Data-driven Success in Commercial Real Estate
In an increasingly competitive commercial real estate (CRE) market, the importance of data cannot be overstated. It serves as the bedrock for informed decisions. This includes everything from property valuations, market dynamics, tenant preferences, and an array of influential factors. By implementing effective data collection and analysis now, your organization can usher in a new era of intelligent decision making including, but not limited to, artificial intelligence (AI).
In order to collect, analyze, and act on your data, you need a solid data and analytics strategy in place. One that allows you to quickly identify prime investment opportunities, accurately set property and lease prices, and skillfully manage portfolios by comparing performance against forecast, budget, and year-over-year (YOY) change. To help you get started, we’ve outlined 7 pillars for a comprehensive data strategy.
1. Business Objectives and Alignment
Identify your business challenges and establish objectives over a period of time. Once you’ve received org-wide agreement on these objectives, you need to develop metrics to measure performance. These could be things like the information you can use right now (outputs), the methods you use to reach your goals (activities), the assets you align to your goals (resources), or any other information you should gather.
2. People Alignment
Your organization doesn’t become data-driven by simply acquiring and using technology. You need the right people–in the right positions–to ensure org-wide adoption of your technology and its associated processes. It’s also important to assess the skill sets of your team members and develop programs to upskill as needed.
3. Data Maturity Assessment
Conduct an audit of your existing data assets to better understand what data is available within your organization. This helps you identify data gaps that need to be addressed to better support your business objectives. This also informs the granularity of data that’s available to help build your key performance indicators (KPIs).
4. Data Governance
In the CRE industry, your organization handles sensitive client, property, and financial data. Data governance policies are essential to maintain data integrity, security, and compliance with relevant regulations and standards (e.g. GDPR, CCPA). It also mitigates your risk associated with data breaches or non-compliance.
5. Technology Stack
Your organization likely uses a variety of data sources such as Salesforce, Yardi, MRI, VTS, LoanBoss, ProCore, and Placer.AI among others. It’s important to select the right data analytics and visualization tools to integrate data across existing applications, and ensure there’s alignment to your organization’s objectives and long-term vision. Tools like Snowflake, Azure SQL, Tableau, and Microsoft Power BI can be used to enable insights at scale.
6.Proof of Concept (POC)
Digital transformation is not accomplished overnight. It’s often best to start with a small POC to validate the effectiveness of your proposed data and analytics strategies, and provide insight into their feasibility and potential value. Based on the outcome, you can make adjustments before you scale initiatives across the platform. For example, start by building out a simple property management dashboard to provide your team with a current state analysis. Then, you can scale to more complex and complete analytical use cases.
7. Continuous Improvement
Encourage a culture of continuous improvement. Learning about data and analytics is vital for an organization’s long-term success. As data technologies, business needs, and markets evolve, your organization must remain adaptable and responsive to new opportunities and challenges.
Whether your organization is brand new to data strategy or you’ve taken the first couple of steps to gain alignment, our team of data and analytics experts is here to answer any questions you may have.