If your corporate real estate team hasn’t implemented a data analysis strategy yet, chances are you’re in the planning phase or at least beginning to consider how data can be used to improve portfolio performance. Year after year, as more information is gathered from more corporate real estate data sources, CRE data becomes more valuable. What can be learned today goes well beyond the basics so that deep insights and more accurate predictions can be made.
Most corporate real estate teams fully understand how important CRE data is during the decision-making process, but they aren’t sure what data is most relevant to the organization. It’s understandable given the vast selection of metrics that can be measured these days. Corporate teams are smart to address this upfront because determining what corporate real estate data types should be tracked is one of the first steps in successful analytics that makes decision-making easier and more efficient.
Some would argue that CRE data is just as valuable as the property itself when you’re buying and selling real estate. Without the data, an investor is essentially flying blind and going off their gut. That may work in some situations but isn’t a winning strategy over the long term, especially when competitors understand the importance of corporate real estate data analytics.
But CRE data analytics isn’t just about deciding which property to purchase or when it’s the right time to sell. There are two other key benefits: faster decision-making and maximizing the value of a property while lowering costs.
Time is money in real estate. In some markets, you must act quickly if you want to seal the deal. Having reliable data helps to speed up the decision-making process.
Data is unbiased, and it takes the guesswork out of decision-making. With the right CRE software the data is visualized for you in such a way that observations are easier to see, risks are easier to measure, and the market value of a property is easier to determine.
Property data analysis is growing by leaps and bounds. Buildings can be outfitted with an array of sensors that detect the activities of equipment and people as they move around the property. RefineRE’s Workplace Analytics solution is a prime example of this technology in action. It gives you a different perspective of a building and the capability of monitoring it 24/7. That helps corporate real estate teams identify how operating costs can be reduced, what risks to look out for, and how to create spaces that are highly functional for your ideal tenant or your own team.
To gain all the benefits of CRE data analysis you have to choose the right metrics to measure and track. Every organization is going to have a different combination of metrics based on its unique business goals and portfolio. However, there are some main types of commercial real estate data that are beneficial for all corporate real estate teams to analyze.
Demographics tell you about the people in an area, which can have a huge influence on the potential value of a commercial property. You can get a look at who currently lives, works, or visits an area, but there’s another reason to track demographic data. It can give you an idea of how an area is changing or growing.
One of the most common pieces of demographic data is the area’s population. Other things to take into consideration are demographic factors like average household income, median age, average home value, and rental versus ownership rates. You’ll also want to pay careful attention to how many people are migrating in and out of the area as well as the amount of new construction.
Investing in commercial real estate isn’t just about understanding the value of a property and buying right. Investors, portfolio managers, and corporate real estate teams need market data to understand an asset class in the local area.
When you are looking at market data you are analyzing:
● Economic strength of a market
● Socioeconomic factors
● Supply and demand in an area
● Access to capital
● Local zoning and permitting
A lot of outside forces can impact the value of a property, and many of them can be analyzed by studying the market data.
You’ll want to drill down further into the market data to look at the stats on commercial properties as well as for specific properties. Like transaction data, property data is a metric that corporate real estate teams have been analyzing forever, it just used to take a lot more effort.
Commercial property data includes:
● Lot and building size
● Asset type
● Renovation dates
● Number of units
● Legal description
● Assessed land value
Corporate property data is essential for determining value which helps identify new investment opportunities and leads.
Transactional data has long been one of the most important corporate real estate data types to track. This type of CRE data is related to the sale or leasing of commercial property. It includes:
● How much a property sold for last
● When it was last sold
● Who sold and bought a property last
● The price per square foot
● Sales history for the life of a property
● Mortgage and lender information
● Rental rolls and leases
Investors are far from the only people using transactional data. Builders use it to determine the potential sales price on a finished project. Appraisers use the transactional data of comparable properties to determine market value. Lease terms can be used to figure out when a tenant should be approached about renewing their rental agreement. Transactional data can even be used for marketing purposes.
Who owns the property that you’re interested in? And how long have they owned it? Do they own other properties? These are important questions to answer if you’ve identified a property that you want to possibly purchase. Along with finding out who owns a property you can also figure out how to contact them to get a conversation started.
Just a few years ago, carbon impact was not something that many investors concerned themselves with. Today, it’s a different story. Due to changes in state and federal regulations, rising operation costs, and public concern over climate change, carbon impact is now a type of corporate real estate data that savvy investors are monitoring. Interested in putting it into practice? RefineRE’s ESG module helps organizations measure the cost to carbon neutrality. For example, in certain areas, carbon impact could be a determining factor for top-quality tenants because their own clients prefer to work with eco-conscious businesses.
Another metric that has become integral in many CRE submarkets is how the workplace is utilized and by whom it is used. The Internet of Things (IoT) has opened the doors to a whole new set of workplace statistics that inform owners about the best and highest use of their property. Sensors can be set up to gather utilization data on how spaces are used, who uses them, and when they are used.
With a tool like RefineRE’s Workplace Analytics module, you can also measure the costs associated with vacancies and incorporate labor market statistics. It’s data that helps organizations get the most value out of every square foot.
Where is the aggregated information coming from? How timely is the information? Corporate real estate data is only valuable if it’s accurate and up-to-date. Tracking data that’s inaccurate or dated can actually do more harm than good when you’re making CRE investment decisions.
This is why investors and portfolio managers have to choose their CRE data solutions and sources carefully. Corporate real estate teams use a variety of sources to piece together their internal database. Some common real estate data sources include:
● Local tax records
● Local permit records
● Public property record search portals
● CRE professional and broker databases
Knowing where to find real estate data is one thing. Gathering the data, exporting it, and integrating it into an internal database is another. This is where a CRE software solution comes into play. Not only can it be a good source of information, but CRE software also makes data analysis possible even as data sets grow.
RefineRE has proven to be the most accurate and reliable resource for corporate real estate data analysis. Our CRE data analytics platform was designed specifically for corporate real estate data in an effort to provide CRE investors and portfolio managers with industry-specific solutions that can’t be found anywhere else.
The RefineRE platform brings all of your CRE data into a single place where it can be comprehensively analyzed and easily managed so that no valuable information is lost. All of the core metrics that are most important can be seamlessly measured, tracked, and analyzed using the RefineRE CRE data software. Even better is RefineRE eliminates the guesswork by identifying the key metrics for you. It’s a highly compatible platform that can pull in information for just about any third-party corporate real estate data source.
No matter what types of real estate data are most important to your team, a resource like RefineRE is needed so that you aren’t just gathering information. You’ll be able to make use of it and put data aggregation on autopilot so that data analysis becomes a regular part of the decision-making process.
See our CRE data solutions in action. Contact us for more information on how the RefineRE platform can work for your business.