As if big competitive industries weren’t complex enough, the global pandemic turned the commercial real estate industry on its head. For real estate agents, brokers, and investors, the recent residential real estate market freeze caused both buyers and sellers to go into a state of panic.
To provide stability for both residential and commercial real estate trends and performances, everyone looked to data analysis. Today’s world has become dominated by technology, and commercial real estate companies are no exception. Rob Finlay, founder and CEO of Thirty Capital, understands this more than anyone.
Commercial real estate (CRE) advancement companies similar to Finlay’s are looking to technology to streamline operations and generate a greater profit for investors. Here’s how the big world of data analysis and technology has affected CRE investment opportunities:
Predicting Market Trends and Consumer Behavior
“Data analysis isn’t just about reacting to trends; it can also be about predicting them,” Finlay explains when discussing the benefits of data analysis. “Using this technology to predict consumer behavior and market trends is revolutionary in and of itself, and people have to take advantage of that.”
From supervising home equity and tracking mortgage payments to corresponding that information with the age of a home and how long the owner has lived there, data analysis can help agents focus and examine upcoming trends. Such data can be used to recognize when someone is preparing to sell their house, as well as analyze new leads in the commercial real estate market.
Even keeping track of income levels and employment shifts can help brokers and investors predict where forecloses might be on the horizon. This can further help them determine areas where prices might rise or fall, and how to attract certain clients to a new opportunity.
Growing the Industry and the Use of AI
For decades, human beings have been studying the science behind artificial intelligence (AI) and how to utilize its power in today’s leading industries. Understanding these benefits can prove to be profitable for your commercial real estate company.
Deep learning, or a subfield of machine learning involving the brain’s artificial neural networks, has massively contributed to the expansion of AI. In the world of technology, AI development is an incredible human achievement.
Predictive analytics are being combined with other analytical tools to make an accurate decision regarding investment methods. For example, portfolio managers can analyze consumer behaviors to determine potential home buyers or sellers in a certain area.
AI also features the benefit of analyzing a large amount of information while eliminating human bias. By incorporating AI into investment methods, commercial real estate now has a competitive edge in the market.
CRE’s Refusal to Use Data Analytics
If there are so many benefits to using data analysts, then why are so many CRE investors refusing to use it? Some investors are simply unaware of its extensive benefits, or how to even use it within their company.
Researching and gathering can take quite a bit of time, and company superiors might find that the market-related data doesn’t meet certain specifications. Furthermore, they might deem the time and effort it took to obtain this data is pointless.
In other cases, managers and investors might not have the means to examine and study the data. It does take a great deal of work to effectively analyze the data and verify it, then, further determine if it even fits applicable to their investment process.
Some managers believe data analysis tools are not worthwhile and subsequently choose to skim over the data instead of analyzing it to the extent they need to. Additionally, obscured data can present problems and change the potential assessments on return on investment (ROI).
How CRE Companies Can Use Data Analytics Today
Shifting a culture within an already established industry can be quite difficult, and it’s easy to see why real estate brokers and investors might be skeptical at first.
Such a change requires a certain level of cooperation and communication, and you can’t expect everyone to understand. To convince an entire organization of its benefits, leaders of that organization must promote the idea of new data analysis.
“At Thirty Capital, we understand just how crucial of a role technology and data analytics can play in the field of commercial real estate investing,” explains Finlay. “Our team of professionals works to combine that type of revolutionary technology with our experience to help our clients grow their profits.”
Incorporating AI, for example, is just one way to up the ante in your investment strategy, and commercial real estate investors should be able to community that effectively. While many might think AI is just a fancy way to automate specific tasks, understanding that obtaining a data-driven mindset is essential to the future success of an organization.
If investors aren’t placing enough emphasis on data, organizational cultures can’t successfully take advantage of this technology in a way that’s beneficial to the company.
The Age of Innovation
A few years ago, CRE brokers and agents spent a considerable amount of time researching and evaluating properties and market trends to accurately answer inverts and buyer’s questions.
But today, companies like Thirty Capital are learning how to utilize data analysts to their advantage. “Now, with these new innovative methods of data analysis, we can significantly save time, money, and simplifies the process altogether,” says Finlay.
This allows agents to draw their attention to connecting with their clients and help them achieve a more accurate visitation of a property and its potential.