Converting to a paperless rental office is not an option

Unless competitive advantage, reducing risk and generating value matters.

178

Multifamily remains the most fragmented industry in the United States. That is, there is no REIT, private company, nor entity that has devised a single unifying operational model that works universally for every property, in every location, serving every demographic.

Nor is there is there a national housing investment platform that, today, can exert national market influence leaving a wide open field of need and opportunity.

Is gaining financial synergy on a national scale inside the multifamily space and within the national housing market even possible? It’s a formidable challenge.

At this time, there is neither the business platform nor model positioned to attract financial investment on a national scale.

But this will change. When it does, it will certainly signal the end of business as usual in multifamily. Technology in concert with finance will be the engine that powers this inevitable change.

And the two are moving ever closer.

A union of capital markets and the next wave of technology will combine to enable what is sure to become the multifamily powerhouse player. Just as in other industries, where technology has wrought radical restructuring—retail, music, video entertainment, travel booking, newspapers, taxi cabs, vacation rentals, telecommunications and even space travel—such will be the case for housing.

Look around. The industry is already heavily stalked. When the technology clicks, it will be like a jungle cat pouncing on its prey, swift and sure.

The technology transformation that will drive this event will arrive on the scene in two forms. One is the type and construct of housing itself. The model for future housing will be substantially different in size, layout and build. It must be in order to meet the housing of future generations.

The other is how it is bought/sold, managed/rented and maintained. When asset risk can be reduced by technology, the investment risk is lower. These technology changes will attract housing investors of national significance. They’ve already begun to sniff for opportunities. You probably know who they are.

As housing ownership and management becomes digital at its core, those who have been sitting in wait but already converted, become smarter, quicker, more efficient and significantly more powerful and competitive.

When people work in businesses that are digital at the core, they lock in unique advantages. They find what they need, discover what they need to know, are empowered to take action at the right time, untethered by time or place.

The advantages are profound.

Those with a stake in multifamily cannot afford to ignore the future digitalized office

This mandate to become digital at the core is inexorable: It is driven by residents, workers, lenders, regulators, competitors, investors and the technology itself. It is these constituencies, stakeholders and powers that make the transformation to digital at the core a strategy required for those who   establish themselves as the leaders in the future of multifamily.

Need more convincing?

Consider those who have already crossed the great digital divide. They are the movers who became truly digital at the core and thus became, not only highly competitive and predatory, but also highly valued. Nike, blending technology with sports shoes and clothing. JetBlue, integrating entertainment and communication technology with air travel. DirecTV, placing advanced entertainment systems and choices in the palm of your hand. Netflix re-defining entertainment content ownership. And of course, there are the ubiquitous Facebook, FedEx, and Apple with its iTunes.

Consider the success of Samsung with smartphones and smart TVs that put a seemingly endless amount of entertainment content at your fingertips. Amazon.com that put digital shopping and shipping, and now media entertainment one click away for multi-millions of worldwide e-commerce shoppers. And the amazing UBER—making a ride, a simple click away.

These companies are capitalizing on marketplace disfunctionality and fragmentation. They have transformed digitally and at their operating core, and have gained significant returns and new marketshare for their trouble.

Are we in multifamily insulated from a future of drones, robots and the Internet of things, or potentially empowered by it?

Effective multifamily executives must embrace both the opportunity and challenge of technology. They must determine which technological investments are required for a competitive future. It can be overwhelming but it doesn’t have to be.

Ask yourself a few important questions:

  • Will advances in technology change the face of competition in multifamily?
  • What advantages are you positioned to secure in the age of big data analytics?
  • Are you comfortable yielding that advantage to competitors?
  • What will be required to meet, if not exceed, the expectations of residents, customers, business partners and investors?
  • Describe the future expectations of your shareholders?
  • Does your business plan incorporate technology as a contributor, differentiator and value creator to performance?
  • Do your technology plan and projected investment identify and align with your views on threats, opportunities and economic outlook?
  • How flexible are your IT plans in light of rapidly changing economic and regulatory conditions?

The major strategic question is:

  • With all your past investment in legacy multifamily systems, do you (and your people) know more today about your business than before? Does this knowledge enable you to run your business more effectively?

Typically, the answer to these questions is no. The future world that we face is one of unstructured data washing up everywhere.

Look around. The proliferation of bespoked systems and mash-ups has already strained legacy system thinking.

The path to success in a future de-fragmented housing industry is a technological one. So, if gaining a competitive advantage, reducing asset risk and generating value matters to your future—get on with it.

Author: Mike Radice is a member of the SyndicIT Services Technology Board and author of the Multifamily Technology Solutions blog.