Assetsoft - Blog by Akan T. Rajah

IBM Is Retiring TRIRIGA. Your Migration to Maximo Is Mandatory - Your Platform Isn't

Sun, 31 May 2026 16:06:53 -0500

Support for TRIRIGA ends in September 2027, and new orders have already closed. The data survives the move to Maximo the disruption does not. For most real estate operators and corporate occupiers, that forced disruption is the best moment in a decade to ask a sharper question: is a purpose-built platform like Yardi a better home for your portfolio than an asset-management suite?

Jan 28, 2026

New TRIRIGA orders & SaaS sign-ups closed

Sep 30, 2027

End of support for all TRIRIGA versions

MREF 9.x

IBM's designated upgrade path, inside Maximo

For nearly two decades, IBM TRIRIGA has been a fixture in the corporate real estate world — the system of record that quietly ran the leases, spaces, capital projects, and maintenance programs of some of the largest property portfolios on the planet.

If you lead a real estate, facilities, or workplace function and you run TRIRIGA, it has likely become invisible in the way only deeply embedded software can: unremarkable until something forces you to look at it again.

Something just did. IBM has set a firm end date for TRIRIGA as a standalone product, folding its capabilities into the Maximo Application Suite under a new name.

For most organizations the first reaction is procedural — “we’ll follow the upgrade path and move on.” But treating a forced replatform as a simple version bump is the single most expensive mistake you can make right now.

This article lays out exactly what IBM announced, what the migration genuinely involves, and how to think clearly about your options before the clock runs out.

First, a Definition

What is an IWMS?

An IWMS — Integrated Workplace Management System — is enterprise software that unifies five traditionally separate real estate and facilities disciplines on a single platform and database:

Real estate & lease management — lease administration and lease accounting.
Capital projects — construction and capital planning, budgets, controls.
Facilities & maintenance — work orders, preventive maintenance, inspections.
Space & workplace management — floor plans, occupancy, desk and room booking, moves.
Energy & sustainability — consumption tracking and ESG reporting.

The value is integration: a single source of truth, so a lease event can trigger a maintenance task and a space change can flow straight into occupancy cost.

The short version

TRIRIGA isn’t dying — the brand is. The capability continues inside IBM Maximo Real Estate & Facilities.
The clock is real. Support for TRIRIGA versions ends September 30, 2027; new software orders closed January 28, 2026.
It is not a destructive data conversion. On IBM’s path your database largely carries forward.
The disruption is mandatory either way. Which is exactly why standing pat without evaluating alternatives leaves real value on the table.

What IBM actually announced

Let's separate the facts from the noise. IBM has announced the support lifecycle completion for all versions and releases of IBM TRIRIGA and the IBM TRIRIGA Application Suite, effective September 30, 2027.

Alongside that, software ordering for these programs concluded on January 28, 2026, and TRIRIGA SaaS is no longer available for new orders as of that same date.

The designated successor is IBM Maximo Real Estate & Facilities (MREF) 9.x, delivered as an application within Maximo Application Suite (MAS) 9.x.

Jan 28, 2026

New TRIRIGA orders & SaaS sign ups closed

Sep 30, 2027

End of support for all TRIRIGA versions

MREF 9.x

Upgrade path inside Maximo Application Suite

Is TRIRIGA "dead"? No — but the strategy behind it has changed

It would be inaccurate, and frankly unfair to IBM, to say TRIRIGA is being killed. Lease administration, space and portfolio management, capital project planning, and facilities operations all continue inside Maximo Real Estate & Facilities.

If anything, sitting alongside Maximo's asset-management engine opens genuinely useful adjacencies — condition-based monitoring, mobile inspections, and IoT-driven maintenance that TRIRIGA, on its own, did not natively reach.

But the center of gravity has shifted, and that matters for fit. TRIRIGA was conceived and sold as an Integrated Workplace Management System — a platform built first and foremost around corporate real estate, lease accounting, and the workplace.

Maximo's heritage is enterprise asset management for asset-intensive industries, and IBM now positions the combined portfolio under its sustainability software business.

For an organization whose core need is property and lease management, you are now a real-estate use case inside an asset-management suite, rather than the headline use case of a dedicated workplace platform.

The data survives the migration. The disruption does not — and disruption you have to pay for anyway is the cheapest re-evaluation you will ever get.

Is this a data migration or a full data conversion?

This is the question that quietly terrifies most TRIRIGA owners, and the honest answer is reassuring — with a catch. On IBM's own path, this is not a destructive, from-scratch data conversion. Maximo Real Estate & Facilities is essentially TRIRIGA re-platformed onto Maximo Application Suite rather than rebuilt.

IBM's migration guidance lets you continue using your existing TRIRIGA application database in its current location, or move it to a new database, and a dedicated User Migration Tool moves your users and licenses across — letting you review and update people records before assigning new licenses.

A connector also keeps portfolio data such as people, locations, and assets synchronized between the TRIRIGA and Maximo sides during transition.

So your lease records, your space hierarchy, your portfolio data — those carry forward. The hard part isn't the data. The hard part is everything wrapped around it:

New infrastructure. Maximo Application Suite runs on Red Hat OpenShift, and adopting MAS means standing up MAS Core and Foundation Services as a new platform layer.
A new licensing model. TRIRIGA's licensing is replaced by Maximo's role- and usage-based AppPoints, which means right-sizing your license pool becomes a genuine strategic exercise.
Customizations and integrations. If your TRIRIGA instance is heavily customized, you will need to decide what to rebuild using Maximo's native and low-code tools, and what needs a more involved integration approach.
A new interface, plus training and change management. A new platform means new admin skills, new user experiences, and the organizational work of bringing people along.

The contrast is important for your decision: staying with IBM preserves your data but still demands a real replatform project. Moving to a different system requires a full data migration and reimplementation. Once you see those two paths side by side, the gap between them narrows far more than the incumbent's gravity suggests.

What the precedent tells us about how this actually goes

TRIRIGA-to-Maximo is new enough that it has a thin track record of its own. Fortunately, it inherits a very well-documented precedent: the broader migration from classic Maximo 7.6.1 to Maximo Application Suite, which uses the same OpenShift platform and the same AppPoints licensing model that MREF now sits on top of.

The signal from that precedent is consistent — this is a substantial undertaking, not a patch.

The clearest tell comes from IBM itself: the sustained support program for legacy Maximo was structured to run for years beyond the official end-of-support date specifically to account for the difficulty and technical lift of migrating.

When a vendor builds a multi-year runway because customers cannot realistically move in time, that is a candid acknowledgment of complexity. Independent commentators in the Maximo ecosystem have been blunter still — describing the move as something that is “not a lift-and-shift”, with the heavy lifting concentrated in OpenShift infrastructure readiness, revalidating or rebuilding customizations and integrations, change management, and licensing strategy.

On timelines, system integrators that do this work typically quote roughly three to six months for a TRIRIGA-to-MREF transition under favorable conditions, with heavily customized environments often extending beyond that range.

The point is not to frighten you; it is to set honest expectations. Any project of this size deserves a deliberate decision, not a reflexive one.

The question the timing hands you: is Maximo still the right fit?

Here's the strategic core of this entire transition. The reason a forced migration is so valuable as a decision point is counterintuitive: the switching cost that normally protects an incumbent has just been removed.

In a normal year, ripping out a system of record is unthinkable — the migration cost, the integration rework, the retraining, the licensing renegotiation all act as a moat that keeps you exactly where you are, regardless of whether the platform still serves you.

But IBM has now scheduled all of that disruption for you anyway. You will be standing up new infrastructure, renegotiating to a new licensing model, rebuilding customizations, redoing integrations, and retraining users no matter which direction you choose.

The moat has been drained — and the incremental cost of evaluating, and potentially moving to, a platform genuinely built for your use case has rarely been lower.

Even IBM's own implementation partners frame the transition this way. The recurring advice across the ecosystem is to treat it as a “reset opportunity” — a moment to streamline processes, retire outdated customizations, and rethink your data strategy rather than faithfully rebuilding what you already had.

One major advisory firm opens its transition guidance by telling clients to first evaluate whether their existing deployment is delivering full value, because the transition “may be an ideal opportunity to move on from a configuration that isn't working.”

If the people paid to migrate you into Maximo are telling you to re-evaluate first, that advice is worth taking seriously.

Your three real options

Strip away the noise and you have three genuine paths. None is universally right; the correct answer depends entirely on the shape of your portfolio, the depth of your customizations, and where your operating model is heading.

Option 1 • Continuity

Follow IBM into Maximo Real Estate & Facilities

Stay within the IBM ecosystem, preserve your data and configurations, and replatform onto MAS. Best for asset-intensive organizations that already use — or want — Maximo's broader EAM, IoT, and condition-monitoring capabilities, and that have the appetite to adopt OpenShift and AppPoints. The path of least conceptual change, but not the path of least effort.

Option 2 • Modernization

Move to a purpose-built platform — for most, that's Yardi

Migrate to a platform designed around real estate and the workplace rather than asset-intensive maintenance. For corporate occupiers, that means Yardi Corom; for owners and operators, Yardi Facility Manager on the Yardi platform. MRI Software, Archibus, Planon, and Nuvolo are also credible IWMS options worth considering. This path is a full migration and reimplementation, and it's the right call for organizations that have already outgrown TRIRIGA or whose needs sit squarely in real estate and lease management rather than heavy enterprise asset management.

