5 Steps to a Competitive Real Estate Analytics Strategy

When it comes to using data strategically, commercial real estate lags behind most other industries. This is not due to a lack of data, since numerous companies such as CompStak, Real Capital Analytics, and CoStar provide information to industry participants. Instead, the problem is that no platform goes beyond the individual data points to provide timely, robust analyses of that information. More specifically:

Real estate firms cannot make critical decisions quickly because they lack a platform that contains all of the information they know about properties, markets, tenants, and competitors

The reason for this shortcoming is that the main tool of data storage and analysis in the real estate world is Excel. Although Excel is extremely valuable, flexible, and not going anywhere any time soon, the ways real estate firms store data in disconnected, individually-maintained spreadsheets ensures they will never have a complete, up-to-the-minute picture of the rapidly changing dynamics shaping their markets and strategies.

The solution to this problem is a robust, technology-enabled data and analytics platform. Such a platform would combine all the data a real estate firm possesses and convert it into actionable insights and knowledge. In order for real estate firms to adopt such a solution, there are 5 steps to finding a data-driven analytics platform:

1) Assess data quality and location across the organization:

How good are the comps you get from 3rd party sources?

How many people do you have to ask to get a simple data question answered?

2) Consider untapped data sources:

How do you use the important information gleaned from non-traditional sources?

How often do team members have data they’re unaware would help a colleague with their analysis?

3) Understand common use cases & how much time they take:

If we want an overview of a target market, how many days (or even weeks!) would that report take?

How often does updating a presentation take as much or more time than constructing the original report?

4) Understand questions you WISH you could answer easily:

What buildings and markets are our competitors buying or selling?

How many square feet are in development across all of our target markets?

5) Determine how usable the platform is:

Can the software integrate all sources of information, from spreadsheets to newspaper articles?

From analyst to executive, can everyone use it everywhere, whether they’re on a building tour or in the weekly acquisitions meeting?

Once you’ve asked those questions, you are well on your way to using your data not only for decision-making but to elevating your competitive advantage via the power of analytics.