In the past, commercial real estate (CRE) leaders have had limited access to real time data when planning future space and location requirements. A business might, for example, plan to hire 100 employees, then acquire the space needed to house those employees. But with the recent emergence of big data, enterprise leaders have the tools to implement proactive CRE solutions that operate in tandem with business goals.
CRE is rapidly becoming a more data-driven industry. The process of acquiring, maintaining and exiting properties is highly focused on the numbers — from the cost to buy or lease to the number of employees a property can house and its annual maintenance costs. But the amount of data CRE professionals can now access has proliferated exponentially. IBM found in 2017 that 90% of all existing data was created in the last two years, with data creation multiplying at an unprecedented pace.
However, only a small percentage of all this new data has been analyzed. The ability to collect, sort and analyze raw data aids in determining occupiers’ ability to make real estate decisions that best serve their businesses and their bottom lines, now and in future years. This requires business intelligence solutions that can quickly convert data to both descriptive and predictive formats, crunching numbers for thousands of variables to offer the most comprehensive analysis of an organization’s CRE portfolio. Solutions like these also allow organizations to work across siloed teams, such as people-planning and finance divisions, encompassing organization-wide data and priorities.
Tools like our Colliers360 business intelligence technology allows our experts to automate the process of data collection across data silos so clients can manage their real estate portfolios on one platform, using precise, actionable insights. And Colliers360 is just one example of how CRE analytics software can transform the decision-making process across an enterprise. In this article, we’ll examine the rapid proliferation of big data in the CRE field, discuss the tools available and why they are necessary for future-looking enterprises.
CRE Dashboards and Analytics: The Basics
Let’s explore the basics of business intelligence systems, why they are spreading so quickly, and more importantly, what exactly they do. Cloud computing, data storage solutions and other technical innovations have enabled quick, affordable data collection and analysis. This phenomenon, in turn, means businesses are in a race to find ways to best utilize data in their decision-making processes.
When CRE data analytics are utilized effectively, they offer real estate managers and leaders a host of practical applications. These platforms can collect and sort through vast quantities of data, including stakeholder engagement surveys, enterprise data, macro-economic and market trends, real estate portfolio details, location information and more.
With cloud storage, leaders can take this data with them for on-the-go access to market insights and portfolio planning, among other tools. The Colliers360 platform, for example, is descriptive by immediately providing a snapshot of total real estate holdings and their performance, but it’s also predictive, by allowing analysts to forecast potential outcomes and create a CRE roadmap for the next three to five years based on market activity, people and resource growth, among other factors.
The challenge with analyzing today’s data is that there is too much data to analyze manually. Analytics solutions turn data — more data than can possibly be processed by humans — into actionable information. The one thing analytics can’t do is make decisions. Instead, analytics enable leaders to make informed decisions.
Why Organizations Should Use CRE Analytics
Why do decisions-makers need to use analytics? The answer is simple: Analytics offer businesses a competitive advantage.
No matter the industry, data analytics help enterprise leaders use resources efficiently to meet business goals. In today’s climate, data analytics are essential for managing CRE decisions. Real estate should be part of a holistic solution for managing enterprise growth. Marrying CRE analytics with business goals can provide a plethora of tangible benefits. Six benefits are listed below, but these are just a few of the many ways data analytics are reshaping the CRE planning for the better.
- Run the real estate organization more effectively. The most tangible benefit of reporting CRE analytics is access through a single easy-to-access environment. When a well-designed, integrated portal provides one source for true cost, workload levels and measures that illustrate how effective your organization is delivering service to your internal customers. The power of the data allows you to assess the savings, efficiency metrics, customer satisfaction and workload levels, as well as reporting on capital and operating expense budgeting effectiveness.
- Optimize portfolio performance. Data points that track how and whether real estate holdings are being used can help business leaders streamline their CRE portfolios. In the short term, data can help plan for today’s challenges. For example, leaders can review every single lease that’s expiring in the next two years and analyze business growth to determine their strategy, whether that is exiting, renewing or executing new leases. Combined with data about the company’s growth, goals and employees, analytics can form the basis for a long-term real estate roadmap.
- Reshape the working environment. CRE portfolio management isn’t just about the spaces on the map, but about what happens in those spaces. Engagement surveys track information about employee productivity, enjoyment, use of space, equipment and other metrics. Many of the ways people feel at work can turn into data, and this data can feed back to the real estate team, who then manages space to maximize employee productivity, engagement and collaboration. Sensor logs and mapping tools can also help teams design spaces that match employees’ actual work patterns.
- Make sophisticated site selections. Data analytics aggregate every factor you could possibly consider when making a real estate decision including available labor, real estate costs, transportation channels and market trends to provide a sophisticated analysis of risk and ROI. Data like this adds clarity to the site selection process.
- Future-proof real estate holdings. How much space will you need in five years? What kind of employees do you want to attract? Where is the labor market headed? With market performance tools and predictive analytics, decision makers can plan proactively for business goals and market trends instead of reacting to market conditions, saving time and money in the process.
- Highly effective form of Customer Relationship Management (CRM). If you are reaping the benefits of points one through five noted above, then you will gain the confidence to lead evidence-based discussions with the business units you serve. The most effective form of CRM is bringing proactive ideas and opportunities to your internal partners. Being empowered with the analytics to help a business unit understand how they can reduce costs, identify better growth markets or illustrate how they are performing relative to other business counterparts or company benchmarks, allows you to set priorities and plans outside of traditional lease expirations.
We are moving from data-supported businesses toward data-centric businesses. Analytics tools must be in the forefront for the future-looking enterprise and are just as important for managing your real estate portfolio as for guiding important business decisions. Strategic real estate planning not only benefits your bottom line, but also positions your firm to successfully meet your unique business goals.
Data analytics offer the most holistic basis for smart, future-thinking decision-making about your CRE portfolio. With real-time visibility, clients can develop customized strategies to make informed business decisions.
Next, we’ll examine the evolution of dashboards and analytics in mobile environments and the growth of automation in areas including client feedback surveys.
About the author:
As Senior Vice President, Technology Services, Linda White is responsible for direct leadership of the Corporate Solutions Technology Services platform and is accountable for overall client service commitments and continued development of the Colliers Business Intelligence platform.