Option 3 • Deliberate Delay

Extend, stabilize, and decide on your terms

Use available extended-support arrangements to buy a defined window — not to avoid the decision, but to run a disciplined evaluation rather than a rushed one. Sensible when your renewal timing, internal capacity, or a parallel transformation program means a forced sprint would produce a worse outcome than a planned move twelve months later.

Why so many TRIRIGA users land on Yardi

When the migration is forced anyway, the natural question is “which platform was actually built for what we do?” For real estate operators and corporate occupiers, the answer is frequently Yardi — not as a like-for-like clone of TRIRIGA, but as a connected, cloud-native platform where centers of gravity in real estate, leasing, and facilities gathering matter.

Importantly, Yardi is delivered as a fully hosted SaaS solution, so there is no Red Hat OpenShift estate to stand up and no AppPoints model to right-size. Yardi paths naturally across the two buyer types TRIRIGA always served:

For corporate occupiers & tenants

Yardi Corom

The direct occupier analog to TRIRIGA

Centralized lease management with critical-date tracking
Lease accounting compliance for FASB ASC 842, IFRS 16 and GASB 87
Occupancy tracking and flexible desk booking
Transaction management and broker collaboration
Facility maintenance and construction management
100% cloud SaaS — deploy as a single stack or by module

Explore Yardi Corom →

For owners & operators

Yardi Facility Manager

Maintenance & CMMS on the Yardi platform

Automated work-order assignment, tracking and completion
Planned and preventive maintenance with code-compliance checks
Inspections — manual, regulatory and due-diligence
Mobile app for technicians with offline support
Auto-posts purchase orders, payables and charges to your ledger
Connected to CommercialCafe tenant portal and VendorCafe

Explore Yardi Facility Manager →

The deciding advantage for most real estate organizations is that these aren’t bolt-ons. They sit on the same Yardi platform as your property accounting, management, charge posts straight to the general ledger, leases event flows into occupancy cost, and a tenant request raised in CommercialCafe lands in Facility Manager — the integration that an IWMS promises, delivered natively rather than stitched together.

TRIRIGA / IWMS capability	Where it fits in Yardi
Lease management & lease accounting	Yardi Corom — occupier leases and lease accounting
Facilities & maintenance / work orders	Yardi Facility Manager — functions as a CMMS
Space, occupancy & workplace management	Corom occupancy & desk hoteling; Floorplan Manager
Capital projects & construction	Yardi Construction Manager
Energy & sustainability / ESG reporting	Yardi Energy Suite & sustainability reporting
Portfolio data & property accounting	Yardi Voyager — the connected core ledger
Tenant & vendor engagement	CommercialCafe and VendorCafe

Which configuration is right depends on whether you sit on the occupier or owner side of the table — and that is exactly the kind of distinction a structured evaluation needs to settle.

Yardi will be the strongest fit for many TRIRIGA users; it will not be the answer for every one, particularly where genuine asset-intensive organizations that lean on Maximo’s industrial maintenance depth. The goal is to choose deliberately, with the mapping above as a starting point rather than a foregone conclusion.

How to run a disciplined evaluation — before you commit

Whatever you choose, the failure mode is the same: choosing a path before you understand where you actually stand today. A credible evaluation doesn’t start with product demos. It starts with an honest inventory of your current reality — and then weighs your options against criteria you set, not the ones a single vendor happens to win on.

1. Map what you really have

Document your modules in active use, the depth and necessity of your customizations, every integration TRIRIGA touches, your data quality, and — critically — which capabilities are load-bearing for the business versus which are legacy habits no one has questioned in years.

2. Define your future-state requirements

Separate what your portfolio needs in the next five years from what your current configuration happens to do. Lease accounting compliance, occupancy and workplace optimization, capital project depth, asset and maintenance intensity, sustainability reporting, mobility — weight them by your strategy, not by feature checklists.

3. Score every option, including staying

Run Maximo, the leading alternatives, and the delay scenario through the same weighted scorecard, including total cost of ownership over a realistic horizon, migration risk, and time-to-value. The discipline of scoring the incumbent on equal footing is what turns a reflex into a decision.

Where Assetsoft fits — and where we're transparent with you

This is the work we do every day. Assetsoft is a multi-platform PropTech consultancy that has been helping real estate owners, occupiers, and operators select, implement, and integrate property and facilities technology since 2012, across North America, the UK, the Middle East, and Asia-Pacific.

We run structured, criteria-based platform evaluations and execute the migrations and integrations that follow.

We will also be straight with you about something most firms gloss over. Assetsoft is a certified implementation partner across several of the platforms you might evaluate — we are a Yardi ICN member and Virtuoso Qualified, MRI Certified, a Procore Partner, UiPath Certified + Fast Track Agent, and a SAP Concur Partner.

That breadth is exactly why we can run a genuinely useful comparison: we have done the migration mechanics on multiple sides of this market, not just sold one product. But because we implement several of the platforms in the field, a disciplined evaluation engagement is structured around your weighted criteria and your data — so the recommendation is defensible whether it lands on "stay on Maximo," "move to Yardi," "move to MRI," or "extend and decide later."

If the honest answer for your portfolio is to follow IBM into Maximo, we will tell you so. The one thing we'd urge you not to do is let the September 2027 clock make the decision for you by default. A forced migration is a rare, paid-for opportunity to get this right. Use it deliberately.

Common Questions

Questions TRIRIGA owners actually search

An IWMS unifies real estate and lease management, capital projects, facilities and maintenance, space and workplace management, and energy and sustainability on a single platform and database. The integration is the point: one source of truth across functions that are usually run in separate systems. IBM TRIRIGA is one of the original flagship IWMS platforms.

IBM is retiring the TRIRIGA brand and standalone product, not the underlying capability. Lease administration, space and portfolio management, capital planning, and facilities operations all continue inside IBM Maximo Real Estate & Facilities, an application within the Maximo Application Suite.

IBM has set the support lifecycle completion for all TRIRIGA and TRIRIGA Application Suite versions at September 30, 2027. New software ordering closed on January 28, 2026, and TRIRIGA SaaS is no longer available for new orders as of that date, though existing SaaS subscriptions remain active for their term.

On IBM's own upgrade path, no. Maximo Real Estate & Facilities is TRIRIGA re-platformed onto Maximo, and your existing application database can stay in place or be moved, with a User Migration Tool handling users and licenses. The effort and risk sit in new infrastructure, the AppPoints licensing model, and rebuilding customizations and integrations — not in the data itself.

Beyond following IBM into Maximo, organizations commonly evaluate Yardi and MRI Software — particularly strong for lease-led and occupier or owner portfolios — along with established IWMS platforms such as Archibus, Planon, and Nuvolo. Moving to any of these requires a full data migration and reimplementation, which makes the most sense for organizations already considering a change.

For many real estate operators and corporate occupiers, yes. Occupiers typically map to Yardi Corom — lease management, lease accounting (ASC 842 / IFRS 16 / GASB 87), occupancy tracking, desk hoteling, and facility maintenance. Owners and operators map to Yardi Facility Manager — work orders, preventive maintenance, and inspections — connected natively to Yardi Voyager property accounting, so maintenance charges post straight to the ledger. Yardi is delivered as cloud SaaS, so there's no OpenShift estate to stand up. The exception is genuinely asset-intensive organizations that depend on Maximo's industrial maintenance depth, which may be better served staying with IBM.

System integrators estimate roughly three to six months for a TRIRIGA-to-MREF transition under favorable conditions. The closely related Maximo 7.6 to Maximo Application Suite migration has historically run longer and carried meaningful budget and complexity, largely due to OpenShift infrastructure, licensing changes, and customization rework. A clear current-state assessment is the single biggest lever on both timeline and risk.

Staying is a legitimate choice — especially for asset-intensive organizations that benefit from Maximo's wider capabilities. But "safe" is the wrong frame, because the migration effort is mandatory regardless of direction. The disciplined move is to evaluate Maximo against purpose-built alternatives on equal footing, then decide. Defaulting to the incumbent without that comparison is the option most likely to leave value unrealized.

Akan T. Rajah is Founder & Managing Partner of Assetsoft, a multi-platform PropTech consultancy headquartered in Markham, Ontario, with delivery teams across Canada, India, Sri Lanka, and the United States. He has spent 25+ years helping real estate owners, occupiers, and operators select, implement, and integrate property and facilities technology.

Yardi ICN Member + Virtuoso Qualified

MRI Certified

Procore Partner

UiPath Certified + Fast Track Agent

SAP Concur Partner

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Virtual and Augmented Reality (VR/AR) in Real Estate

Fri, 26 Jul 2024 05:49:06 -0500

Virtual Reality (VR) and Augmented Reality (AR) are both technologies that enhance our perception of the world in unique ways:

1. Virtual Reality (VR):

Virtual Reality (VR) is a technology that creates a simulated experience, immersing users in an entirely virtual environment generated by a computer. Users wear a headset that completely blocks out the natural world and replaces it with a virtual setting they can interact with. VR finds applications in various fields, including gaming, entertainment, training simulations for military and medical purposes, virtual property tours, and virtual meetings.

