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Data has made its way into almost every aspect of our lives, and real estate has not gone untouched. Whether it’s negotiating a lease or evaluating a ground-up development, the data used by real estate firms has become a crucial driver of their business decisions.
However, real estate data is no longer limited to lease comparables or historical building information. An expanding universe of real estate data is rapidly changing how firms analyze their real estate decisions, providing a significant competitive advantage to the firms that can adopt these new types and data sources.
Property level data
Property-level data has historically been one of the most common data types in the real estate world. For example, most asset managers know how many vacancies their properties have and how much money was spent on the most recent remodel. While this information is great to have, it doesn’t tell the whole story, leaving a lot to be desired.
The movement toward smart buildings has introduced new opportunities for asset managers and property owners to collect real-time, accurate data about their properties that can help answer several questions that were once difficult (if not impossible) to answer.
The use of intelligent building systems, for example, allows for the creation of data related to energy usage and the potential for optimization across an entire property. Smart HVAC systems can automatically adjust temperature settings to improve tenant comfort while simultaneously conserving energy. Space occupation sensors can track the usage of spaces throughout the property to aid decisions on maintenance and janitorial services. The data provided by these systems can be compelling for property managers interested in pursuing ESG initiatives, arming them with the data required to understand a property’s environmental footprint, and for leasing teams hoping to use a building’s intelligent systems as a way to attract and retain tenants.
The revolution in property-level data isn’t limited to the physical space either. Asset managers across the country have started to adopt third-party management databases that allow them to create and track data across an entire portfolio. These systems can move data out of spreadsheets and into a unified database, enabling firms to track every aspect of the leasing process, from an initial inquiry to a signed lease. Keeping these step-by-step, detailed records of the negotiation process allows firms to better understand a property’s performance and how the leasing process can be improved moving forward.
You can’t improve what you don’t track, so paying closer attention to collecting detailed, accurate property-level data has become an important initiative for many real estate firms.
Building User Data
A new subset of real estate data quickly gaining popularity is data on a building’s users and potential users. Technologies created for purposes outside of the real estate industry are finding a niche amongst real estate firms looking to better understand their buildings’ users.
Cell phone data is the most popular and widely used category of data, mainly because most of us carry a cell phone every day. Our cell phones, and the apps we use on them, record location data throughout the day. That location data is then sold to third-party data providers that anonymize the data and package it for sale to end users. This data, as “Big Brother” as it may feel, can be invaluable for making real estate decisions. Anonymized cell phone location data can tell a firm how many people visit a property each day but where they come from, where they go during lunch, where they go when they run errands after work, and where they go home at night. Cell phone data is an excellent option if a real estate firm wants to understand who uses their buildings.
Another equally granular method of analyzing building user data is through credit card transaction data. Like cell phone companies and apps, credit card providers track (and often sell) the data related to the spending habits of their users. This data can be a powerful way for office landlords to decide which amenities their tenants would use the most. Credit card data can also be beneficial for landlords of retail properties looking to give their tenants insight into the spending habits of potential customers. Though most of this data isn’t specific enough to tell a landlord how much its tenants on the third floor spend on coffee each month, it can still paint a picture that would be impossible to achieve without it.
Another helpful (although not quite as all-encompassing) type of data is access card data provided by a building’s security system. This data can help paint a useful picture of who is accessing a property and when. An excellent example of this data’s insights is Kastle’s Back to Work Barometer, which tracks the occupancy of office buildings across ten major metros. If a real estate firm could collect a similar level of data across its own portfolio, it could properly understand how its properties are being utilized.
Real estate is a marketing-driven business. More robust data is opening new avenues of competitive advantage for firms able to capitalize on their team’s marketing efforts. Similar to the leasing process and smart buildings, a firm’s marketing initiatives can create vast amounts of useful data that help drive business decisions.
Most companies at this point use some type of customer relationship management (CRM) system, often adopting advanced third-party software. These CRM systems can track website views, email open rates, and form submissions, all of which are usually relayed to the company’s sales teams. Monitoring and analyzing this type of data can allow a firm to optimize its marketing and sales strategies, focusing its efforts on the tactics that work and changing course on those that don’t. Property companies can hone their outreach by tracking what clients engaged with or responded to certain marketing offers by only sending relevant communications to interested parties.
Social media data is also becoming an increasingly popular means for real estate marketing departments to collect and act on data insights. Social media companies make their money by selling user data to advertisers, giving real estate firms yet another avenue to narrow down their target audience and fine-tune their decision-making. Firms can focus their marketing efforts on specific industries, geographies, and companies while collecting additional data on open rates and the monetary value of marketing efforts in the meantime.
At the end of the day, the more accurately a real estate firm can understand its environment and specifically target its ideal customers, the more competitive the firm will be. By integrating the expanding universe of real estate data into their business decisions, asset managers, property owners, leasing teams, and more can make better, more educated business decisions than ever before.