So what should commercial real estate companies do now? The report suggests turning to technology. "Companies can capitalize on the slower business climate by engaging their key application users to review the effectiveness of their current application suite," it notes.

Scott Metro, a partner in the Real Estate Systems and Process Assurance unit at professional services firm PricewaterhouseCoopers, identifies spreadsheet replacement software as a specific area of interest. Metro says many real estate companies are installing sophisticated software to shore up data security and flexibility--and resolve what he calls "spreadsheet overload." Metro predicts spreadsheet replacement software will become increasingly important to commercial real estate professionals in 2008 and 2009 as they seek competitive advantages in a softening market.

In a PricewaterhouseCoopers report on technology trends for 2008, Metro notes that real estate companies use spreadsheets to store vast amounts of information, as well as forecast property performance and create models for acquisition financing. "In fact, it is not uncommon to find that Microsoft Excel is used to maintain a quick reference list of properties and their key attributes," he adds.

But he says Microsoft's Excel, the most common spreadsheet software, pales in comparison to some of the newer applications. "Compared to most real estate applications, like accounting and property management systems, spreadsheets are poorly controlled. It is cumbersome tocontrol unofficial copies of analyses, determine who made changes to files and/or find out whether any of the links that bind multiple worksheets together have been broken or corrupted," he says.

Spreadsheet replacement software allows companies to track changes in a spreadsheet and select the people authorized to alter such things as budget numbers, rental rates and income forecasts. The software also consolidates scattered bits of information and gives companies the ability to dig deeper into data to analyze, for instance, the construction expenses for a mixed-use project.

"The first time you see these and see what they can do, there is a 'wow' factor," Metro says. "To suggest that spreadsheets can be replaced with specific applications is infeasible and, in many cases, imprudent. The flexibility of such tools allows users with varying levels of technology expertise to quickly run complex analyses."

Real estate companies now are in the early stages of large-scale adoption of spreadsheet replacement systems, Metro adds. Many companies are implementing tools that work almost exactly like spreadsheets, or even some that are, in fact, spreadsheets with special "add-ins"

"But they're much more controllable and offer better audit trails than traditional programs," he says. SAP Business Planning and Consolidation (formerly known as OutlookSoft) and Infor's Extensity are two examples of software tools that look, function, and have the flexibility of spreadsheets, but with tighter controls and audit trails.

Real estate companies are embracing the new software to stay ahead of the competition. But there's another reason, Metro speculates: "The market has slowed, but many companies are optimistic it will turn around relatively quickly. They don't want to lay off staff, so they're tackling projects that they were probably too busy to do before, including reviewing their technology."