2. Augmented Reality (AR):

Augmented Reality (AR) overlays digital information in the real world, integrating it with the user's environment in real time. Typically experienced through smartphones, tablets, or AR glasses, AR superimposes digital content onto the real-world view. AR is utilized in various applications, including mobile apps like Pokémon Go, navigation, advertising, industrial maintenance and repair, and education.

Key Differences:

Immersion: VR fully immerses the user in a virtual environment, while AR overlays digital information onto the real world without blocking it.

Devices: VR usually requires a dedicated headset, while AR can be experienced through smartphones, tablets, or AR glasses.

Use Cases: VR is often used to create virtual environments and simulations, whereas AR enhances real-world experiences with additional information.

VR and AR are rapidly evolving technologies that hold the potential to revolutionize the real estate industry. From entertainment and gaming to education, healthcare, and beyond, these technologies are set to transform how we perceive and interact with the world.

VR and AR in Real Estate

Virtual Reality (VR) and Augmented Reality (AR) offer several valuable applications for the real estate industry, enhancing both the buying and selling processes:

1. Virtual Tours:

- VR: Potential buyers can take virtual tours of properties from anywhere in the world. VR headsets allow them to experience a property as if they were physically there, exploring rooms and spaces in detail.

- AR: AR can enhance physical property tours by overlaying information such as property details, historical data, or potential renovations directly onto the real-world view through a smartphone or AR glasses.

2. Remote Viewing and Decision Making:

- VR: Buyers can make decisions without physically visiting properties, saving time and travel costs. They can view multiple properties in a short amount of time and get a realistic sense of space and layout.

- AR: AR can provide additional information about properties when viewing them in person, such as property history, nearby amenities, or even potential furniture placement.

3. Design and Renovation Visualization:

- VR Architects, designers, and potential buyers can use VR to visualize renovations or different interior designs before making any physical changes. This can help in decision-making and planning.

- AR can overlay potential renovations or interior design changes onto a property's current view, allowing buyers to see a space's potential without physically altering it.

4. Marketing and Advertising:

- VR: VR tours can be a powerful marketing tool, attracting potential buyers who cannot visit properties in person or prefer immersive experiences.

- AR: AR can be used in advertisements and property listings to provide interactive elements, such as clickable links for more information, 3D models of properties, or virtual furniture staging.

5. Training and Education:

- VR: Real estate agents and brokers can use VR for training, providing simulated property tours and scenarios to enhance their skills in showcasing properties to clients.

-AR: AR can provide on-the-spot training by overlaying tips or information directly onto a property's real-world view during a tour or inspection.

VR and AR technologies offer significant advantages in the real estate industry. They improve property visibility, facilitate remote decision-making, enhance marketing efforts, and enable better space planning and visualization. Buyers and sellers can enjoy more immersive and informative experiences by adopting these technologies and making informed property decisions.

Examples of VR and AR in Real Estate

1. Virtual Property Tours:Real estate agents and companies use VR to create virtual property tours. Prospective buyers can view properties remotely through VR headsets, computers, or smartphones. This allows potential buyers to explore a property in detail without physically visiting it, saving time and resources.

2. Virtual Staging:VR is used for the virtual staging of homes and apartments. Instead of physically staging a property with furniture and decor, virtual staging involves adding furniture and decorations digitally to photos or VR environments. This helps buyers visualize a space's potential.

3. Architectural Visualization: VR is employed in architectural visualization to showcase designs to clients and stakeholders. Architects and developers use VR to create immersive walkthroughs of buildings and developments, allowing clients to experience spaces before they are built.

4. AR for Property Visualization: AR is used in real estate apps to overlay property information and details onto a live view of the surroundings through a smartphone or AR headset. This could include information about properties for sale or rent, nearby amenities, or historical data about a neighborhood.

5. Remote Collaboration: VR and AR facilitate remote collaboration among real estate professionals, architects, designers, and clients. They can meet virtually within a VR environment to discuss designs and walkthroughs and make real-time decisions, regardless of geographical location.

6. Marketing and Sales:VR and AR are potent tools for real estate marketing. Companies create immersive VR experiences or AR apps to showcase properties to potential buyers more engagingly and interactively than traditional methods.

Yardi's Initiatives in VR and AR

Yardi, a leading real estate management software provider, is at the forefront of incorporating VR and AR into real estate solutions. Yardi has developed innovative tools and platforms that leverage these technologies to enhance property management and marketing. One notable initiative is Yardi's eLearning platform, which includes VR training content. This VR training offers immersive learning experiences for property management professionals, helping them develop skills more engagingly and effectively.

MRI Software and OnLocation

MRI Software's OnLocation product utilizes VR and AR to improve visitor management and security. By integrating these technologies, OnLocation can increase footfall traffic and streamline the visitor experience. VR can be used for virtual site tours and safety training, while AR can provide real-time information overlays for visitors, improving navigation and access control.

ZOHO's Use of AR

Zoho, a global software company, uses AR technology to enhance facility management and maintenance processes. Zoho Assist offers AR remote assistance, providing technicians with visual guidance and support for repairs and maintenance tasks. This technology can benefit facility managers who must troubleshoot issues remotely and ensure efficient and effective problem resolution.

In summary, VR and AR are revolutionizing the real estate industry by providing immersive and interactive experiences that enhance property viewing, design visualization, marketing, and training. Companies like Yardi, MRI Software, and Zoho are leading the way in integrating these technologies to offer innovative solutions that improve efficiency and customer engagement.

We at Assetsoft

If you need help evaluating or implementing these technologies for your business, contact us at Assetsoft. We specialize in providing cutting-edge solutions and expertise to help you leverage Virtual and Augmented Reality (VR/AR) to transform your real estate operations and stay ahead in a competitive market.

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Growing Adoption of Artificial Intelligence in Real Estate

Thu, 25 Jul 2024 06:20:55 -0500

The real estate industry is transforming significantly thanks to the increasing adoption of Artificial Intelligence (AI). AI is not just a buzzword but a powerful tool that revolutionizes the industry by providing innovative solutions to traditional challenges and enhancing efficiencies across various facets. Let's delve into the tangible benefits of AI in real estate:

1. Property Valuation

· Automated Valuation Models (AVMs): AI algorithms analyze numerous data points, including location, property size, market trends, and historical prices, to provide accurate property valuations.

Example: Zillow’s Zestimate uses AI to offer property value estimates based on diverse data points such as location, size, and recent sales in the area.

· Predictive Analytics: AI forecasts property values and market trends, assisting investors in making informed decisions.

Example: House Canary uses predictive analytics to predict future property values and market trends, aiding investors in decision-making.

2. Customer Experience

· Chatbots and Virtual Assistants: AI-powered chatbots handle customer inquiries, schedule viewings, and provide property information 24/7, ensuring a seamless and convenient customer experience.

Example: Keller Williams employs AI-powered chatbots to manage customer inquiries, schedule property viewings, and provide property information 24/7.

· Personalized Recommendations: AI analyzes user preferences and browsing behavior to suggest properties that match their needs, providing a personalized and tailored experience.

Example: Redfin uses AI to analyze user preferences and browsing behavior, recommending properties that align with the user's requirements.

3. Property Management

· Smart Home Technologies:AI integrates with IoT devices to manage lighting, heating, security, and other aspects of property management.

Example: Google Nest integrates AI with IoT devices to manage various aspects of smart home functionality.

· Predictive Maintenance: AI predicts when maintenance is needed, reducing downtime and repair costs and ensuring a proactive approach to property management.

Example: BuildingIQ uses AI to predict maintenance needs for building systems, minimizing downtime and repair expenses.

· Tenant Screening: AI screens potential tenants by analyzing credit scores, rental history, and other relevant data, ensuring reliable and suitable tenants.

Example: RentSpree uses AI to screen potential tenants and analyze credit scores and rental histories.

· Lease Management: AI tools help manage lease agreements, track lease expirations, and automate renewals.

Example: AppFolio offers AI tools to track lease expirations, manage agreements, and automate renewals.

· Energy Management: AI systems optimize energy usage in buildings, reducing costs and improving sustainability.

Example: Verdigris Technologies employs AI to optimize energy usage in commercial buildings, cutting costs and enhancing sustainability.

· Complaint Resolution: AI-driven platforms streamline and prioritize maintenance requests and complaints, ensuring timely and efficient resolution.

Example: Platforms likeHappyCo streamline and prioritize maintenance requests and complaints using AI.

4. Marketing and Sales

· Targeted Marketing: AI algorithms analyze demographics, social media activity, and online behavior to create targeted marketing campaigns.

Example:Compass uses AI to analyze various data points to create effective targeted marketing campaigns.

· Virtual Tours and Augmented Reality (AR): AI enhances virtual tours and AR experiences, allowing potential buyers to explore properties remotely.

Example: Matterport provides AI-enhanced virtual tours and AR experiences for remote property exploration.

5. Risk Assessment

· Credit Scoring: AI assesses the creditworthiness of potential buyers or tenants by analyzing financial data, employment history, and other factors.

Example: Experian’s AI tools evaluate the creditworthiness of potential buyers or tenants by analyzing comprehensive financial data.

· Fraud Detection: AI systems detect unusual patterns and potential fraud in real estate transactions.

Example: CoreLogic’s AI systems identify unusual patterns and potential fraud in real estate dealings.

6. Investment Analysis

· Portfolio Management: AI assists investors in managing and optimizing their real estate portfolios by analyzing market trends, property performance, and economic indicators.

