EDR’s CEO on Forbes Real Estate Council: Technology Reshapes Property Risk Management

How Technology Can Redefine ‘The Art Of The Possible’

In an article that was just published by Forbes, our CEO Chris Aronson shares his insights into what the rapid pace of technological change means to property risk management. Below are five key points from his article:

Thanks to technology, the needle is moving toward efficiency and smarter risk management.  

“Our industry is filled with opportunities for technology to be truly impactful. This isn’t threatening, but will instead allow professionals to spend their time applying expertise rather than performing mundane research and struggling to connect the dots across disconnected silos.”

As an industry, we are on the cusp of bringing life to property data that just hasn’t been readily accessible before.

“Lenders collect a growing universe of data points on a property during the underwriting process that precedes a loan origination, and then more post-origination. In the end, the investors and lenders own the data. Yet the data is stored in different formats, and not in a cohesive way that allows this intelligence to be accessed, harnessed and used to support broader decision making. Imagine if all of that data could be married into one consistent format that would allow for more holistic views of a property — and even an entire real estate portfolio.”

Data is at the core of real estate’s transformation as technology allows data points to connect and tell a richer story.

Data acquisition and management is the most resource-dependent aspect of lending. The next stage of evolution will involve tying thousands of data points together to allow for new levels of risk management. There are literally oceans of data on commercial properties inviting us to make sense of it all.”

Structuring data in a common standardized format is the first hurdle.

“Artificial intelligence is already in early stages of extracting information from other commercial real estate documents such as rent rolls and trailing 12-month financials, but a structured format would cost less and reduce the risk of disenfranchising the smaller participants. After banks get comfortable centralizing their own internal data, the next stage in the evolution will be to layer on public and third-party data sets to further advance more robust property risk management. A major challenge to overcome will be tying these data sets together at the individual property level on a large-scale basis.”

Unleashing the power of information by bringing data sets together will bring us to a greater depth of understanding into portfolio risk.

“What if a risk manager at a large financial institution could look back at all the originations on commercial properties and view a dashboard summarizing the bank’s vulnerability or greatest risk exposure? What if an investor could look at transactions with a particular institution over time or in a particular geographic region? There is no easy way to do that now, but a few years down the road, the impossible becomes possible. Maybe even seamless.”

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For more on the art of the possible and technology’s potential to allow property risk professionals to do the jobs they’re doing better, smarter and faster, read the full article.