Tech giving adopters a competitive advantage in real estate

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The real estate industry is turning to tech.

According to JLL, more than 80% of real estate occupiers, investors and developers responding to the company’s 2023 Global Real Estate Technology Survey said they planned to increase their real estate technology budget in the next three years.

The proliferation and evolution of property technology, the integration of AI and the availability data are helping practitioners to stand out from the competition, for now, but could eventually come to redefine who is relevant, and who is not.

At Levin Management Corp., the company is doubling down on technology by digging into data, opting in with Placer.ai,  a location analytics company and platform that studies visit trends, trade areas and demographics.

According to Melissa Sievwright, Levin’s vice president of marketing, the company had already been dabbling in the space for a couple of years, but executives wanted to stay ahead of the competition. The company’s approach is two-pronged.

“It’s not a cheap investment,” she said. “It’s a big investment, but over the last year we’ve adopted our marketing and our leasing materials and we feel that it’s been great.”

Based in Plainfield, commercial real estate services provider LMC has a diverse, retail-focused leasing and management portfolio that includes 125 properties totaling almost 16 million square feet.

When it comes to handling leasing for property owners, having current data creates a better understanding of the real foot traffic at a shopping center.

As in other industries, COVID helped to accelerate the need for and adoption of new technology. Emphasizing the disruptive impact that the pandemic had on the integrity of available information, Sievwright said that in 2020 Levin turned to Placer.ai. and that it’s given them a competitive advantage.

“Before … we were only really dealing with the census that’s done every 10 years,” she explained. Now, “We can actually know what’s going on at our centers and it gives us the real understanding.”

That dataset includes visitations, trade area, cross-shopping, how different centers rank against one another, shopping patterns, and more. And the Placer.ai platform allows users to filter by time, day of the week, and customer segments.

“It just gives us better vision,” Sievwright said. “How our tenants are doing. Are they healthy? Are they seeing a decline? Are people going there? Are they going to another center – why? It just gives us all those questions you want to know—we can now answer them. Which is really what keeps us competitive over [others].”

Now, LMC has a keener insight into what stores are resonating with shoppers or which desires need to be met in a specific community.

And, Sievwright pointed out, that can also help the sales pitch.

“Then there’s the deep dive that the agents do, behind the scenes, to really analyze: ‘Hey, I want to put this tenant in the center, let’s see how it’s doing around us,’” she said. “And they can really analyze the tenants that we choose to put in the center.”

Placer.ai aggregates location data generated by a phone via mobile app usage. Similar to how ads can target users online, the insights let LMC know which tenants they should go after.

“It’s not a guessing game anymore,” Sievwright said.

LMC is also using Placer.ai to help grow its client portfolio with new business and expansions.

“We have an in-house person that works with our clients,” Sievwright said. “It’s a service our clients get with opting into our services, that if they want to look for more properties for their portfolio, they work with our [Senior Vice President, Acquisitions/Business Development] Joe Lowry and he helps them analyze different potential properties. So, this data has been great for showing which centers are doing well and if it was a good financial purchase for them.”

AI assist

Melissa Nascimento, creative/marketing director at Larken Associates, has watched the development and integration of technology in commercial real estate during her more than 20 years in the industry and according to her, it’s changed the marketing landscape.

About 10 years ago, the Branchburg real estate building, development and management company took a proactive approach to making sure it was doing all that it could to meet potential customers. On the residential side, Larken has approximately 2,500 owned and managed units across 19 communities—with 1,500 in the pipeline.

“We really started noticing how important it was to have an optimized website and really started developing a lot of marketing materials that would be available online to our customers,” Nascimento said.

That included interactive views of property clubhouses as well as 3D, drone and virtual tours for communities that were getting ready to come online. “We started stepping away from the traditional listing services that most residential property managers use and really started focusing on tech-centered software for our website,” Nascimento continued.

Larken sees about 60% conversion from leads it gets from the web, according to Nascimento, “So, we realize how important it is to have an optimized and technology-forward website.”

The company has had a website for more than two decades, and a customer facing one that can handle online leasing, for about 10 years, according to Nascimento. That put Larken ahead of the curve when COVID hit, along with lockdowns, since it already had video footage of units and properties available online, along with the ability to initiate leasing.

“We were miles ahead of that,” Nascimento said.

Larken has also been an early adopter of AI. Nascimento said she was in search of that kind of advancement for about four years, but she couldn’t find anything that could handle what they needed.

“About a year ago, I finally said, OK, I think this is the one,” she said, adding that she believes Larken was one of the first beta testers with the vendor they were using.

According to a recent JLL report on the potential impacts of Artificial Intelligence, as property technology has evolved with a proliferation of digital solutions across the industry to help facilitate and streamline processes like selling, buying, property development and investment, the groundwork for the next stage – AI integration – has been laid. In 2022, a record $4 billion was invested into AI-powered property technology, the global real estate services company said, nearly twice the amount put up in 2021.

Since integrating its AI chatbot, Larken has seen tremendous success.

“Because it’s like having an online leasing agent 24/7 at our [web]site,” which Nascimento pointed out, is always open for business. The bot is able to provide floor plans, pricing and occupancy information as well as photos and even a community’s pet policy.

