Real estate will trade like shares on the stock exchange in the future
The Berlin-based PropTech, 21st Real Estate, digitalises the acquisition of investment real estate to make the process more efficient – and equips customers and their real estate for tomorrow’s “digital deal”.
The real estate market has been booming for decades and the industry is doing well. Nevertheless, it is high time for companies to act and adapt their processes. Just because the market is doing well doesn’t mean that a company’s internal processes are fit for purpose. 21st Real Estate recognised this and three years ago asked itself which processes in the real estate sector are currently the biggest “pain” and which will benefit most from digitalisation. Together, the company’s founders quickly agreed that developing an automated property valuation tool to support the complex acquisition process offered the greatest opportunities for digitalisation.
The typical acquisition process consists of many individual steps, such as preparing an offer, analysing a location, providing an initial indication, analysing cash flow and conducting due diligence. Each of these steps is time-consuming and often involves several employees, who have to manually research data and copy PDFs and Excel spreadsheets. This is prone to errors. In addition, the process is linear, meaning that each participant can only start on their specific task once the previous step in the process has been completed. This often makes the process not only protracted, but also non-transparent.
The “digital deal” as the heart of the acquisition process
Over time, many companies’ internal acquisition processes become overly complex and inefficient. Therefore, it is not only a question of digitalising individual process steps, but also of completely rethinking the processes from the ground up. Modern technologies and algorithms can support employees in many areas, helping to minimise repetitive work and avoid human error. But the approach must go deeper. For example, simply digitalising PDFs is not a solution. In a digital and smart process, there shouldn’t be any need for PDFs at all. In order to make the acquisition process more efficient, 21st Real Estate has transformed every real estate purchase into a “digital deal” that bears no resemblance to today’s standard acquisition processes. The “digital deal” dispenses with traditional linear process chains, and becomes the core of all activities. Employees and external partners can collaborate on a deal in real-time, without having to wait for other steps in the workflow to be completed. Companies can work much more efficiently, regardless of the market situation. 21st Real Estate is already preparing customers and their real estate for this “digital deal”.
The future of real estate acquisitions
The “digital deal” is cloud-based and begins with investors defining standardised property search criteria and investment KPIs, which the system then automatically matches with all suitable properties on the market. Matching properties are then automatically evaluated on the basis of location, price and cash flow potential, and the investor receives recommendations to buy or reject them. Employees can redefine investment scenarios and add information at any time, which is immediately included in the evaluations and accessible to all participants. All KPIs can be shared with banks, insurance companies and other service providers at the push of a button, who in turn can send offers directly to the investor. The due diligence is then managed via digital transaction manuals and the deal is brought to the contract stage. In the future, the actual transfer of ownership will then take place automatically, e.g. via tokenization and blockchain technologies. Ultimately, this will mean that investors will be able to trade properties digitally at the touch of a button – just like shares on the stock exchange today. 21st Real Estate is already getting its customers and their properties “digital deal ready”.
Is the digital acquisition of real estate just pie in the sky?
No! Many facets of the “digital deal” are already being used today. 21st Real Estate has not only developed automated location analysis tools, but has also digitalised property evaluations, including investment evaluations and cash flow forecasts. The company has also already integrated digital workflows and asynchronous assignment of roles into its software. Along the digital deal process chain, 21st Real Estate connects strong partners, including banks, insurers, appraisers and building contractors, at every stage in order to consistently digitalise all steps. In the future, the entire process will be controlled via a single cloud-based platform – free of media disruptions. Until then, 21st Real Estate is already helping customers prepare for the future, streamline their processes and work more efficiently today – regardless of whether companies are only just taking their first steps towards digitalisation or are already well on the way to the digital future.
Photo: Anke Illing, ILLING & VOSSBECK FOTOGRAFIE