Example:Roofstock uses AI to help investors manage their portfolios, providing insights into market trends and property performance.

· Market Analysis: AI tools offer insights into market conditions, helping investors identify lucrative opportunities.

Example: Reonomy provides A I tools that deliver detailed market insights, aiding investors in spotting profitable opportunities.

7. Construction and Development

· Project Management: AI streamlines project management by predicting timelines, managing resources, and identifying potential issues before they arise.

Example:ALICE Technologies uses AI to predict project timelines, manage resources, and identify issues pre-emptively.

· Design Optimization: AI aids in designing buildings by optimizing layouts, energy efficiency, and material usage.

Example: Spacemaker AI helps design buildings with optimized layouts and energy efficiency.

8. Yardi Virtuoso

Yardi leverages AI to enhance various aspects of real estate management:

· Assistant: AI-powered agents integrated into Yardi products for task tracking and enhanced work experience.

· Chatbots: Yardi Chat IQ uses generative AI for natural language interactions with prospects and residents.

· Smart AP: Automates invoice processing to reduce time and costs.

· Smart Lease: Automates lease abstraction for complex documents.

9. AI Adoption by MRI Software

MRI Software offers several AI-powered tools designed to enhance various aspects of real estate and property management:

· MRI Lease Intelligence:This AI-powered solution simplifies the lease abstraction by utilizing machine learning and optical character recognition (OCR). It automates the extraction of critical data points such as dates, financial terms, and clauses from leases, making it faster and more accurate than manual processes. This tool helps organize and structure data, provide real-time updates, and generate predictive analytics to enhance decision-making and reduce human error.

· MRI Contract Intelligence: This AI-driven tool focuses on contract management. It automates the data extraction and review processes for various contracts, including real estate leases, asset leases, telecom contracts, and loan agreements. By leveraging AI and OCR, it converts contracts into machine-readable text, extracts critical data, and integrates this data with other systems like ERP or BI tools. This helps reduce manual effort, ensure data accuracy, and uncover hidden insights within contracts.

· AI-Powered Lease Abstraction:MRI Software uses AI to improve lease administration by enhancing data collection, storage, and validation processes. This tool consolidates lease data into a centralized platform, improving data validity and integrity, which are crucial for making informed business decisions.

10. UiPath RPA and AI in Real Estate

Robotic Process Automation (RPA) and Artificial Intelligence (AI) are revolutionizing various industries, including real estate. UiPath, a leader in RPA, offers AI-enhanced RPA solutions that automate repetitive tasks, integrate complex workflows, and improve overall efficiency in real estate operations.

· Lease Management: UiPath's RPA bots can automate the extraction and processing of lease agreements, integrating with AI tools to understand and classify lease data. This speeds up lease abstraction, reduces errors, and ensures timely renewals and compliance.

· Tenant Screening: AI-powered RPA can handle tenant applications, screening them by analyzing credit scores, rental histories, and other data points. This process ensures reliable tenant selection while significantly reducing the manual workload.

· Property Management: UiPath RPA can automate property management tasks such as maintenance scheduling, rent collection, and responding to tenant inquiries. AI integrations further enhance these processes by predicting maintenance needs and optimizing resource allocation.

· Market Analysis and Property Valuation:RPA bots can gather and process large volumes of market data, leveraging AI to provide insights into property values and market trends. This helps investors make informed decisions quickly and accurately.

· Compliance and Reporting: UiPath RPA ensures that all transactions and operations comply with regulatory requirements by automatically generating and filing necessary reports. AI capabilities enhance this by analyzing patterns and proactively detecting potential compliance issues.

By integrating RPA with AI, UiPath transforms real estate processes, driving efficiency, reducing costs, and enabling real estate professionals to focus on strategic decision-making. The synergy of RPA and AI in real estate optimizes current operations and sets the foundation for future innovations.

11. Procore Software and Its Use of AI

Procore, a leading construction management software, leverages Artificial Intelligence (AI) to enhance various aspects of construction project management. By integrating AI, Procore aims to streamline workflows, improve safety, and boost productivity on construction sites.

· Predictive Analytics:Procore uses AI to analyze historical project data and predict potential risks and delays. This enables project managers to proactively address issues before they escalate, ensuring projects stay on schedule and within budget.

· Automated Document Management:AI-powered tools within Procore can automatically categorize and organize documents, making retrieving and managing critical project information easier. This reduces the time spent on manual data entry and minimizes the risk of errors.

· Safety Monitoring:AI in Procore enhances safety by analyzing data from job sites to identify patterns that could indicate potential hazards. This real-time analysis helps implement preventive measures, thereby reducing the incidence of accidents and injuries.

· Image Recognition:Procore employs AI-driven image recognition to monitor progress on construction sites. AI can detect construction elements by analyzing photos and videos, tracking progress, and ensuring work aligns with project plans.

Natural Language Processing (NLP):Procore uses NLP to extract actionable insights from unstructured data such as emails, reports, and meeting notes. This helps improve communication and decision-making by providing relevant information quickly.

Challenges and Considerations

· Data Privacy: Ensuring the privacy and security of sensitive data is crucial as AI systems handle large volumes of personal information.

Example: Companies like RealPage implement robust security measures to protect personal data.

· Regulation Compliance: Navigating the regulatory landscape and ensuring compliance with local and national laws is essential.

Example: AI tools in tenant screening must comply with Fair Housing Laws.

· Ethical Concerns: Addressing biases in AI algorithms and ensuring fair treatment for all users are significant concerns.

Example: Companies like Zillow continuously monitor and improve their AI models to ensure fair treatment for all users.

These tools collectively help automate tedious tasks, reduce errors, and provide actionable insights, thereby streamlining the management of leases and contracts for real estate professionals.

Partnering with Assetsoft

At Assetsoft, we understand the transformative power of AI in the real estate sector. We can help you find the right AI tools tailored to your needs, whether for lease abstraction, contract management, property valuation, or any other real estate function. Additionally, we specialize in creating custom AI models to address unique challenges and opportunities in your business. For more details on how we can assist you in leveraging AI for your real estate operations, please get in touch with us.

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The Many Faces of AI: From Its Founders to Today's Fears

Wed, 24 Jul 2024 15:38:02 -0500

Artificial Intelligence (AI) has many fathers, from John McCarthy, who coined the term "Artificial Intelligence," to Alan Turing, whose work laid the foundation for modern computing and AI. Recently, I had the opportunity to listen to Geoffrey Hinton who is one of the current godfathers of AI, a Nobel Prize-winning Canadian, at the Collision conference in Toronto. His insights into the challenges and fears surrounding AI were both eye-opening and thought-provoking.

In a live interview, he discussed the various fears associated with AI. Here are some key points from that conversation:

Surveillance and Authoritarianism

One of the primary concerns is that AI could bolster surveillance capabilities, such as facial recognition and predictive policing, helping authoritarian states maintain power. The potential for AI to be used in weapons or create fake videos to corrupt elections is also alarming. These advancements could widen the gap between the rich and the poor as the job market evolves and cybercrime increases.

Bioterrorism and the Alignment Problem

The speaker highlighted the dangers of bioterrorism and the 'alignment problem' – ensuring that AI systems act in ways that align with human intentions. In simpler terms, this means ensuring that AI does what we want it to and doesn't go rogue and take over, a scenario often depicted in dystopian fiction.

Political Challenges

The interviewee expressed doubts about the capability of current political leaders to address these issues effectively. In the U.S., political paralysis, often due to partisan gridlock and lobbying influence, hinders progress, and even in other countries, regulations usually exclude military applications of AI, leaving significant gaps in oversight.

Global Legislation and Military Exemptions

European legislation attempts to regulate AI but often includes clauses exempting military uses. This inconsistency poses a challenge for comprehensive governance. The speaker emphasized the need for comprehensive governance, likening the potential misuse of AI to the historical example of chemical weapons. This suggests that the proper regulations can mitigate AI's potential for harm.

Alignment and Human Values

The alignment problem is further complicated by differing human values across cultures. AI could exacerbate these differences, creating systems that act acceptable to some but disgusting to others. The interviewee noted that humanity's inability to align on shared values poses a significant risk when integrating brilliant AI systems into society.

Control and understanding of AI

Controlling AI is challenging because our understanding of it is still in infancy. The speaker drew an analogy to a physicist's knowledge of a falling leaf—we can describe the general principles, but predicting specific outcomes remains elusive.

Existential Threats and Corporate Responsibility

The existential threat posed by AI requires significant investment in safety measures, which may only be achieved through government intervention. Companies need to be compelled to prioritize safety over profits.

Fake Videos and Election Integrity

The rise of fake videos poses a threat to election integrity. The speaker suggested an inoculation approach, where the public is exposed to fake videos clearly labeled as such to build resistance to misinformation.

Benefits of AI

Despite the numerous challenges, the speaker emphasized that AI also holds great potential for positive impact. For example, AI could revolutionize diagnostics in healthcare, potentially saving thousands of lives annually by providing more accurate and comprehensive assessments than human doctors alone. This potential for positive change should inspire hope and optimism in the face of AI's challenges.

In conclusion, the conversation at Collision highlighted both the fears and the promise of AI. As we navigate this new frontier, addressing the risks while harnessing the benefits is crucial. This urgency should underscore the importance of ensuring that AI serves humanity's best interests.

