Big Data’s Big Potential for Commercial Real Estate
Mining stored information for business intelligence is not a new idea. So why is the concept of big data different? We have seen an exponential growth in specific, commercial real estate industry-related information being generated by third-party sources, including a new generation of firms focused on collecting and analyzing market data, and by unstructured sources, such as social media.
Layering these facts and figures on top of a company’s enterprise accounting or transactional records, and then digging deeper to reveal new trends and opportunities, distinguish the concept of big data.
As a case in point, Motionloft uses sensor technology to provide real-time pedestrian and vehicle traffic statistics and analysis. A property owner looking to lease the ground-floor retail space of a building in Midtown Manhattan can mesh Motionloft traffic detail for that particular address with the wealth of property information already stored in its accounting system. This layered data can then be used to strategically match the space to appropriate tenants and to strengthen the associated marketing materials.
In terms of “unstructured” data revealing business opportunity, property owners and operators may spot opportunities by monitoring leasing trends in their own portfolios, and by staying on top of hot topics in the news, social media outlets and online forums.
For example, the recent surge in the shared office space sector has translated into companies in this niche leasing large offices, dividing it into small units, and renting space to startups and sole proprietors with bundled-in phone, administrative and other services. By observation, landlords are recognizing the growing demand in this sector, and many are looking at their portfolio availabilities in a new light. Several household-name property owners are setting up their own shared office environments and working directly with companies seeking this type of accommodation.
In another illustration, IBS clients using our Imperium Powered by Acumatica lease management/accounting software can now get real-time insights from their data by connecting through Microsoft Power BI. Imagine asking for opportunities by expiration or by square footage or by region – or by a combination of factors – and getting the answer in an interactive visualization. Power BI lets users ask questions in natural language and get the answers in meaningful, specific and powerful forms. The drag-and-drop canvas in Power BI enables users to find and highlight elements that are important to them, and then author reports by choosing from a broad range of modern presentations.
Of course, like every organizational process the use of big data as a business intelligence tool should be managed appropriately. This raises the importance of “data governance,” which encompasses the people, processes and technology required to create consistent data across the business enterprise. A company’s data governance program goals might include:
- Increasing consistency and confidence in decision making
- Decreasing the risk of regulatory fines
- Improving data security
- Maximizing the income generation potential of data
- Minimizing or eliminating re-work
- Optimizing staff effectiveness
- Establishing process performance baselines to enable improvement efforts
What is this really all about? Information resources have not only grown, commensurate with technological advances, but they have become more widely accessible. Major corporate players with deep pockets for years have invested in bringing data together to their advantage. For the rest of us, our files have been filled with lots of unrelated, unstructured information. Trying to condense that down into meaningful business intelligence has been overwhelming – at best.
Today, however, an array of cost-effective tools is leveling the playing field. These applications can reach into our existing systems and across the Internet to extract and distill vast, disparate data points into meaningful information for companies of all sizes. In turn, those findings can be leveraged in strategic planning and timely business decisions.