Matterport Blog: How to transform capital planning for commercial RE18673
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|Matterport Blog (19 May 2023) How to transform capital planning for commercial real estate with digital twins | Gain visual clarity across your portfolio to drive efficiencies and control costs
The following is a summary of the Matterport blog post. The summary was written by ChatGPT-4.*
In the context of a fluctuating economy characterized by escalating interest rates and financial uncertainties, commercial real estate investors are grappling with intricate capital planning processes. Effective portfolio management necessitates the tactical allocation of resources to optimize returns, ensure economic resilience, and mitigate risks throughout a property's lifecycle. Yet, conventional methods of administering these workflows can be unproductive, particularly with properties and teams scattered across multiple locations.
In response, digital twin technology provides an innovative solution for commercial real estate investors seeking to introduce transparency and efficiency in capital expenditure planning and portfolio management. A digital twin is a detailed, 3D depiction of a property that enables viewing and navigation of the space as if physically present. This technology can notably decrease costs and supplement traditional asset management platforms with visual clarity, thus aligning stakeholders throughout the planning cycle and enhancing speed to market.
Due to the turbulent economy and increased interest rates post-pandemic, commercial real estate investment strategies are undergoing significant shifts. Investors are confronting challenges such as liquidity reduction, declining demand, and difficulties in securing finance for new investments or refinancing existing loans. This situation is slowing transaction pace and new development. Additionally, the switch to remote or hybrid work models by many businesses is causing an oversupply in some markets.
To adapt to these changes, many real estate owners are adjusting their investment strategies towards more conservative options or focusing on distressed properties, which can be purchased at a discount. They are investing in alternative assets like medical office and healthcare facilities, data centers, and self-storage facilities over traditional office properties. These offer more stable returns in volatile market conditions.
When managing complex real estate portfolios, traditional asset management systems often lack the required flexibility and integration capabilities. This leads to data silos, planning errors, inefficiencies, and difficulties in gaining insights for informed investment decisions that can keep pace with the market and deliver ROI.
Digital twin technology is proving to be a potent tool for commercial real estate owners and operators to assess, manage, and market their portfolios, properties, and spaces. They are integrating digital twins into their tech stack to centralize portfolio management and expedite space planning decisions for property improvements, repurposing, acquisitions, and dispositions. This incorporation yields a myriad of benefits, including reduced costs, quicker decision-making, and more efficient project cycles.
Digital twins enable real estate investors to digitize all properties in their portfolios, centralize access for all stakeholders within a secure online library, and replace in-person site visits with virtual walk-throughs, saving time, money, and carbon emissions from travel. They increase collaboration and team efficiency, simplify capital planning decisions, and expedite time to market.
Scenario planning and test fits, retrofits, and space optimization facilitated by digital twins help commercial real estate owners and property managers anticipate and respond to market changes and tenant needs. This reduces risks and costs associated with tenant turnover and ensures the property remains competitive. Retrofits enhance a property's value and functionality, while also improving occupant experience and reducing operating costs. Space optimization allows commercial real estate owners to make better-informed decisions, improve asset performance, and drive returns.
Creating and managing digital twins for commercial real estate portfolios has been simplified with platforms like Matterport, which offers professional Capture Services in over 700 cities and best-in-class 3D cameras to ensure quality space capture. The digital twins are stored within a personal Cloud library for always-on access, allowing the team to view, edit, and manage the spaces at any time. This streamlines portfolio organization and evaluation processes and allows discussion of multiple sites in one sitting. Matterport also offers an API integration to connect digital twins to the existing tech stack, enhancing planning workflows.
I provided the following prompt to ChatGPT-4: "Summarize the following in around 500 words: ..."
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