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How Can A $15 Minimum Wage In The US Change Commercial Real Estate?

Tue, 21 Nov 2023 08:20:11 -0500

You don't need introductions to the $15 minimum wage proposal by President Biden. The subject has been a hot topic for debate among experts, both defending and attacking it.

Supporters claim it’ll help fight poverty and create better living standards for everyone. Others say it’ll make countless businesses close and crumble the economy. Who’s right? What does it mean for real estate?

Today, we'll go over the most important implications from this news and how every observation could affect commercial real estate.

Going back to the theory

Ontario’s Ministry of Labour, Training and Skills Development has an excellent article explaining minimum wages’ impacts on the economy. Elevating minimum wages above the market average reduces labor demand from firms.

That comes from the increase in costs for maintaining low-wage employees. In essence, this means that businesses will look to reduce costs with lay-offs and other areas.

How can companies offset these cost increases?

The most important observation from the article is that many companies absorb these expenses without firing employees. That often means reducing expenses, like training, fringe benefits, and more.

With remote work and eCommerce becoming more popular, office and retail space could become the expense mentioned above. Increasing product prices is another common strategy, which could reduce footfall.

Minimum wages and low-wage worker employment

The article suggests that a 10% increase could result in up to 3% employment reduction, particularly for younger workers. While in Canada, history seems to prove this idea, the US is a lot more debatable.

With no natural consequence in low-wage employment, consequences might vary for CRE. However, employees like janitors and gardeners will undoubtedly become more expensive.

Hours worked and wage/income distribution

Firstly, reducing working hours is another way to offset wage costs increases without firing employees. Wage distribution often increases more significant wages, and income distribution usually stabilizes, reducing inequality.

For commercial landlords, this could mean two things. Firstly, the need for full-time commercial space could decline. However, income equality could increase footfall for businesses not relying on minimum wage work.

Poverty

According to the article, the link between minimum wages and poverty is relatively weak. That's because most poor households lack employed workers, and others already work for more than minimum wage.

Most minimum-wage workers are young people or members of multi-earner families. Therefore, minimum wage positions are rarely the primary income stream. The study suggests that only 12.5% of minimum wage employees in 2011 were from poor households.

Training

Finally, multiple jobs offer a minimum wage in exchange for additional training as part of the job. This training could experience reductions or increases depending on the position. Naturally, more critical positions yield better returns despite the increased salary.

The evidence seems to point towards a minimal negative effect over on-the-job training. Therefore, services like software implementation become more valuable if training and support are included.

What do labor economics experts have to say?

This article from The Heritage Foundation on the history and effects of the minimum wage also offers excellent insight. It also mentions that long-term consequences stem from low-wage positions being learning-centered jobs.

The majority of minimum wage employees receive raises within a year. Reducing the supply of these positions removes the first step for many people's careers.

Where does the minimum wage go?

Most people believe minimum wages go to struggling families who can't make ends meet. Most minimum-wage workers (of the 2.9% of minimum earners) are still in school. Most adults earning minimum wage do so via part-time jobs or not as the only income stream.

For CRE, this means that—at most—the benefit will be increased clientele for tenant businesses.

Wages and positions: the actual function?

Most minimum wage positions are entry-level. In other words, they're intended for workers with little experience and education. Usually, it's the "preparation" stage before moving them to more critical positions.

That means unemployment mostly comes from reducing these positions. However, given how important they can be to start a career, long-term complications are possible.

Does it affect labor demand?

Most of the time, rising prices reduce demand. People tend to avoid goods and services with noticeable cost increases. The same is true for businesses.

Unless productivity and income increase along with the minimum wage, companies will hire fewer workers. Even if lay-offs don't become a problem, job supply can still suffer.

General employment impact

Most debates around minimum wage focus on small gradual increases. President Biden’s minimum wage shouldn’t be sudden.

Realistically, the minimum wage isn't part of many people's lives. Therefore, the economy's impact should be negligible as long as it's gradual (more on that later).

Disadvantaged workers

Interestingly, minimum wage raises don’t affect overall employment as much as it does for disadvantaged workforce employment. They attract more people toward these positions, leaving out those who already faced difficulties finding work.

We need to consider what this means for business traffic. If that’s the case, the change might be negligible, as those who didn’t make regular clients will likely stay that way.

What about families in poverty?

We already covered this to talk about the small change it signifies for low-income families. Most advocates seem to agree that an employment decrease for better payments is worth it.

The problem comes with how wage increases reduce low-income families' eligibility for welfare programs and tax benefits. Healthcare also removes benefits once wages surpass certain thresholds.

But, could the US increase benefit the economy?

This article by NBC News seems to contradict the previous statements. It’s worth noting that the article mentions several states already increasing minimum wages for years.

Therefore, it’s hard to measure the real impact of Biden’s raise if several regions already implemented it. Luckily, that means CRE will likely not experience many changes as a result.

What do people think?

The article explains that most Americans support the $15 minimum wage. The article also goes through the inconsistent evidence of minimum wage increases promoting job loss, as we mentioned.

Additionally, experts explain that increasing cash flow stimulates the market. Gradual increases benefit average income without noticeably affecting employment.

How many would benefit?

The $15 minimum wage would boost earnings for 27 million employees, with 17 million earning less than $15 per hour. The other 10 million would benefit from spillover.

Another argument is that the US minimum wage keeps decreasing in value with inflation. Raising the minimum wage should benefit workers and businesses alike by encouraging cash flow and spending.

Can companies save costs?

Finally, turnover is noticeably less likely with better wages. While we mentioned training becoming less common, employee retention would increase, lowering the need for said training.

For commercial landlords, that means tenants should enjoy more productivity and profitability. Therefore, it could theoretically boost rent stability.

Most common minimum wage beliefs

This article by Critical Funatic is another exciting read. We say it's interesting because it's not about the US, but it discusses several of the arguments made by supporters and detractors.

It debunks the most common "myths" from minimum wage raises. What's intriguing is that it mentions both parties are wrong and right simultaneously.

Greater inflation

The $15 minimum wage in California caused businesses to increase prices, negating purchasing power.

Luckily, channeling this increase in a more extended period reduces the likelihood of a price hike. According to the article, drastic implementation is the problem.

Higher unemployment

Similarly, unemployment in California skyrocketed to record highs after the $15 minimum wage implementation. The increase was dramatic when compared to the previous year.

The increase needs to be under control for the benefit to occur. Calculated increments have proven not to cause unemployment.

Closing down small businesses

Finally, the strongest argument against minimum wages is that it hurts small businesses. The article summarizes everything into more of the same: only drastic measures are harmful.

Small businesses make a significant portion of commercial tenants. Correct implementation could improve clientele influx to these businesses thanks to higher purchasing power.

However, drastic implementation could cause businesses to close down. Therefore, it’s vital to stay on top of future news.

Why is Biden cutting out the wage increase for now?

That said, it might be long before this wage becomes a benefit or a problem. Biden’s COVID-19 stimulus proposal made it through the voting process, but not in its entirety. The $15 minimum wage was the casualty.

The reason is the vital observation. Defenders of the stimulus package stated that the $15 federal minimum salary would devastate small businesses. They’ve been the biggest victims of the pandemic, and they couldn’t afford this change.

Additionally, while supporting higher wages, the $15 reform would do more harm than good right now. The minimum wage has been set to gradual increases until the $15 milestone arrives in 2025.

That means the economy shouldn’t experience significant changes as it occurs. Most importantly, it’ll avoid the main pitfalls from these changes: drastic implementation. As is, CRE shouldn’t face too many problems, especially since tenant businesses won’t have to cope with significant expense increases.

A Startup's Guide to Building Remote Teams

Sun, 07 Mar 2021 15:17:43 -0500

Whether you want to cut costs or include top talents from any part of the world, a remote team can deliver the desired results more efficiently. As each member is allowed to work in their comfort zone, remote team strategies work well for employees. A Digital Ocean survey in 2019, for instance, found that 82% of remote workers experience low-stress levels when working from home.

In these extraordinary times, building remote teams is not just an option. Your strategy will differ depending on whether your workplace is a collaborative one or an individualistic one.

So, how do you go about it?

Decide what’s the Right Structure of the Remote Team

Now, you may or may not be open to remote working from before. You may have several questions.

Will it offer more productivity?
Will we be able to meet the quality requirements?
What about the team dynamics?
Are team members comfortable with the workload?

Several studies suggest how team structure can indeed drive in team performance. These strategies can differ from appointing team leaders to having clearly defined roles and routines, depending on the needs.

If you’ve an individualistic team structure, only a few may need office spaces. However, when it comes to a remote team work culture, all employees take the help of digital tools and work 100% virtually.

For instance, startups are generally advised to operate through distributed work culture as the whole system is still in the take-off stage. Working entirely in a virtual space can invite unanticipated problems and cause unnecessary hassles.

Recruit Members Based on the Required Profile

Not everyone is suited to every goal. You need to know your requirements.

As a startup, you need to hire based on the profile you require the most. Determine the set of skills your company can utilize.

