It’s an exciting time to be in real estate, with everything from AI, to smart buildings, to IoT, to blockchain technology, the industry is changing constantly and rapidly. As technological advancements grow, so does the need for organizations to be flexible in order to more effectively adopt the technologies that add agility and efficiency to their processes.
To further explore the impact of technology on commercial real estate expense management, we hosted a Property Tax Transformation Conference, Unifying Process and Technology, in Miami a few weeks ago. Some of the sessions presented were:
- The Best and Worst of Property Tax Administration
- Challenges in Managing Multi-Property/Jurisdictional Portfolios
- The Importance of Property Tax Software
- Leveraging Technology in Managing Assessment Appeals
- Combating the “Silo Effect”
With representatives from some of the country’s largest REITs, retailers and corporate taxpayers in attendance, we discussed the biggest challenges and risks associated with managing a multi-property real estate portfolio. Attendees shared their experiences dealing with property tax management and how the perception of property tax and its relationship within the rest of the organization is changing.
Some of the largest challenges and recurring themes associated with managing a multi-property portfolio include:
- Data management
- A lack of standardization
- Departmental silos
- Inability to collaborate securely and efficiently with external parties
- Inadequate multi-jurisdictional oriented technology
- Inability to generate meaningful intelligence, insights and reports
As we explored the nuances of the above challenges we were able to identify many opportunities for improvement in the various processes. A large number of attendees shared their experiences with technology like cloud-based collaborative software, automated data flows and integrated systems, stating that the use of these tools had a huge impact on their department’s ability to tackle the identified challenges, increase efficiencies and reduce cost.
Interestingly, another major trend identified at this conference was the heightened focus on property tax by financial leadership. In the current economic climate, companies are looking for ways to protect themselves from the risks associated with changing overall market conditions. This means reducing or closely monitoring large expenses like property tax. As such, the demand for effective tools to properly manage property tax is at an all time high.
A few years ago, the main concern of leadership in regards to property tax was merely meeting payment deadlines. Nowadays, there is a greater emphasis on being proactive. Reducing cost is a huge priority for most organizations, as is increasing stability in the portfolio and improved forecasting to enable decision making across multiple departments. The good news is, with higher expectations for the performance of the property tax team, organizations are more open to investing in the appropriate tools to help manage this significant expense.