Portfolio management and property planning
Property management software supports the automation of processes like portfolio management, transaction management, lease management, and (capital) project management for real estate owner and occupiers.
Property or real estate managers in commercial real estate or corporate real estate have unique needs when it comes to technology and software. This becomes even more challenging due to the different roles and responsibilities in property and real estate management. There are many property management solutions and real estate management solutions on the market that meet these specific needs, either as a point solution or as integrated software. Of course, this also means that average cost of property management software and real estate management software can vary considerably.
Differences in property management software on the market
There are different uses of property management software. The property management function within an Integrated Workplace Management System (IWMS) typically focuses on corporate real estate processes (CRE) for both property owners and occupiers. In real estate management, an IWMS typically supports business processes like lease management, portfolio management, transaction management, (capital) project management and strategic property planning. Distinctive from standalone property management systems or standalone real estate management software and tools, an IWMS can offer integration of these property management functions with adjacent real estate processes such as maintenance management, sustainability, facility management, space management, and workplace optimization.
The huge financial impact that is involved in corporate real estate for large organizations and multinationals combined with the increasing need for portfolio transparency, compliance, and business continuity, builds an immediate business case for the implementation of a property management software. Especially when the property management software combines the functionality of multiple property management solutions into a single property management system. Because markets and demographics change fast, organizations that operate many branches or locations have an urgent need for property management systems. Banks, retailers, and the pharmaceutical, production, and the hospitality industries need fast acquisition and sale of properties, timely lease cancellations or renegotiations, and assets that represent their brand properly.
Learn more about property management software
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Property management software & lease management
Core functionality of any property management software is managing leases for landlords or tenants. Combining lease management for lessors and lessees in one software solution allows corporate real estate organizations to manage both their owned and rented real estate in the most efficient and effective way. In both situations all financial aspects of lease management such as lease payments, lease incomes, financial forecasting, price adjustments, price indexing, and service cost calculations are managed and reported with a single integrated software solution.
As individual lease contracts can include complex arrangements and deviations, property management software is needed by any organization that has multiple lease and rent contracts. This allows organizations to assess rental options, renew and archive contracts, monitor the resulting financial and legal obligations by automated notifications for deadlines or cancelations, and proactively align their real estate supply with future business demand in a timely manner.
Property management software & lease accounting standards
In lease accounting, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) introduced changes in the way leases will be classified and the way lease costs are defined. These changes affect the balance sheets of most organizations and the lease administration practice of corporate real estate managers, accountants, and controllers. The changes include the requirement for companies to capitalize operating leases and include them as assets and liabilities on the balance sheet. It also includes a change in the definition of a lease payment, which will include certain variable rents, contractual payments, and renewal rents. The scope of the changes include leases on many types of assets and real-estate-related leases for companies reporting under US-GAAP (FASB), GASB 87 (GASB), and IFRS (IASB).
Download our Lease Accounting brochure on how to handle these new lease accounting standards.
Portfolio management and real estate planning
Successfully managing properties and real estate starts with accurate data and transparency. As a part of the property management function, portfolio management software provides a clear and standardized overview of your real estate assets including information like technical conditions, space and workplace utilizations, scenario planning, CAD visualizations and portfolio reporting. These systems ensure that the real estate strategy and portfolio is in line with your organization’s objectives. Strategic real estate scenario planning also helps you to analyze the actual performance of your portfolio against organizational goals and identify the gaps in your current strategy. In addition, it offers the tools to close these gaps with functionality for transaction management to acquire or dispose properties, or to help with capital project management in planning, managing, and controlling capital expenses.
"85% of real estate and facilities managers say space utilization is important in shaping the firm's real estate strategy from now until 2021."
Find out more in our Capital Project Management white paper.
With portfolio management software, organizations can quickly and easily review the total costs of ownership (TCO) for all real estate properties and make sound financial decisions based on facts. By presenting a holistic view of your real estate assets, these solutions provide you with the means to make strategic decisions based on the expected lifecycle of your buildings. This allows executives to identify areas where significant cost savings can be realized and gives the information needed to accurately project future capital flows.
In many cases, property management system that also includes portfolio management is labeled as an integrated workplace management system (IWMS), and supports organizations in standardizing both data and processes to ensure reliable and compliant reporting and allows internal or external benchmarking.
Infographic - Get in control of your real estate, lease contracts and financial obligations
Property management software and IWMS
When combining real estate asset management and property management software in one IWMS solution, organizations can benefit from many advantages. All property data is registered only once in one single database and is used by many processes in real estate, maintenance, space, facility and sustainability management. This ensures high data quality and corresponding KPI reporting and portfolio analyses. By integrating these different processes, the strategic, tactical, and operational handling of all building and property-related activities are managed from within one integrated solution. This increases the opportunity to identify and implement improvements, and can help reduce the TCO of your portfolio.
An IWMS includes proven systems integration capabilities with important systems such as geographical information systems (GIS) for visualizing portfolio mappings, Building Information Modeling (BIM) for maximizing the reuse of design and as-built information during the property lifecycle, and enterprise systems like SAP to integrate with core financial processes.
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