You don’t want:

To spend time on too many meetings
Have problems managing with different and varied skill sets that do not match project requirements

To train employees even the basic skill sets

When hiring, keep in mind:

Projects that require expertise may not be ideal for freshers - who need remote guidance

The time zone you want employees to work in - should you want people to work across different time zones, collaboration could be an issue
Keeping every team member in the loop, including new hires and interviews
The amount of training involved

Don’t hire people who don’t know about their roles. Remote working can help people perform better in a stress free environment, but only if they know what they are doing.

There is another important note to keep in mind - you need to hire a mentor who is available. New hires need to understand the company culture, and you need someone who is available.

Finally, know if you are hiring the individual for a short or a long term. Remember to always screen candidates before hiring them, even if you do it remotely.

Look to Build Your Brand and Startup Culture

Working remotely means that employees may feel disconnected to each other.

Ask yourself,

How do employees communicate with each other?
Are you organizing any morale boosting activity?
How do you have a well-knit group?
Are employees comfortable using the channel of communication?

To collaborate better, all team members need to be able to communicate over a single platform. It doesn’t matter whether you are using Microsoft Teams or Slack - all employees need to stick to it.

Remote members are prone to feeling disconnected from the workspace, and it can impact your business disastrously.

Here is what you can do:

Hold periodic virtual meetings

In these online gatherings, address critical issues, boost up the worker's morale and induce a sense of alliance in everyone.

Celebrate the small accomplishments

Did someone complete a successful project? Did a client like the work of an employee? Celebrate the small accomplishments and appreciate the workers on their achievements. It incites positive energy among the team and smoothens the workflow.

Invest better and be open to feedback

Do not forget to collect feedback from the employees and acknowledge the areas that could get better.

Do your team members have access to the tools they need? Are they spending time on things that they don’t need to? Employees, on an average, for instance, receive as many as 121 emails a day. You may want to save up on that time. You could have someone else monitoring emails to reply to them.

Ensure that each member has access to necessary tools to prevent delays in work. It’s normal for startups to experience equipment and tech issues. Being open to feedback and investing on the right facilities - like a stable internet connection - is important.

That being said, do not have meetings without an agenda. You want your team members to be result-driven, and the statistics agree. On average, employees waste an hour a day on meetings - time that could be better spent.

Finally, Look to Create Successful Projects!

Startups need to grow - and a good way to do that is to focus on each project at hand to ensure you create a seamless experience for all.

One of the easiest ways to make team members be more productive is to set deadlines.

Specify the time you need the workers to be online. Convey the goals, deadlines, documentation needs, check-in times, and modes of communications to the remote workers to dodge undesirable consequences.

Apprise the employees about the expectations they will be required to meet and ensure accountability.

Here are a few tips to do that:

Follow up on each remote worker's performance
Assign mentors for a specific group of distant employees to track their work efficiency and imbibe work values
Installing time tracking helps at times, but only do that if all employees are on board with it.

The job market is changing, and so are the ways we do business. Workdays, for one, start with a Zoom and Skype meeting today. Your business needs to adapt, and with proper management and reliable communication channels, you’ll have it a lot easier.

In Conclusion

When it comes to startups and remote teams, it’s all about building it right. While the world is going remote, the lack of communication between team members can lead to negative outcomes.

Look to outsource when you can. Sometimes, that’s the smart way to be productive, especially if you want to save money on hiring full time. For instance, outsourcing for your back office needs or for energy audits might actually save you more.

You need employees to give their best, and that’s not possible if they don’t enjoy where they work. Working remotely has several challenges, but you could turn them to your advantage if you play it right.

CAM Reconciliation Season: Why It Matters, Considerations, And Making the Most Out of It

Sun, 14 Feb 2021 18:19:43 -0500

CAM reconciliation can be both useful and problematic. Like budgeting, it requires discipline, time, and focus. Companies create entire departments for it. However, it’s a vital step for every landlord wanting to optimize their income.

CAM reconciliation lets you keep tabs on your tenants’ responsibility and compliance. This process enables you to keep healthy profitability. Overlooking it is a quick way to accumulate unnecessary expenses that eat away at your lease’s returns.

Today, we’ll share insight from industry experts—as well as ours—to help you understand why it’s so important. We’ll also go through a few tips to help you streamline the task.

Before we start, what is CAM Reconciliation?

Capital Retail Group has an excellent definition of the process. CAM refers to “common area maintenance” in the US. However, it goes under different terms in other regions. For instance, “service charge” is the common name in Europe. Others know it as T&M or operating expense.

For simplicity’s sake, we’ll refer to it as CAM clauses and reconciliation. The name is quite self-explanatory. CAM expenses include the tenants’ responsibility to cover for maintaining and repairing common areas. These spaces include stairs, elevators, pathways, and other areas where footfall traverse, which doesn’t belong to a specific occupant.

Reconciling these accounts basically involves ensuring all tenants comply with their contracts’ demands.

Why should you care about it?

CAM reconciliation includes sending reconciliation statements and assessing payments and refunds for tenants; ideally, this event shouldn’t be a significant occurrence for any party. That’s it if managers budgeted effectively, and tenants compiled with their payments.

Landlords who fail during expense planning and budgeting have to compromise their pockets or credit scores. Asking tenants for reimbursement is complicated and cumbersome. Similarly, being too aggressive with CAM responsibilities also alienates tenants.

In short, CAM reconciliation is an important affair for both tenants and landlords. It promotes healthy relationships while maintaining important common areas well-kept. That attracts more footfalls, thus benefiting everyone.

What are common CAM Reconciliation challenges?

As detailed by RSM, property managers tend to take care of these reconciliation statements. That’s already a challenge because CAM expenses are primarily an accounting matter. It translates into needlessly tedious and ineffective statements.

However, there are several considerations besides that. All leases are different, and expenses are the same. Lease agreements usually change with time, and all these variables can make big differences during the reconciliation season.

Following RSM, Imperial Properties also has an excellent article detailing other considerations. Let’s go through the most important points covered by both sources to help you mini

Interests

Some leases let you amortize capital costs, usually during the lease term. Unfortunately, many landlords forget about collecting the interest charges included in said expenditures.

Management Fees

You can charge over 5% of your building’s annual gross revenue as a management fee. Make sure to pass the right fee during your reconciliation, especially when the lease agreement dictates it.

Gross-Up

Gross-up lets you accommodate current occupancy to curb expenses when your building still has vacant spaces. Many landlords fail to include clauses correlated to occupancy during their reconciliation.

Information Collection

Invoice and charge collection is crucial for CAM calculations. Many managers lose money because they fail to understand every expense that falls under this category.

Tenant Charges

It would help if you used previous years’ costs when calculating your CAM fees. Ideally, try to inflate your fees a little. That way, you just have to refund your tenants instead of compromising your property’s profitability.

Deadlines and Communication

Finally, make sure every clause and deadline are clear to your tenants. Additionally, remember to follow up with your occupants to address concerns before they become problems.

What can you do to make things easier?

Fundamentally, CAM reconciliation is straightforward. You only need to add all operational expenses from your properties. Then, you compare them against the charges to your tenants.

Now, everyone who works in real estate knows that the fundamentals don’t always reflect on reality. In practice, CAM reconciliation can be one of the most time-consuming tasks when preparing for the fiscal year.

Luckily, that’s mainly because many property managers don’t really know how to approach the task. Once you understand the principles, it becomes a lot easier. Furthermore, proper budgeting and expense assessment streamline the process.

The Colorado Real Estate Journal has an excellent assortment of tips for CAM reconciliation.

The first step is to ensure your general ledger is set up correctly. Poor coding or building assignment compromises your reconciliation.

Adjust your reconciliation to account for spaces that haven’t been occupied for a whole year. The same is true for space renovations and relocations. You might need to run several reconciliations and reflect discrepancies.

Don’t forget to go through pro-rata shares, gross-ups, exclusion, and amortizations. Anything that can change the shares and amounts for common area maintenance should receive attention before even starting your reconciliation.

Additionally, you should take note of all expense caps for every tenant. Doing so takes time, so you don’t want to compromise your reconciliation season with something you can calculate beforehand.

Some tenants and third-parties also require special consideration. Long-term projects usually require special reports from the provider. Similarly, many tenants present specific requirements for their reconciliations; get the most complex ones out of the way first.

The last tip is to try and run your reports at once. It’s more efficient than doing one at a time. You should create checklists for every property’s reports and store them together in individual folders. Doing so prevents you from unnecessary pauses during the process.

Finally, what has COVID-19 done to common area maintenance?

Springboard has an excellent summary of the pandemic’s impact on CAM reconciliation. It starts with how COVID-19 impacted commercial real estate—both landlords and tenants. It’s not a secret that the crisis has been changing the industry.

Therefore, many property managers have needed to revisit their CAM clauses. Naturally, social distancing regulations mean that common area aren’t really “common” anymore. These spaces are quite prone to crowding, which is precisely what we need to avoid.

These measures have shifted operational standards significantly. It might translate into less maintenance necessary, but adapting operations is still a noticeable task.

How to reconcile it during the pandemic?

We already explained what this reconciliation involves. It’s easy to expect the pandemic to make the process easier. After all, less traffic means maintenance is easier, right?

Well, that’s actually quite the opposite. The Springboard article mentions that this task has ranked among the most complicated processes during the pandemic. That’s because different safety measures have resulted in restrictions and considerations for common areas.

Sure, less traffic lowers costs, but that’s where the problem comes from. It has led to reconsiderations, negotiations, discounts, and adjustments to CAM clauses. Tenants shouldn’t be taxed similarly to when these areas were at their full demand.

