took steps to own their data like this CEO?
For one thing, unifying construction data would help owners know as much about pricing as contractors. They would be able to get empirical answers to questions like:
- What should the range of pricing be on a per square foot basis for lobby projects in Washington D.C. office buildings?
- How long does it typically take for a retail tenant in a shopping center in the Northeast to get from demolition to occupancy?
- How often do projects like the one I'm about to launch actually go over budget?
- How are capital budgets in my portfolio tracking against their underwriting plans?
Real estate owners who want to remain competitive need to truly own their construction data in order to drive project budgets and schedules – that in turn drive investor returns.
To learn more about this hot topic, join us for a NEW Precon Event, Construction Summit, that will be held on June 5 at The Cosmopolitan in Las Vegas. This Summit will delve deeper with specific sessions discussing: (1) bid process structure, (2) reforecasting for more robust capital plans, (3) leveraging historical data to drive down future acquisition cost, (4) timeline acceleration, (5) vendor relationships and (6) system integrations. Open to all registered conference attendees, register today!
This Week’s Sponsor
RealFoundations is a professional services firm focused on helping companies that develop, own, operate, service, occupy or invest in real estate make smarter, more profitable decisions. From the building itself to the way it’s developed, operated and capitalized, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations. We work hard, we tell the truth, and we do what we say. We Make Real Estate Run Better. www.realfoundations.net
UPCOMING REALCOMM WEBINARS
Top GLOBAL INNOVATIONS of 2019 Impacting Commercial and Corporate Real Estate - 12/12/2019
2019 will likely be another year of great innovations for the Commercial and Corporate Real Estate industry. With a multitude of new companies and ideas being funded by an insatiable appetite of investors, the traditional workflows and processes of Real Estate are challenged daily. Add to this a desire by the established marketplace to also innovate and the pressure of change increases. This webinar will bring together some of the industry’s most prolific prognosticators who will discuss and debate the state of innovation in our industry for 2019. For those firms that are leaning into the change brought about by technology this is a perfect opportunity to hear about the leading solutions, case studies and best practices.
Founder of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world's leading conferences on technology, automated business solutions, intelligent buildings and energy efficiency for the commercial and corporate real estate industry. As CEO, Jim interacts with some of the largest companies globally pertaining to some of the most advanced and progressive next generation real estate projects under development.
Jeff Chulick is the Technology and Innovation Leader for EY Real Estate Services. He leads a global team of professionals focused on the identification, innovation, design and realization of technology solutions that greatly enhance the workplace experience. His areas of focus include digital strategy, smart workplace, IoT, visual communications, workplace management, physical access and audio/visual technology. Jeff has over 20 years of enabling workplace strategies and delivering innovative solutions for EY and external clients across many different industries.
John Dulin is a 30-year global telecom and enterprise executive and has held senior positions in product management, marketing and sales in the areas of fiber optics, wireless and new technology development. Currently with Corning, John is focused on introducing its fiber optic and wireless innovations to the commercial real estate market.