Commercial Real Estate has always been, and will always be, an information-driven business. For example, we’ve always known that law firms often want offices near the courthouse and that creates a submarket that operates somewhat independently from the metro area at-large in terms of pricing and demand.
The big shift that the industry is making now is the drastic reduction in the investment, both financial and time-wise, of gathering information about the market and the ability to make real-time analysis – and thereby getting a competitive edge. For example, with data analytics, we can determine the borders of a submarket built around, say, Google’s offices, and help your client find a pocket right by where they want to locate that is at a discount to the submarket.
In other words: we’re shifting from using data to support pre-determined intuition and opinions to using it to develop opinions.
How Real-Time Data Will Give You a Competitive Edge
Right now, one of the biggest advantages real-time data gives you is being ahead of the pack. If you can analyze what was happening yesterday while everyone else is looking at data from last month, you can see the trends before everyone else and use that information to your clients’ benefit.
One of the first aspects we’re seeing CREs capitalize on is with comparables. Seeing actual recent transaction prices and cap rates rather than just the numbers publicly bandied about gives you better information to act on. This in turn enables you to let your clients know if this deal is a steal or if it’s better to pass as it should be lower in a month.
It can also help with site selection. If your client is looking to expand their office, you can use data on where current employees live and find the ideal location to minimize average commute times. You can then collate that data with current market prices and find the location that allows them to maximize productivity at the lowest lease rate available.
The Door is Open…But the Window is Shrinking
As we enter 2018, there is ample opportunity to grow your market share by having better information, and at a lower cost, than the rest of the industry. But that opportunity will fade and turn into a necessity.
There are 5 stages of technology acceptance: innovators, early adopters, early majority, late majority, and laggards. While CRE is still in the innovator/early adopter stage for using real-time data, the adoption rate will continue to grow quickly. There is still significant value to getting onboard now, but waiting 12 months could be forcing yourself to play catchup.
At RealMassive, we’re working to keep you ahead of the competition. Find out how by signing up for a demo today.