Therefore, property managers need to consider how these measures have impacted their expenses. If anything related to common areas has been cheaper, tenants should benefit from this as well.

COVID-19 has already disrupted businesses enough. There’s no need for CAM clauses to do the same.

The software implementation is a Key Advantage

Property management software has become vital for many companies. It used to be just a competitive edge, but it has transformed into a requirement for survival amid the pandemic. Mainly, it streamlines accounting and leases management tasks.

Platforms like Yardi, MRI, and other ERP and CRM systems have proven invaluable for countless businesses. We can personally attest to their effectiveness and aid towards dozens of our clients during the crisis.

You can streamline CAM reconciliation without too much effort. The platforms we mentioned let your teams collaborate remotely while accessing all the data they need from a central platform. Furthermore, automation scripts and other integrations provide additional features and functionality to your platform.

How to reconcile it during the pandemic?

From our experience, the best advice we can give you is to work with professionals. We provide expert consultancy to help you identify the best solutions for your businesses. Our consultancy includes:

Finding the best features for your goals.
Adapting our selections to your budget.
Optimizing your strategies depending on your current needs and growth expectations.

Still, we offer more than that. We can implement the entire system as well. That includes installation, onboarding your properties and users, and more. We provide training and the right permissions for every user. We also run regular maintenance and set up the right features for you.

Finally, we also offer professional offshore help desks for effective troubleshooting. Our dedicated resources ensure full-time availability depending on the working term you require.

Making sure your software works perfectly is critical if you want to leverage all its features and benefits. Don’t risk your profits and investments working with inexperienced personnel. Every investment should grow your company, not the opposite.

YMCA of Greater Toronto Sells Mississauga Site for $90 Million

Mon, 08 Feb 2021 09:51:24 -0500

In a surprising move, Greater Toronto’s YMCA has sold its location in Mississauga, Ontario to a local company. The report from CoStar explains that the plan is a multiphase project spanning various towers.

The site interviewed the buying company’s president, who confirmed that the deal closed on the 5th of December. The $90 million number comes from property records. However, HBNG is still to release an official statement.

While the YMCA hasn’t commented on the topic, it appears there’s a lease negotiation for the organization to maintain operations. The site plans have several phases, but mixed-use towers with floor retail are among the initial expectations.

The Decision Behind the Sale

The Real Estate News Exchange has a more detailed article about the sale. It goes through the comments of John A. D’Angelo, both president of RGF and HBNG’s CEO. He states that the YMCA sat on a considerable asset, so they probably considered it was better to invest that value for more important tasks.

The YMCA’s goal, according to the report, was maximizing upfront proceeds from cash sales. It resulted in a request for proposals. RGF obtained exclusive rights for the property’s negotiation.

The mixed-use development for the site offers plenty of opportunities. Permitted developments for the property include many high-density projects. It means that residential, office and retail infrastructures are viable.

The Property Itself

The facilities include a gym, fitness studio, childcare service, and a swimming pool. However, the YMCA negotiated a leaseback to keep its operations. That’s why RGF has offered space for the organization if asked.

The site enjoys an excellent location as well. People can walk from it to retail centers, schools, offices, and other facilities. Both Celebration Square and the Square One center are in the area.

Condominium development in the surrounding neighborhood has also been increasing, driving demand for residential space. There’s also the light rail transit line construction that recently started development.

HBNG Holborn Group: Leading RGF Developments

HBNG is an integrated development firm involved with several real estate operations in the area. RGF is a partnership between high net-worth individuals and large Canadian pension funds.

The main goal for the group is to tackle every opportunity for growth in the market. That means investing in projects that can benefit a city’s growth or change life quality. However, not all deals benefit that vision, so they focus on the most relevant projects for their vision.

According to the article, the companies belonging to HBNG include Kapp Infrastructure, Poetry Living, and Soho Innovation Lab.

The Company's Portfolio

Finally, the company invests in different types of properties without concentrating on specific areas. For instance, RGF is partnering with Mattamy Homes to create around 700 homes. The official builder is Poetry Living.

On the other hand, we have the Soho Center. It spans 35,000 sq ft for retail and office space as well as parking. HBNG also developed a Walmart in Collingwood, and RGF led purchasing The Country Club. This golf course will see the Country Club Village’s development.

The Record Level Dip In Canada's Hotel Occupancy/Revenue: Will The Upcoming Mandatory Hotel Quarantine Help?

Mon, 08 Feb 2021 09:46:56 -0500

We've covered the pandemic's effects on real estate extensively by now. We've mentioned how many sectors have grown during it. Unfortunately, the hospitality sector isn't one of those.

Several news sites have covered the record lows experienced by the Canadian hotel industry. Travel restrictions and lockdown measures have taken a considerable toll. However, the upcoming mandatory quarantine for travellers has been suggested as a possible aid.

Is that the case? Let's find out.

General Rate Dipping for Hotels

CoStar has one of the best recent reports on the subject. Performance metrics for the last year saw severe harm from the WHO's declarations of a global pandemic. According to the article, the drop was immediate: 51% for demand and 60% revenue.

Naturally, occupancy fell 32 percentage points as well, dropping to a 33% average. Curiously, the warmer third quarter experienced the most robust demand levels. It dropped the next quarter again with the second coronavirus wave.

Urban Hotels: Biggest Damage

The drops weren't the same for the entire sector. Naturally, the urban side was the largest victim. Its reliance on group business resulted in more substantial declines than other categories, like resorts.

In general, limited-service hotels suffered fewer drops. Despite severe dips, the luxury sector also fared better than urban hotels. The need to avoid large crowds was the biggest hit for the urban sector. However, it favored smaller towns for leisure travel.

Hotel Supply

On the other hand, supply growth has remained relatively strong despite the pandemic and performance drops. The same CoStar article explains that the country has seen 5,000 new rooms opening.

Expectations for this year and the next one are also promising. However, experts estimate a volume drop in 2022 because of project opening delays. Hotel transactions also experienced a 19% increase from repositioning and hotel sales.

What Can Hotels do to Cope with this Crisis?

Luckily, things are unlikely to remain grim forever. This fall in hotel demand also comes from countless canceled trips. As time goes on, the wish to travel grows—especially with health measures demanding us to stay home.

That's why the list of tips from Hospitality Net relies mostly on this demand. Additionally, the promise of a potential vaccine for this year can also play a huge role in enabling travel again.

An Approach in Three Phases

The article breaks down the approach in three phases. The first phase touches on damage control as long as travel remains paused. The advice for hotels is to keep in touch with their customers via social media. While closed, hotels should strengthen their brand.

The next phase is the initial demand boost for travel. It should occur as regulations begin to ease, possibly including the vaccine's release as well. During this stage, hotels should boost their brand awareness. That also includes encouraging guests to book stays while adapting the experience to the industry's recovery.

Finally, the last phase starts after the initial boosts. It continues as demand goes back to normal, indeed once the vaccine is accessible. Marketing is still vital, but it'll probably go back to the standard. That includes creating packages and targeting your regular demographic.

The Ten Tips for Recovery

Aligning marketing with revenue management

Your recovery plan needs coherence with your revenue management and channel parity. Your booking perks, packages, special offers, and policies must align with each other. Your recovery strategy should dictate your marketing approach.

Improving websites

People will likely remain hesitant against crowds and visiting installations if it's not necessary. Your website should contain all the information they need to book their stay. Relevant information includes opening dates, health precautions, nearby attractions, and special offers.

Being flexible with cancellations

This advice lets you reassure potential guests that their bookings aren't a risky investment. With the importance of direct booking during recovery, flexible policies will prove critical to encourage visitors. It also helps develop brand loyalty.

Working with direct booking

Shifting distribution toward your direct channel will prove the most effective approach to boost your bottom line. The article mentions most revenue managers are planning to focus on OTAs. However, keeping healthy distribution mixes is still essential to maximize revenue.

Updating assets and information

All your digital assets must be up-to-date to make booking easier (and thus more attractive) for potential guests. Updates include whether or not your hotel is open and prevention plans. The mentioned flexible cancellation guidelines are also important.

Encourage re-booking over cancellation

You must try to recapture your bookings to maximize your profits. Remember that cancellations are bookings you've earned already. That means convincing your guest will be easier a second time. Implement email campaigns to encourage re-bookings with bonuses.

Consider feeder markets

The article mentions expectations for feeder market demand to pick up, especially with cautious customers booking a few months beforehand. Therefore, hotels should adapt their purchase offers accordingly during initial demand spikes.

Marketing according to demand increases

Demand won't be steady during the initial months. That means your strategy has to adapt to these swings appropriately. There's not much we can do to predict what every month will bring, so remember to check relevant news to update your approach.

Implementing CRM software

It will help if you stay connected with your customers, both past and new ones. Salesforce and similar apps can prove invaluable during recovery. You can create automated campaigns for capturing leads and promoting special offers.

Prioritize loyalty members

Finally, remember the benefits of brand loyalty. People familiarized with your brand will be more likely to book despite the uncertainty. Remember who these clients are and reward them accordingly.

What About the Obligatory Hotel Stay for Traveling? Could that Help?

Recently, the Canadian government announced new COVID-19 measures in the country. One of these measures includes obligatory hotel accommodation for travelers entering the country.

