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TECH TOOLS LIGHTEN LOAD FOR DEVELOPERS

HIGH-TECH SYSTEMS HELP THEM BUILD AND MANAGE THEIR CENTERS

By Dees Stribling

The real estate industry has never had a reputation for embracing new technologies. Instead, it has always tended to keep a respectful distance from the cutting edge. Some firms resisted computerization well into the 1990s, for instance, and others were slow to exploit the benefits of online connectivity a few years later.

But all of this belies the fact that some real estate firms, including a few of the larger landlords, actually adopt new technology eagerly — albeit with generally little fanfare. Retail property owners have been hard at work applying proprietary software to the tasks of shopping center development and management. And the results, they say, are finally starting to show, though difficult to measure precisely.

“It’s hard to generalize, but the larger retail owners tend to be earlier adopters of technologies to improve their businesses,” said Mark Brown, chief information officer of General Growth Properties. “That’s a function of being able to devote resources to new technologies, but, also, the fact that the larger an owner is, the more useful a successful new technology is going to be. We’re willing to consider any sort of new technology, but not all companies see the value of that kind of mindset, so there’s a wide spectrum of technology use within the industry.”

The development of business software for landlords is usually no matter of merely ordering something off the shelf, however. “Generally, we build our own applications,” said Brown. “In recent years the perception in the company has been that the applications available commercially weren’t particularly good for our purposes. It’s been simpler to build something ourselves.”

That could change, though. “There are some emerging products that promise full CRM [client relationship management] for retail owners,” he said, “but there isn’t one yet.”

Among the more mission-critical tasks a retail owner undertakes is leasing, a function that generates mountains of documents, electronic or otherwise. It’s no surprise, then, that owners have focused a lot of attention on improving the process.

General Growth’s lease-management software automates many aspects of the work flow. “The lease documents are automatically generated,” said Brown. “We can create informing leases and then reuse them with new data and new locations. We’re working to standardize agreements with tenants, and we have technology to help us do that.”

Developers Diversified Realty Corp. uses a Lotus Notes-based system customized for lease management. And this is no small matter for a firm DDR’s size, since its portfolio encompasses about 8,000 leases, plus attendant documents. “It’s a work-flow system that tracks the leasing life cycle of a deal, from prospective activity to store opening,” said David Perry, DDR’s director of leasing services. The DDR system, like General Growth’s, is integrated across multiple departments with a work-flow engine that generates tasks for other departments or members of the leasing team — property manager, head of tenant coordination or someone in the marketing, accounting or legal department.

DDR’s software also shapes the way leases are created. The firm hired Open Text, a Canadian software company, to help “tag” the lease clauses to make them searchable and to create a clause library. The tags consist of structured text a computer can search. “This is opposed to separate blobs of text, such as Word documents, so you can leverage the information in the lease,” Perry said.

The lease tagging is being phased in. Once it is done, the searches will be much faster, Perry says. “Without a tagging, you’d have to pull every lease on a shopping center if you were looking for exclusive language clauses for that shopping center,” he said. “As for the clause library, our legal department will be able to go to it for an entire template, or just certain clauses, to customize any particular lease, and it can be done quickly.”

The benefits are hard to quantify, but generally acknowledged nonetheless. “If you compare a leasing manager having to pull 30 leases and comb through every lease to find what he wants, a process that might take all day, versus running a report in five minutes that shows all the language, the benefit is obvious,” Perry said.

Brown thinks so too. “Management and the legal group would tell you that the lease-management software has expanded their ability to do more volume with the same staffing in the same number of hours — a productivity return, as new technologies should be,” he said.

Another custom software system for leasing was crafted by Jacksonville, Fla.-based Regency Centers Corp. “It’s Web-based, and, as you answer questions, the system creates a lease,” said Bob Kroner, vice president of information technology. “It helped us create standardized language for our leases and helps us create the leases faster. For example, if the tenant is a hair salon, the legal department doesn’t have to put in hazardous waste or hazardous odor disposal language in the lease any more — it’s put in automatically. The system ensures that all the various clauses and other language are there.”

