Data is a differentiator. This is true in many industries, especially commercial real estate. While high-quality data can improve daily business decisions, it can also enable differentiation, innovation and growth in a very competitive and saturated market.
The commercial real estate industry is on the precipice of evolution, as firms begin to leverage data across the organization – from marketing to operations, accounting and brokerage – to make operations more efficient, retain employees, improve the customer experience and provide more revenue-generating services.
While companies have amassed incredible amounts of data, historically, it has been very fragmented across systems, making it difficult to develop an effective data strategy. Read on to learn why CRE firms should implement and sustain a data strategy that drives the business forward and position it for the future.
Improve Decision Making
Real estate investors and brokers alike spend an extraordinary amount of time analyzing current and historic data that influence the decision-making process. Since the real estate market has changed dramatically in the past few years, understanding the shifting trends in geographies and property types keep data-driven companies ahead of competitors.
Data makes it easier to conduct targeted searches, specifically when it comes to finding properties that fit pre-determined needs. In the past, the main focus was on matching potential buyers and sellers, but data can now support pricing decisions and valuation, help increase understanding of capital flows and inventory, and mitigate risk. When CRE leaders have the right data within their grasp, they can uncover new opportunities and be prepared to make smart financial decisions.
Mitigate Risk
All decisions come with some inherent risks, but the power of data allows executives to complete their due diligence and predict what problems may arise before they become issues.
Anyone involved in the CRE transaction process should look to data in order to fully comprehend the potential risks and returns associated with a property. Armed with information, buyers and lessors can more accurately and quickly determine ROI – eliminating a great deal of uncertainty upfront.
Align with Business Strategy
The majority of CRE firms acknowledge that they need to dedicate effort to their business and technology strategies, but they don’t know how to integrate new and existing systems. Taking the time to develop a strategic technology plan that aligns with your firm’s business strategy pays dividends both now and in the future. Integration is just the beginning; everything from smoother communication between departments to greater customer care and smarter predictions about properties can come from a strong IT strategy.
Streamline Real Estate Transactions
Data analytics should be a priority for every real estate company, given the importance and the opportunity it brings. Using information from previous transactions, data gathered from current sources, such as real estate portals, and more, it is possible for an information system to competently offer guidance around the right price to offer, when to negotiate, and how effective certain strategies have been in the past. In this scenario, emotion and bias are eliminated, streamlining the process of decision-making.
Develop a Data Strategy
Collecting data without a strategy can be disastrous. Not only will there be too much extraneous data to analyze, but if it’s inaccurate or flawed, it’s worthless. Data that is collected based on a well-developed strategy is the only data worth collecting, as it can be trusted and turned into valuable information.
One benefit to accurate and strategic data collection is that doing so can fast track time-consuming research. This activity not only results in short-term cost reduction, but can help from an operational perspective, leading to long-term cost savings.
Speak With Us About Leveraging Data to Advance Your Business
Hartman Advisors helps organizations to organize, analyze, integrate and leverage data to support their business goals and serve their internal and external stakeholders. Too often, data is perceived as a back-office, tactical function, when, in reality, it is what strategically drives successful organizations today.
Developing a data strategy requires a holistic view of the complete lifecycle of data, and the people, systems and processes that turn raw data into actionable insights. Reach out to schedule a meeting to learn more about how we’ve helped companies like yours leverage data to drive their business.