Dealing With Delays and Inefficiencies in Real Estate Development
Over the past several years, spikes in construction material and labor costs have made it increasingly difficult for commercial real estate investors and developers to keep their projects on track, creating a landscape where more than 70% of development projects fall behind schedule. But even before these current challenges arose, real estate development was an extremely fragmented industry, and it has long been challenging to oversee the wide variety of vendors and timelines for each construction project. As such, without a centralized system to manage and record all incoming project data, the information investors and owners have access to is typically outdated and inconsistent, making it difficult for equity partners to gain a true, real-time understanding of where active projects across a portfolio actually stand.
Between interest and other costs, a typical institutional development project can lose millions of dollars per month of delay. Because of this, there is growing demand within the industry for solutions that not only provide investors with increased transparency into how an active development is performing in real-time but also arm them with the proactive insights needed to avoid delays. Access to this type of data is even more imperative for large funds and investors with numerous projects running in tandem, for which even small delays could result in tens of millions of dollars lost.
Enhancing Transparency and Minimizing Risk
As the building and construction industry continues to grapple with issues stemming from rising costs and fragmented data, RET has set out to identify solutions that provide stakeholders with much-needed visibility into active development projects, helping them keep these projects on track while further informing future decisions regarding the development process. It is this objective that has led us to our most recent investment in OnsiteIQ.
Built to help real estate investors improve job site transparency and manage risk throughout their development portfolios, OnsiteIQ serves as a single source of truth for stakeholders by providing a centralized platform where institutional investors can document projects, monitor progress, and verify payments. The platform’s network of ‘capture specialists’ regularly walks its clients’ construction projects to capture 100% of the job site with 360-degree videos, which are then automatically mapped to each project’s floor plans. This creates an objective, consistent, and comprehensive record of all active projects within a portfolio, which users can instantly access and monitor from any device, anywhere.
OnsiteIQ then analyzes the visual data captured by its team and leverages artificial intelligence to track progress across 18 major project milestones, delivering status updates, identifying patterns of inactivity to predict potential delays, and creating trend reports across an entire portfolio. The platform is particularly valuable for developers, equity partners, and lenders with geographically dispersed developments, who have previously struggled to gain visibility and access a holistic dashboard of accurate status reports for their entire portfolio.
The Future of Construction Intelligence
OnsiteIQ has seen significant growth since its founding in 2017 and is currently being used to monitor construction projects across a wide variety of property types in more than 65 markets throughout the United States and Canada. To date, the company has captured over three billion square feet of 360-degree project footage, monitoring over 1,600 projects valued at a cumulative $17 billion, and OnsiteIQ counts several of RET’s strategic investor base among its users.
As avoiding project delays grows as a top priority for investors and developers, it is clear that OnsiteIQ will continue to prove itself an indispensable solution and save stakeholders millions of dollars in avoidable losses. We look forward to supporting the company as it refines and expands its core product offerings in the coming years and further solidifies its position as an industry leader.