In the coming years, it will be possible to access mountains of aggregated market data and do real-time valuations for industrial, retail, and office properties, and buildings will be traded online the way that stocks are traded now. That is the world envisioned by a panel of real estate information technology providers at ULI’s 2015 Fall Meeting in San Francisco, and they expect to see it happening in the next few years, thanks to IT innovations of the sort that have reshaped other industries.

“We still think using Excel is technology in real estate,” joked panel moderator Dan Spiegel, an executive vice president of real estate services provider Colliers International. But he and other participants were serious when they noted that many in the industry were still relying on outmoded IT infrastructure, such as custom-built legacy software that requires in-house engineers to maintain and has limited ability to interact with other programs. Worse yet, important market data too often still reside in desktop silos, where it cannot easily be accessed and analyzed. According to Spiegel, the industry “has yet to see real transformation.”

“We’re the last massive industry that can’t tell you how long it takes to get a deal done,” said Brandon Weber, founder and chief executive officer of Hightower, which markets a leasing management system that brings together deal tracking, financial analysis, and analytics in an integrated software platform.

Attendees at the ULI Fall Meeting in San Francisco learn about new startups in the ULI Tech Hub.

Attendees at the ULI Fall Meeting in San Francisco learn about new startups in the ULI Tech Hub.

The panelists acknowledged that one reason evolution has come slowly is that people in the real estate industry have been so successful with traditional low-tech methods and existing business models that there has been a disincentive to change. Bad experiences with past generations of costly, user-unfriendly software and systems that did not deliver the promised value also have stuck in people’s minds. “I think the number-one fear is fear of parting with their money,” said Michael Mandel, cofounder and CEO of CompStak, a private network that allows subscribers to anonymously share and gain access to pricing information.

Mandel noted that real estate companies reinvest just 0.8 percent of their revenue in information technology—a tiny amount, compared with the 4 percent spent by the financial industry. As a result, he says, real estate professionals are making deals more slowly, and missing out on vast amounts of income. “If you’re managing your deal flow through spreadsheets, and your space takes a month longer to lease than it should, you’re not looking at things the right way,” he said.

“If we can take the complexity out and make transactions go faster and happen more cheaply, there’s going to be a dramatic shift,” Mandel said. Like a dam where waters have been gradually rising to the top, “the pressure has been building up behind it.”

Panelists said that new IT tools have the potential to usher in an era of vastly greater transparency, both within enterprises and across the marketplace. “When the market knows what the pricing is, that’s when deals get done,” Mandel said. “The landlord, the tenant, and the broker are all happier, instead of feeling like someone is taking advantage of them.”

Mark Gilbreath, founder and CEO of LiquidSpace, an online marketplace that connects startup companies that need office space with bigger outfits that have unused capacity, noted that online leasing will also standardize agreements, eliminating the need for costly legal reviews of the documents.

Ryan Masiello, cofounder and chief revenue officer, VTS, a provider of cloud-based portfolio management services, said that achieving greater transparency is a must, because of the ever-increasing flow of institutional money into the real estate business. “In the past, you could take days or weeks to answer simple questions,” he said. “That is unacceptable in 2015.”

As more and more people in the industry gather and share data, they will be able to use analytics to see new ways to monetize the business, panelists said. “You might think that you can’t trade a property online the way that you trade a stock,” Mandel said. “People say that you have to walk a building. But [publicly traded] companies are more complex than buildings.”

Gilbreath envisions the development of more and more ways to break off parts of business and sell them to investors, akin to the complex derivatives developed by Wall Street. Technology will help the industry “to squeeze more dollars per foot out of what has been a glass ceiling for a long time,” he said.

In the past, real estate software often required extensive training and hand-holding by consultants to use, which was a deterrent to getting users to buy in. With that in mind, the latest generation of tools features interfaces designed to be figured out intuitively, according to Gilbreath. “What we ask ourselves is, ‘How can you make more like this?’ ” he said, holding up his smartphone. “You don’t need a manual for this.”

Another major improvement in real estate software is the ability to recognize patterns and predict the correct answers to questions, which eliminates the problem of incorrectly entered data that plagued previous generations of systems. “Garbage in, garbage out doesn’t really exist anymore,” Mandel explained. “We use machine learning to make decisions and clean up data. If one person enters ‘Google’ as the tenant name and another one uses ‘Google Inc.’ or even mistypes ‘Goo,’ we can cope with that. It makes life easier.”

Another advantage of the latest generation of IT tools is that they have been built using an open application programming interface, or API, Weber explained. That allows products made by different companies—Hightower and LiquidSpace, for example—to communicate, so that information can be shared between them. That capability gives a real estate company more flexibility in using whatever tools are best suited for its business.