The need for improved efficiency has real estate companies seeking out enhancements in technology and business intelligence, according to Josh Herrenkohl, real estate investor services group leader with Ernst & Young.
In a video interview with REIT.com at REITWise 2012: NAREIT's Law, Accounting and Finance Conference in Hollywood, Fla., last month, Herrenkohl discussed some of the major trends in technology and market intelligence. He listed a number of factors impacting REITs and commercial real estate companies in these areas.
"One of them is greater focus from a regulatory perspective, which is impacting many aspects of the operations, including technology," he said. "We're seeing compression around fees to real estate companies generally throughout the industry. That's driving trends around organizations looking for greater efficiency."
Herrenkohl also said firms are witnessing stronger demand for timely market intelligence. Risk management is another important issue, according to Herrenkohl.
"What we're seeing is a greater focus, especially from an institutional investor perspective, in terms of the focus on mitigating risks in general," he said. "We're seeing all of those combined having an impact on technology and efficiency, in general."
Herrenkohl also noted that companies are seeking greater efficiencies through shared services, outsourcing and offshoring.
In terms of technological tools and channels, Herrenkohl said a number of REITs are looking to expand their presence in social media. He pointed out that social media offers a particularly strong medium for residential REITs to communicate with their customers.
"These are organizations that are able to go directly to their client base using social media," he said. "I think this is an emerging trend that we're going to see a lot more out of in the next few years."
Additionally, REITs are trying to take advantage of mobile communications devices, he said.
"Tying back with that theme of instant data on demand, we're seeing a few companies making very effective use of iPads and iPhones," Herrenkohl said. "I think we're going to see this expand broadly throughout the industry and definitely impact REITs in general."