“The Market Seen from the Street”: Technology and Real Estate Development
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Today I´ve chosen a very risky title.
And you ask, "Why?"
Because I don't know anything about technology and regarding real estate development I'm still taking the first steps and learning.
However, there is a reason to bring these two "Unknown Friends" together in the same article.
We were in 2019. It was the year when I really started to get the opportunity to Plan, Develop and Coordinate Real Estate Development Projects.
But then, what is this Real Estate Development "thing"? It´s y such a bad "thing" as we "heard" and read on the media?
Allow me to share the definition that I "found" for the activity:
"It is the art of planning, coordinating and developing all the activities and processes that enable the development of new real estate assets or the rehabilitation of existing assets, according to market needs and desired financial performance."
I know that the definition may raise some "controversy" but, that's okay. The only way to improve it, is contacting with divergent opinions.
The Real Estate Development Process can be more or less complex depending on the Asset Class, Scale, Location, Market Cycle, etc... However, the various stages that make it up are "more or less" coincident:
1) Investment Strategy Definition;
2) Procurement or Idenfication of Assets and Development of Business Plans;
3) Identification of Financing and Alternatives & Contracting;
4) Asset Acquisition;
5) Hiring Project Teams and Project Development (Architecture and Engineering)
6) Projects Licensing;
7) Hiring Marketing Teams and Development of Marketing Plan;
8) Constructions Teams Hiring and Development of the Construction Works;
9) Commercialization of the Project;
10) Post-sale follow-up;
As you can imagine, throughout these 10 steps hundreds of "Stakeholders" participate and there are thousands of interactions that result in thousands of decisions.
At the end of the day, it is an "INCORPORATIVE" Process where the Developer assumes the "CENTRAL" role, coordinating all the activities that allow the Development of the Project, also assuming all the risks and responsibilities.
In theory, it seems like a "simple thing".
In practice, small inefficiencies in coordination can easily lead to the ruin of a project.
This point made me think about how could we create synergies with our Unknown Friend Technology, in order to increase efficiency and productivity, reducing risks and losses and increasing profitability of the Projects.
I talked to several friends and other real estate professionals to understand if there was any system for managing the Real Estate Development Process. There were not many alternatives.
The BIM system (BUILDING INFORMATION MODELING) is perhaps the most capable of aggregating some of the stages, namely at the Project creation, Licensing, and Construction (and Future Maintenance) levels.
This being said, I created an objective. "I want to create a system that allows the Integration and Management of the entire Real Estate Development Process, the way I conceive or understand it."
I went to some friends connected to Technology and they warned me right away that this "thing" I wanted to do would cost Millions of Euros.
However, I remember a good conversation with Tiago Dias(https://www.linkedin.com/in/tiagorrdias/), who told me "somewhat calmly": "André that is a lot. You have to chose one phase". By the time, we were in 2020.
Later, I´ve realized what Tiago wanted to explane and I´ve discovered the phase which I would like to pick up.
I was developing the idea and thinking about. One day, in a conversation with Nuno Poço(https://www.linkedin.com/in/nunopoco/), I´ve decided to challenge him to develop a technological "thing". Until today, I don't know how he understood me but the truth is: "We have already developed the first thing".
So, what is this "thing"?
Looking coldly at the Real Estate Development Process, I understood that the Stage which I consider most important is the process that leads to the Acquisition of the Asset which will be developed. At the same time, it is perhaps the most botched and "amateur" process that exists in the entire Development Cycle. Productivity is very low, and efficiency is also short. Furthermore, I fully believe that many business opportunities are "lost" due to "miscommunication" between the parties involved.
So what did we decide to do?
1) We systematized the process according to our ideas and available resources;
2) We ran tests, fixed bugs, and realigned the development of "The Thing";
3) We have automated several steps that allow us to increase the productivity and efficiency of the interactions between the Stakeholders in this Process;
4) We ran tests, fixed bugs, and realigned the development of "The Thing";
5) We´ve created an algorithm that allows "a previous analysis" of the investment, presenting some KPI's automatically, depending on the data provided by the business partner;
6) We ran tests, fixed bugs, and realigned the development of "The Thing";
7) We work on the process of data insertion by the Partner, trying to figure out how to increase the "engagement" of the "Thing".
8) We ran tests, fixed bugs, and realigned the development of "The Thing";
9) The "Thing" already works;
10) We continue to test, fix bugs, and realign the development of "The thing".
Note that the "Thing" was developed only for the identification and analysis process of Residential Projects and and concepted to be used "Internally".
However, as always happens, we were surprised. After some tests with Business Partners, we realized that the "Thing" can help other Market Professionals with other purposes.
We were happy! From this point on, whatever happens, all the time and investment allocated was worth it.
Currently, we are in the process of validating the transformation of the System to allow its use by other professionals in the market.
I leave you a link where you can do your tests: http://bit.ly/3RPR2Vs
We appreciate any criticism you may have and we are fully available to answer any questions.
The Transformation and Improvement of the Real Estate Market depends on all of us who develop activities in it. Even if the "Perspective and Interest" of each one is different, if we don't all "sit" at the same table for the common benefit, we cannot complain about the lack of Evolution in the Sector.
I also add that I always thought that Technology and/or Technological Development was only accessible to MEGA Intelligent and/or Gifted people. However, I realized that the "Taboo" that exists regarding Technology is nothing more than a myth to make the Industry "EXPENSIVE".
I have also found that there are many similarities between "Technology Development"(Technology Promotion) and "Real Estate Development"(Real Estate Promotion).
Maybe it is time to put "REAL ESTATE and TECHNOLOGISTS" together. I am sure that the Evolution of the Industry will be exponential.