“So, someone can actually lease one of our apartments from our website without even talking to a property manager or a leasing agent and do everything online,” she said.

Since implementing the chatbot, Larken has seen an increase in customers taking advantage of the interface, “and really not wanting to have, necessarily, a personal interaction, but having an immediate customer service interaction through technology.”

Nascimento said she thinks customers are interested in immediate answers. “They want some right now, they want to understand what the leasing process is, what’s available – everything at their fingertips. And sort of leaving a message sometimes and waiting for someone to get back to them is not what they’re looking for – especially the younger generation who has sort of grown up in a technology environment; they’re used to dealing with an online transaction that isn’t necessarily between you and a person or a customer representative.”

That interactive approach coupled with the immediacy is paying off. In fact, Larken has turned off online scheduling for tours because they’ve been so successful. And with demand continuing to outweigh supply when it comes to housing, AI has helped Larken to gain a foothold.

“Us being in this space where we’re able to have people access our availability in real time and apply in real time and get their name on this unit, that puts us ahead of our competitors,” explained Jessica Heckman, Larken’s director of residential asset management. “It allows us to get these rented faster.”

Five of Larken’s latest multifamily projects – in Bordentown, Hillsborough, Readington and Lopatcong in New Jersey as well as York, Pa. – have been delivered fully leased before construction was complete — about 800 units.

“But that’s a testament to what we’re getting out there and how quickly people can react to this,” Heckman said. “Everybody’s building housing, everybody is building multifamily units—we have to differentiate ourselves and we do that by our customer service, and we do that by the access to our website and our units and our people.”

That said: If you don’t want to work with the bot, you don’t have to. Larken offers the option to ask for an actual property manager or leasing agent throughout the tech-based interaction, they’re “just not seeing that” being used.

According to Nascimento, “We’re really seeing that the bots are able to answer 95% of the questions.”

And for that remaining 5% or so of knowledge the bot doesn’t yet possess, Larken can step in and review to determine whether to add additional questions and answers to the bot queries so it can handle those requests moving forward.

Engaging employees

AI also allows Larken to fulfill the adage of working smarter, not harder.

Beyond chat bots, Larken also uses email bots – both are from Yardi – which can automatically respond to inquiries about properties. If there are more in-depth questions, a leasing agent or property manager will jump in and Heckman advised that there are also specific triggers that automatically loop in her team — like when a person’s status changes from a prospect to an applicant.

“So then, a human person is going to … lead the through the next phase of the process,” she explained—generating their lease, verifying pay stubs and IDs and getting them to sign the paperwork.

“We want to offer both,” Heckman said. “There are people that are still comfortable dealing with a live person and a real body and being able to walk into their leasing office and seeing a familiar face.”

She said there are companies that are replacing their onsite teams with AI—but Larken isn’t one of them. According to Nascimento, the tech-assist allows onsite staff to focus on other things.

“We have plenty of work that we can have leasing consultants and property managers do where they don’t necessarily say – oh, well you’re out of a job now because AI has kind of taken that over,” Heckman said.

A case study cited by JLL from EliseAI, a Spark portfolio company that offers an all-in-one AI platform for properties, found when it comes to leasing and management, more than two hours can be saved each day with artificial intelligence. That time savings is also promoted by Yardi, which, in addition to offering performance metrics to track leads, tours, applications and leases resulting from the chatbot, also allows users to see how much time it saved staff.

Nascimento said the use of AI actually allows onsite staff to be more customer service oriented, in part thanks to the time that is freed up, instead of responding to general inquiries.

“So maybe they do more events onsite, maybe they have more quality interactions with residents than consistently just trying to keep up with leads that are coming through phone calls and emails,” she explained. “It’s freeing them up to be more active in their day-to-day processes.”

In addition to attracting renters, Larken says it’s also attracting talent because “the technology that we’re using isn’t solely just for our prospects or even just for our residents. It’s on the backend of the operations, too.”

“What we have found on the recruiting front is that people want to work for companies that are tech driven—and we are one of those companies,” Heckman said. “So, we’re able to tell them that we have technology in place to make your job more streamlined, and you’re not doing all of those mundane tasks that typically come with being an onsite leasing consultant or property manager.”

ADPAT or …

“It’s not just the leasing agent and the property manager that we’re looking to make their job more streamlined. It’s everybody within the organization. If we can make their job more efficient, it’s giving us more analytics – more data – and it’s just allowing us to kind of grow as a company,” said Heckman.

As the industry’s tech revolution continues, looking ahead is key.

Sievwright said LMC’s experience using Placer.ai has been so good that the company just renewed its contract for another year.

She anticipates that in the future there will be more options to explore. For now, vendors offering the kind of data available from Placer.ai are limited; but as the field develops, Sievwright thinks more service providers will also result in more competitive pricing for such products.

Meanwhile, at Larken, where their website is currently about three years old, the process to revamp it to keep up with technological advances is beginning again, according to Nascimento.

In the future, companies that keep that tech-focused mindset as just part of doing business stand to benefit.

“I think it’s going to be like, the ones who are using it are going to be leaders in the industry,” Sievwright said. “And then the ones that aren’t are just kind of going to get dropped off eventually. Just like retail, you know?

“Don’t opt in, you get opted out.”

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