Real Tech in Real Estate

Stuart Appley updates commercial real-estate company Shorenstein with a cloud-first IT strategy

Armed with a background in both business and tech, Stuart Appley joined Shorenstein Company in 2007, ready to transform what was already one of the most respected real-estate organizations into one even greater, with a twenty-first century technical outlook on commercial real estate.

As CIO of the San Francisco-based company, Appley led IT from a reactive and custom development-dependent organization to one that supports changing and complex business needs, leveraging a “cloud first” strategy to increase IT’s flexibility and scalability.

Shorenstein owns and manages a portfolio exceeding 23 million square feet, and Appley has helped the company keep track of its properties by transfering its IT environment to a predominately SaaS-only application portfolio, while moving to a zero footprint infrastructure.

Appley talks to Sync about how tech is shaking up real estate and the challenges of applying new technology to a traditional industry.

What is your business philosophy as it relates to IT?

Stuart Appley: My philosophy is to engage at the business level to ensure that IT is solving business problems and supporting the growth of the business. I want to make sure that I am tuned in with employees at all levels to stay in touch with our business goals, helping the company be successful by leveraging technology. Additionally, I want to empower my team so they can grow and be successful, while strengthening the organization’s capabilities.

How would you describe your day-to-day priorities on the job?

Appley: It’s always changing. The needs of the business are complex and evergrowing. We are a private real-estate investment firm, so we have the investment management side of the business where we operate in a fund model, always working to ensure our investors are satisfied and getting as high a return as possible for their investments, while also keeping an eye on new relationships for the next fund. Once we buy a property, we improve and manage it, and that’s almost a separate part of the business—a pure real estate development and operational business.

The two are never disconnected, though, as we distribute income to our investors monthly, which is unique among real-estate fund managers. These combined needs are neither simple nor always typical in the industry, which sometimes limits the technology choices available to us. We also embrace complexity as an organization, which is our niche. We are always bringing in new deals, with many of them more complex than the ones before.

“CIOs should be evangelists for change, embracing agility and new ways of getting things done.

The importance of tech in the real-estate industry seems to have grown in the past decade. What changes have you observed as a result?

Appley: Historically, tech has not been as important in real estate as it has in other industries. That’s because it’s a very fragmented and knowledge-based industry. Every owner feels they do things differently than the others, so the vendor community had a hard time selling to the expansive and diverse set of owners.

We have seen a change in the last couple of years where there are a lot more innovative technology solutions coming in, and firms are embracing technology with new ways to engage tenants, prospects, and investors.

I think it took longer in the commercial real-estate industry, but the consumerization of IT is now causing disruption in the industry in great ways. There had been a consolidation among some of the legacy technology players so there is definitely room for new vendors who can bring innovative solutions to the table.

How has the cloud impacted the industry for the better?

Appley: For us, it’s a huge advantage. We’ve been able to leverage the cloud in an ever-increasing way for the last seven years, which lets us focus on what’s core to our business. Our business is not about managing servers or doing unnecessary custom development; it’s about how we get the best deals, how we manage our investments, and how we interact with tenants, investors, vendors, and employees.

We’ve been able to leverage the cloud significantly to focus on the business and spend less time on the operational aspects of IT. I think it took some in the industry a little longer to get on board with the value of leveraging the cloud, but that’s definitely changing. There are still a few legacy technology vendors that also aren’t completely there yet, so hopefully the new vendors coming in will help accelerate this adoption across the industry.

What is your long-term IT strategy for Shorenstein?

Appley: I want to continue to use IT to help grow the business and be able to spend less on the operational aspects of IT, engaging with customers and partners and leveraging technology however we can. That could be the implementation of more cloud-based technologies, emphasizing the importance of collecting and analyzing data to work smarter, working with startups to bring in new innovative ideas into the organization, moving the company into a fully digital business, and enabling the mobile workforce.

What’s a specific initiative you’ve brought to the company that’s helped in this regard?

Appley: One initiative is around fully digitizing and automating the manual processes associated with document generation, approvals, and storage. Culturally, throughout the industry and at Shorenstein, there was an attitude that put an undue significance on a wet signature. It’s a very document- and signature-centric industry, but we’ve all seen how the multifamily and residential segments successfully adopted electronic signatures and work flows many years ago. The efficiencies and time-savings are huge.

Why is it important to you to be a member of both the Consortium of Information System Executives (CISE) and the Realcomm Advisory Council?

Appley: I always encourage anyone in any position to leverage peers for learning and knowledge sharing. CISE is a good example of this. It’s a Bay Area CIO networking group that is cross-industry, and I get the opportunity to engage with some of the smartest and brightest CIOs around, always learning from the others in the group.

We also give back. We work with startups that are looking for CIO feedback and input to raise money every year to fund college scholarships for underprivileged high school students. Realcomm, a commercial real estate specific group, provides a very similar opportunity to network and engage with the other leaders in the industry. Being an adviser enables me to help drive the agenda and topics for ongoing interactions and conferences.

What characteristics and strengths do you see as vital to the CIO of the future?

Appley: The CIO needs to be business-focused, acting as a consultant to the business and always speaking the language of the business. The CIO should be an evangelist for change, embracing agility and new ways of getting things done.

The “I” is not just about information but also integration, helping connect the various systems demanded and brought in by the business. For example, I believe we should be embracing shadow IT, as that typically means the business is engaged with great, business-line-specific products that are solving real business problems. Our role should be to advise and consult with them, shedding light to ensure data is neither duplicated nor siloed, and that security is always taken into consideration.

How will IT continue to evolve and impact the business at Shorenstein?

Appley: There’s a lot more room for data analysis and the ability to leverage information in making informed decisions. We haven’t tapped into the data at the building or portfolio level as well as we could have, due to legacy application and cultural issues, but we’re now making strides into that. There’s also a lot more disruptive technologies coming in for asset management, property management, and building systems.

The Internet of Things also has a growing place, though it has actually been a part of commercial real estate for a while; it just hasn’t been leveraged as broadly as could be. I think there is a lot of untapped potential that can be better utilized over the next couple of years.