Real Estate Data is Dead — Long Live Real Estate Data!

In times of market uncertainty, the value of some real estate data plummets, while for other sources, the value skyrockets. How can we distinguish between which types and sources of data will be most valuable during times of market uncertainty?

For traditional sales and lease comps, values dramatically diminish because the market disruption limits the informational value of any comp from the prior month, let alone the last quarter or last year. To put it bluntly, you can throw out almost any sale or lease comps you have from the prior 12 months. Intensifying this situation is the fact that uncertainty prevents many new sales or leases from transacting, thus limiting the information that could inform your acquisitions or leasing strategy going forward.

It is precisely this relative dearth of accessible information that dramatically increases the value of the data that are available. Any data point or anecdote you can find and extract improves decision-making and becomes exponentially more important. A few recent sales transactions might indicate what buyers are willing to pay, even with the reality of an ongoing pandemic. For example, Hines Global Trust recently purchased a portfolio in Silicon Valley for $107MM.

On the other coast, Alexandria purchased a portfolio in Suburban Boston for $330M. In terms of leasing, Netflix recently signed a 170K sqft lease in Burbank. While many deals have fallen out of contract as a result of pandemic-induced uncertainty, the deals that do close are significant and, in many cases, serve as the only indications of current or potential future value.

Yet it is not only signed deals that are valuable sources of data. In fact, the inverse is often the case: deals that blow up can provide extremely valuable information, as well. For example, Pinterest recently pulled out of a future 500K sqft lease in San Francisco. In the retail world, it’s becoming a near-daily occurrence to hear about massive store closures in the retail space (see Ascena, JC Penney, and many others).

The organizations that turn this real-time, live information into actionable insights will have a leg up as they modify their acquisitions and leasing strategy to take into account the ebbs and flows of tenant demand that are not captured by traditional sale or lease comps.

In a rising market, traditional real estate data help organizations make acquisitions, leasing, lending, and development decisions. But when a crisis emerges and viable traditional data sources dry up, only firms that can parse the signal from the noise of numerous, disconnected data sources will be able to actively capitalize on uncertainty roiling the markets and chart an informed, data-driven path forward.

With Predictre, your real estate organization can capture, consolidate, visualize, and analyze all of the high-value, real-time data that is poorly aggregated it and unlock insights that would otherwise go undiscovered. If you’re interested in mastering your markets, we look forward to hearing from you at info@predictre.ai.