Real Estate as a Service (REAAS) is revolutionizing the real estate world. A new trend in services is approaching and little by little its success is generating more followers in the real estate market, for both investors and consumers.
“The business systems in the real estate project field have been traditionalist and have not brought great changes in recent decades. That is why many entrepreneurs focused on the real estate and technology field are trying to change this. ” -Gary Beasley, CEO & CO Founder, Roofstock.
We are talking about shaping up the real estate market with a completely service-focused perspective. But before we start, let’s look at a bit of history:
The history of services in real estate developments: two centuries towards Real Estate as a Service
In the American continent, various clubs and societies had a boom and bust time during the late nineteenth century, mainly at the highest levels of society.
Subsequently, an economic policy focused on reactivation was generated in the 50s in the United States.
“After the great economic depression of the 1930s and World War II, American government planning seeks to fill the void in arms production lines and replace it with the production and consumption of goods and services for modern society.” -Lizabeth Cohen, Prof. American History, U. Harvard
The consumption of household electrical goods replaced the production lines of war material and generated a middle class eager to have a home of their own.
This is how North American suburbs and private communities came to be, where certain services such as golf courses, gyms, chapels and recreation areas were provided.
People moved to the outskirts of the cities, where they had exclusive services for the members of that community. This was in order to provide basic services and counteract the discomforts of being relatively far from shopping centers, parks and churches.
This trend continues to this day, reaching residential clubs around a golf course. However, in the last decade many clubs of this style in North America are going through a very critical stage in their finances, since the current millennial market does not share the same lifestyle of previous generations.
So what change can we offer to this market that improves their quality of life? What can we do as real estate developers to generate added value that meets current expectations?
What is REAAS focused on sales?
Real Estate as a Service is the provision of rental services through current tools focused on the rental of space to live or work.
Current success stories include Airbnb, which is a digital platform to rent real estate or fractions of it to stay in a certain time, and wework, which has revolutionized the workspace focused on startups and established businesses, having outstanding clients such as Visa, Microsoft or Samsung.
Real Estate Platforms
There are real estate platforms where access to all the houses and apartments available in your city is simplified, with the benefit of how simple it is to sell a property. In some cases, they offer better rates than a traditional real estate agency.
It is an alternative and complementary ecosystem where anyone in the world has immediate access to available properties and can compare them in qualities and price to similar ones.
In the United States, sales have been successful with platforms such as Rootstock, through which many buyers never requested a physical visit of the property when acquiring it, since the virtual and the rest of the content in the platform provided enough information for these prospects.
These platforms allow you to monitor the number of searches made on the product for sale and offer enough metrics to generate a better sales strategy.
The diversification of other sales means has generated an extra tool to accelerate the development sales process.
These apps are evolving with artificial intelligence so that the system understands what the trend is between the previous elections, to offer products with similar attributes (adjusting to style, budget, area and m²).
REAAS as an added service
Real Estate as a Service is a new proposal in a dynamic context, it forms traditional practices to adapt them to new technologies, a culture of experimentation and innovation and an offer of new experiences to the client.
’’ Customer satisfaction reflects the expectations and experiences that the customer has of a product or service. Consumer expectations reflect both past and current product evaluations and user experiences. ” – Scott Smith, Ph.D., Qualtrics.
Let’s imagine a real estate development as a brand or as a service that adapts to the needs of each user and its flexibility allows giving a better quality of life to users.
How can I do this if the terrain of my development does not allow it? Will such an idea raise the cost of my project? How can my project aspire to be flexible if it is an office or departmental / residential building? For those and other similar questions, I could answer you with these 2 simple questions:
- Do you really know what your end user is missing that no one else is offering in the market?
- How are you attacking the improvement of efficiency and quality of life of the tenants?
I know it sounds like a very open definition, but let’s put some examples to better illustrate the concept:
REAAS for corporate buildings
If for a moment we stop understanding buildings as static areas and we begin to give more value to what is done inside it, we can generate new ways of using space without having to be there.
Indoor activity is essentially more important to the tenant than the workplace itself.
What a company is looking for is better management of its resources, an adequate space to work, save time and costs, therefore, our development must solve these needs in some way.
- FLEXIBILITY: An office complex can be modular and adapt every certain period of time to the growth or reduction of personnel or required space. This would generate a better use of the building’s m² and would considerably save tenants’ rent, allowing owners to have more m² available to other tenants. This could generate a 20% savings in rental costs and that same space can be occupied by other members of the development.
- SPEED: Let’s think outside the box and instead of having a large building, have 2 or 3 smaller-scale, but strategically positioned in the city. The workforce could choose the closest work center to avoid wasting unnecessary hours in traffic and consequently have a better quality of life and work performance.
- EFFICIENCY: Today we have the ability to have remote offices where the company’s information is virtual and the work team can have access in the areas where this network has access. This cloud and intranet service is provided by the same real estate development including cybersecurity, continuous backup, speed and storage capacity. Work centers can have their own private network where they can have 4k conferences and keep in touch with the rest of the team remotely and efficiently.
In other words, the building becomes part of the work process and advantages can be taken as is done in ERP (Enterprise resource planning) technology, focused on improving labor productivity through planning of the human resources of the companies, such as Monday or Asana.
REAAs for residential complexes
The high cost and the limitation of the land space limits us as developers in offering more and better services.
We have to begin to eradicate the title of “tenant” and replace it with “member”.
Let’s think about having a network of complexes around the city with a similar quality and that members can enjoy all the amenities of the developments, where each one has a unique quality that differentiates and complements them.
We would be talking about being able to offer new members a range of different activities at every opportunity: a beach club, lake, paddle courts, terrace bar, semi-Olympic pool without having to limit ourselves to the m² for each complex.
- COUNTRY CLUBHOUSE: Instead of having a clubhouse within the development, let’s imagine having access to a clubhouse in an attractive location near the project. The developer could better manage its resources by relocating its amenities to an area where the land is not at such a high cost but which can provide users with spaciousness, peace and more benefits than an amenity that affects the property’s land use coefficient.
- ACCESSIBILITY: This proposal can be enriched by offering a fully furnished cabin. That can be managed time-share during the year among all members.
- TECHNOLOGICAL SERVICES: Provide a high-speed internet access service in any area of the development, transform from a traditional clubhouse to a coworking area and digital entertainment.
- REAL ESTATE APP: Develop an app where members can monitor their payment date, maintenance reminders, notify tenant meetings, and, why not?, a way to connect between members.
- SECURITY AND CONTROL: Have access cards or access by means of fingerprint or cell phone to be able to request access to guests and a better method of contact with private security.
- MARKETING TOOLS: Real estate marketing tools include Branding and graphic design that is used before, during and after the sales process. Focusing on the “after” is to maintain an aesthetic guideline that reinforces the values and distinctiveness of the comprehensive real estate service, either for official notifications and content of the real estate app.
Currently, what one does and where it belongs is valued more than a possession. As social beings we have a peculiar need to belong and by taking these factors into account we can give added value where investors and members will benefit from this new perspective of generating a lifestyle and serving a specific market niche.
In Latin America we have companies specialized in technology consulting such as Triarii, which offers to improve corporate efficiency through various technological services (ProTech, FinTech, Big Data and corporate cybersecurity …), since the real estate market needs to optimize its resources ( materials, Workforce, square meters) as other sectors do and that is where the importance of this issue lies.
What other approaches as service methods would you propose in your industry? Do you think this will mark a watershed in the sector or will it be a passing trend?
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