Wondering how the best-performing Fortune 500 companies structure their real estate tech budget? To help you build your CRE spend based on proven practice, our Tech Advisory experts designed the X-Ray framework. Typically, F500s divvy up their tech spend into four key areas:
1. The Digital Workhorse: Software
- 52% of budget
- Usually costs around $7 million annually
- Think of this as the brain of your tech stack
- Includes tools for tracking leases, monitoring safety and assessing workplace experience
2. The Physical Backbone: Hardware
- 15% of budget
- Annual spend is around $2 million
- This is the muscle behind your tech strategy
- Covers things like rented hardware, occupancy sensors, interactive kiosks and security equipment
3. Keeping the Lights On: Sustainment activities
- 27% of budget
- About $3.6 million per year
- The ongoing maintenance that keeps everything running smoothly
- Includes bug fixes, data updates, and tweaking analytics to match business changes
4. Powering Up Your Tech: Enhancement
- 6% of budget
- Roughly $800,000 annually
- This is where innovation happens
- Funds new capabilities to meet emerging business needs
- Pro Tip: Keep an eye on that enhancement budget. It might seem small, but it’s crucial for staying ahead in the fast-changing world of real estate tech.
Key Takeaway: A CRE tech budget isn’t just about buying software. It’s a balanced investment in tools, hardware, maintenance and innovation to keep your real estate operations running at peak efficiency.