As the world, and the commercial real estate industry, are evolving, the key ingredients for success in this business are as well. With all of this change happening in the industry, one thing remains the same – leveraging your data is the key to finding your CRE company’s “true north.”
Commercial real estate owners must use data to help them make decisions that increase profits. As more groups decide to take advantage of data, CRE firms that don’t adapt are at a serious disadvantage. A recent survey by Deloitte found that over 80% of investors indicated that CRE groups should prioritize adding predictive analytics and business intelligence to their tech stack, which saves time and boosts efficiency. With the cost of activating data at an all-time low, firms that do not leverage this technology are missing out on one of the best ROI activities to date.
We all know the basic formula for success in any business: Make sure you’re bringing in more than you’re dishing out.
Of course, if you speak to any leader in this business, they’ll tell you this is much easier said than done. So much is required to happen within your firm to have continued success. Acquisitions have to occur at the right time and at the right location, selling and refinancing rely on the perfect balance of art and science, and keeping tenants happy requires daily effort.
Historically, the challenge is that commercial real estate shops rely on static spreadsheets and trends to help them decide on which moves to make. This is less than ideal because by the time these metrics are available for use, they’re outdated. This method of decision making often results in “too little, too late.”
Using data to help with decision making is the key ingredient to that success formula. With data, your team has the building blocks to uncovering the best acquisition opportunities at the perfect time, knowing exactly when to sell or refi for the best return, and figuratively reading the minds of tenants to know which decisions you should make to keep them satisfied.
Sounds perfect, doesn’t it? Well, close, but no cigar – let us explain.
Simply having the data to make these powerful decisions is not enough. Without a way to make your data useable and formatted in a way that everyone on your team can understand (not just the data scientists), your data is like a match stick without a spark.
That’s where a data management and analysis platform comes in.
With a data management platform (DMP), your team can turn the data that you already create into valuable insights. These insights can influence the decisions your team makes each day and give you confidence that these decisions are made with the most current data available.
However, not all data management platforms are created equally. Sure, in their most basic form, all data management platforms should be able to do just that, manage your data. But not all of them can extract valuable insights from it, and even less were built specifically for commercial real estate applications.
When choosing a platform to store, manage, and help you analyze your data, you should ask a number of questions:
- What are your specific objectives for data management investment? For every dollar spent on technology, what’s your expected ROI?
- Will a data management platform help you perform more in-depth analysis and automate internal processes? Are you prepared to have technology begin to anticipate your tenants’ needs based upon behavioral data and replace time-draining, manual surveys?
- What kind of data does your organization collect today, and from what sources? Will you collect data from a new source in the near future? (Answering these questions can help you determine the robustness of a solution.)
- What type of data security do you need, and is it a priority?
- What type of services does the platform provide to ensure certain data types remain compliant with ever-changing regulations?
- Who is the user or application the platform was built for? (Identifying solutions designed specifically for the commercial real estate industry can limit any friction during integration, which can decrease onboarding time and increase return on investment.)
While there are many options for data management and analysis entering the marketplace, answering these questions and following these steps will help you find a solution that closely matches your needs.
See how Lobby CRE can address these questions and more! Click here to request a demo.