An important aspect of Regency’s lease-management software is called Premier Customer Initiative, says Kroner. “By using this application when looking to place a tenant, a leasing agent can match what a tenant wants, what kind of demographics and who they want as co-tenancies, with what we have to offer, and the system can do it quickly. It’s a tool for the leasing agent to be more educated on the phone with retailers.”

The quest for useful technology for retail owners does not end with sophisticated leasing platforms, however. Lease management may be the most recently ripened technology for retail owners, but there are other applications on the vine. “One of the initiatives we’re really interested in now is more fully integrating our business processes and the technology to support them,” said Brown. “If you have a budgeting and forecasting application, then the goal is to fully integrate them into your accounting engine so there aren’t duplications of effort, and then in turn to fully integrate each aspect of the leasing process so that all the parties involved are sharing all the data through the entire work flow.”

A related technology that General Growth is seriously interested in is business intelligence applications. “It’s a way to get a comprehensive look at your company, to step back for a broader view, bring in data that’s external to your network and put it in the data warehouse,” Brown said. “Eventually, it will make a more sophisticated analysis easier for end users.”

Closer collaboration, too, between owner and tenant, is a goal when using better technology, whatever form it takes, Brown says. “There’s a benefit to our tenants in the long run if we integrate our systems with theirs in some ways,” he said. “We’ll give them the ability to pull lease templates or clauses or other relevant information from our system to theirs.”

Kroner says closer collaboration between landlords and tenants is going to be a major thrust among Regency’s new technology initiatives going forward. “This year we’ve started online collaboration sites with our major tenants,” he said. The reference is to sites where a project’s participants can upload documents and images and find timelines. “That might not sound new, since people have been collaborating online for some time,” he said. “But this is more about using the existing technology, refining the process, to improve our relationship with our development partners. It’s one of the most important uses of technology.”

Maybe the real estate industry is shedding that tech-shy reputation at last.

WIRELESS INTERNET HOT SPOTS ARE HOT TICKETS AT MALLS

For years Starbucks, Stop & Shop and others have been stretching the amount of time customers spend at their establishments by offering them wireless Internet access. Now mall landlords are increasingly expanding this technology at their properties, viewing it as a valuable service to shoppers and a new revenue stream.

Portuguese landlord Sonae Sierra has installed Wi-Fi systems in all 21 of its malls in Portugal. The firm also offers Wi-Fi access at its nine Brazilian centers and at three of its Spanish properties. “We didn’t install Wi-Fi as an entirely free service, and we didn’t do it on our own,” said João Reis do Carmo, general manager of the new technologies business at the Sierra Management division of Sonae Sierra. “We subcontracted some companies that did the installation and are exploring the service as their own business.” Shoppers at Sonae Sierra malls get a 15-minute free trial before they must pay, though they have free access at any time to Sonae’s own Web sites. And mall tenants can sponsor Wi-Fi service offers for their customers.

Many of the larger U.S. landlords offer limited Wi-Fi access at some of their newer properties, and several are expanding Wi-Fi capabilities at older malls undergoing renovation. Macerich has two properties with live Wi-Fi and is planning to install the systems in five more centers by year-end. Macerich handles all its own Wi-Fi operations at its data services center in Phoenix. The firm determines the appropriate Wi-Fi service by property and then implements it in the common area. Macerich says it will probably extend this service to other areas of its centers later on. Smaller landlords need not sit out this wireless revolution, though. A company called Whotspot supplies a complete Wi-Fi setup and support services at any location. Whotspot provides the preconfigured equipment and the tech support, monitors the gateways, generates prepay cards, prepares system-usage reports and collects the payments. The Québec-based company makes its money by charging users a fee, typically $6 per hour, of which it keeps $1. The landlord gets the rest.

— Brannon Boswell