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
Smart Building DIGITAL TWINS – Demystifying the Building Visualization Technology - 3/12/2020
From design and construction to operations and maintenance, building processes can be represented by millions of data points. A Digital Twin, the contextual model of an entire smart building ecosystem, serves as a repository of data from BIM, the BAS and sensor networks associated with the building’s infrastructure. It acts as a bridge between the physical and digital world, as the dynamic replica is fed real-time data from actual operations of the physical asset. AI and machine learning integrations help to contextualize and process that data to uncover operation optimization opportunities within the virtual environment that can be applied to the real building. This webinar will demonstrate the current state of Digital Twins in the built environment and feature the most relevant, practical and successful case studies surrounding the technology.
Tom Shircliff is a co-founder and principal of Intelligent Buildings, a nationally recognized smart real estate professional services company that was started in 2004. Intelligent Buildings provides planning and implementation of next generation strategy for new buildings, existing portfolios and urban communities. Tom is a speaker and collaborator with numerous universities and national laboratories, a gubernatorial appointee for energy strategy and policy and founding Chairman of Envision Charlotte, a Clinton Global Initiative.
Matthew Lennan has been integrating IT and building system technologies for more than 30 years. He has developed and implemented computing infrastructures for global financial firms, major healthcare facilities, manufacturing, entertainment complexes and traditional smart buildings. Most recently, Matthew has been working in software development to refine the customer experience for smart buildings in Office, Retail and Residential environments. He is currently responsible for driving Innovation across Oxford Properties’ portfolio.
Marty works with CRE clients to understand their needs and challenges, and then translates that knowledge into strategies for Digital Twin solutions and, ultimately, successful projects and compelling stories. Marty has helped bring technology products to market for more than 25 years. Prior to joining Invicara, he served in marketing, product management and business development roles for a wide range of software companies and founded two consulting firms.