Luckily, the official Canadian government website has plenty of resources explaining these measures. As a general rule, the government recommends to postpone or cancel most travel plans.

The measures for exiting the country aren't too complicated. Entering is when things get complicated. For starters, travelers need to offer evidence of a negative molecular test not longer than three days before their departure time.

Other upcoming requirements include taking another test during arrival and spending three nights in an approved hotel until results arrive.

What Does this Mean for Travelers?

Air travelers will face the brunt of these measures. Firstly, they need to stay in an approved hotel around one of the airports taking international flights. That means the Vancouver, Calgary, Toronto, and Montreal-Trudeau international airports.

They must stay for three days in one of these hotels, except for specific, not-yet-disclosed cases. They also have to stay in their rooms until they have their test results, as mentioned. The main issue comes with the costs. They're responsible for paying for their rooms, food, transportation, security, and control.

They'll need to receive negative results and provide evidence of having a quarantine plan before they can leave the hotel. They're free to spend the rest of the two-week quarantine where they planned.

What Does this Mean for Hotels?

Not all hotels are eligible for quarantine. While still unreleased, there will be selection criteria for which hotels make it into the list. For now, we can rule out any hotel away from the aforementioned international airports.

Once the application process is made official, hotels will be able to assess the requirements. Those interested must submit an application form once the process opens. However, it's necessary to visit the official web page for updates.

Final Thoughts

The government hasn't released an official list or application process yet. Nevertheless, the measure is almost guaranteed. That means that preparation is vital. For now, our best advice is to wait and apply as soon as the list releases.

Additionally, we hope that our content and tips are helpful even for non-eligible readers. Make sure to stay on top of official announcements so that you don't lose your chance.

Reddit Rally & REITs: Why the Gains May Only be Short-Lived

Mon, 08 Feb 2021 09:28:44 -0500

Reddit has always been a huge forum. People from different parts of the world with other interests can find thousands of like-minded circles. It lets you talk about your hobbies and beliefs and get advice from experts in many fields.

However, the site has never been as famous as this year. A single Google search for "Reddit" or "GameStop" immediately yields results related to the recent rally. Reddit users were responsible for GameStop's stock value increasing nearly ten times.

You probably already heard about it. Social media is filled with memes about the situation, but did you know that this phenomenon goes beyond laughs? For instance, there's a movie planned about the issue.

The move has also been quite beneficial for real estate investment trusts (REITs). Now, experts debate on whether or not these benefits will continue. Today, we'll look at these opinions to determine what REITs could expect in the near term.

What did the GameStop Craze Mean for Real Estate Companies?

CoStar offers an excellent breakdown of the rally and its implications. Most importantly, it goes into detail explaining why the event could be short-lived. The rally did generate noticeable profits for investors. The problem is that higher valuations might take longer to make profits than the hype.

The earnings needing weeks to roll out is also essential. The results from last year were unique, thanks to the pandemic. The challenge for REITs is to maintain this boost. Luckily, vaccination for COVID-19 promises stock bounces for retail REIT.

REIT Shares Receiving Boosts

While GameStop was the leader, other stocks also experienced price swings. We need to consider that hedge funds were massively shorting these stocks. The increase from $45 to $460 was a massive hit for investors.

The same drive has appeared to benefit several REITs, according to the article. Real estate stocks were the center of negative views from Wall Street. Retail real estate was the most pessimistic outlook, especially malls and other shopping centers. Most owners had to cut their dividends to save capital, and countless businesses closed.

The rally drove the REITs upwards, with even the most shorted ones experiencing over 40% increases. Some companies even enjoyed 100% swings. That means potential for moves to keep the momentum going. Companies should start to consider new approaches to commercial leases.

AMC and its Real Estate Implications

AMC was another considerable winner during the rally. The stock started that week, sitting at $2.85 per share and sat at $8 at the time of the CoStar report. Its peak went all the way to $24. After the pandemic's damage to the theater operator, this was surprising, to say the least.

The report mentions converting around $600 million in debt to over $800 million in gross proceeds from Silver Lake Group, an AMC lender. However, it also states that they were unable to contact AMC officials for comments.

Naturally, AMC benefitted from this sale. The stock boost also translated into over $300 million in additional capital.

What has this Meant for Malls?

Even if share prices start going back down, they might still level out over their previous stance. If that's the case, raising capital is possible. The main problem for malls is that share prices disabled the ability to gain capital.

There is Macerich, for instance, a mall REIT in the US. The company collected profits from the rise, which was beneficial for Ontario's Teachers' Pension Plan Board as well. The public fund managed to sell its Macerich stocks, a stake worth $500 million.

Interestingly, malls showed the best performance for REITs in January, with 18.5% returns against the overall 1.5% index. The main reason for the expected comeback is their cheap stocks. The vaccine rollouts also promise a promising outlook for this year.

However, things are still Looking tough for Malls

Despite the good pictures in the future, some experts state that the rally shed light on a dire future. For instance, Bloomberg recently reported that the huge push still isn't enough to save malls.

Curiously, the Teachers' Pension Plan case in Ontario provides plenty of evidence. Its shares sold to Reddit investors. This exit shook the ground for industry experts, especially considering it was the largest Macerich shareholder. Unfortunately, it's also an exit from one of the best-positioned mall REITs against the eCommerce trend.

Bloomberg's analyst, Lindsay Dutch, commented that Macerich faces challenges from both the pandemic and the overall outlook for mall space. Several factors come into play for the company's bearish expectations. It's not a secret that government restrictions decimated retail revenue. Now, there are two aspects to this.

Struggling Properties

These measures have driven major landlords to opt for bankruptcy. For instance, even the Pennsylvania REIT have been victims. The site's regional mall index saw a 41% fall last year, part of a five-year decline.

The same holds for individual properties. Spaces, like Prizm Outlets in Las Vegas, have gone through auctions. That particular case saw a $1.525 million sale, 95% below its previous appraisal.

Reddit groups have discussed struggling stocks extensively. Other names include the aforementioned AMC and Bed, Bath & Beyond. Bloomberg mentions that these names were the focus for the bidding frenzy from the Reddit rally that drove GameStop upward.

Premiums

On the other hand, boosts for companies like Macerich are a considerable premium against their assets' value. These companies' leverage is one of the reasons. Misplacing will likely correct as time goes on, particularly in the long-term.

An example is a previous relationship between Ontario Teachers and Macerich. The fund held 11% of the company's stakes, obtained in 2014. As the fund exited this position, they claimed that they'd focus on diversifying their real estate investment. Part of the strategy is to grow their Canadian business.

Did you know GameStop Stocks are Falling Quickly Again?

The eyes well over the news when GameStop's shares skyrocketed. Naturally, that meant REITs got a lot of breathing room. However, a lot of these people failed to notice that these numbers have started plummeting recently.

By February 4th, the retailer's shares fell 33%. This fall adds to an overall decrease of 81% for the week. One of the main reasons seems to be day traders moving to other stocks. The same has been true for AMC, with stocks falling over 45% this week.

The decline has resulted in considerable losses for the Reddit investors. Some of the cited reasons include manipulation from Wall Street.

However, we need to consider that this huge upsurge attracted countless investors merely focused on the profits. As the short-term returns come, these traders usually move to the next stock. Day traders speculate on short-term gains, and there's no reason to believe they didn't make up a large portion of the Reddit Rally.

The Rally Tries to Keep its Commitment

Reddit investors are still committed to maintaining the rally. The NY Post article linked mentions Meminem, a user was stating that a second wave is coming. The statement reports several strategies, such as moving to Etrade from Robinhood over gain freezes.

Dave Portnoy is another committed Reddit investor, apparently a major player in the rally. Starting February, he was reported to sell his GameStop and AMC shares for a loss of around $700k.

However, Reddit message boards still show optimism and distrust for Wall Street practices.

New Interest Drives Away Investors

The main reason for this downfall is the number of day traders moving to more interesting stocks. Interestingly, this new focus seems to be pharmaceutical companies. Another Reddit user mentioned investing in Cassava, a smaller drug manufacturer with promising Alzheimer's treatment research.

The company reported a 280% increase in shares, along with another company called Annovis Bio, with a 145% boost. Anavex Life Sciences experienced the same percentage. The three firms report similar progress with Alzheimer's treatment.

The Backlash Against Reddit and Similar Forums

Reddit has been the target for many critics accusing these forums of manipulating markets. The basis for these statements seems to be that this manipulation is unlawful, particularly around Section 230. This statute ties into social media's liability for its users' activity.

Some of the statute's carve-outs, for instance, point towards holding tech companies responsible for the content generated by their users. Similarly, some detractors also bring out the First Amendment. The thesis is that some precedents hold companies responsible for criminal communication via their platforms.

Reddit is largely self-moderated by the different communities. The WallStreetBets Reddit forbids insider information and other attempts to "game the market." Both WallStreetBets and even Discord have started to moderate their spaces against misinformation—but not stock market influence.

Final Thoughts

The most important takeaway from these reports is that the Reddit really seems to be a short-term event. As stock prices begin to fall again, REITs benefitting from this movement should make the most out of their gains before they disappear.

Considering a new strategy for screening tenants is mandatory. We've already reported how different industries have grown during the crisis. Capital gains from the Reddit rally should go into adapting methodologies to make the most out of this year's expectations.

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