There’s plenty of talk in the industry about “big data” and how much impact it may haveon the commercial real estate industry. The use of big data is becoming widespread in all types of business. A recent report from New Vantage Partners cites a study showing that 63% of firms reported having big data in production in 2015, up from just 5% in 2012.
Why this jump in utilization? It comes in response to innovation in the methods used to gather data and track information. While databases have been with us for some time, the breadth of information we are able to collect and aggregate has exploded in recent years, thanks to more open sharing and the advent of the Internet of Things (IoT).
This is a timely and much needed development for CRE and any other industry that values informed decision-making. An excellent example of how this relates to commercial real estate and more specifically the industrial sector, is the use of sensor technology.
Sensors include “smart” technology that keeps track of building systems and monitors conditions to avert problems like water leaks. These devices can gather data around the clock, and users can follow relevant reporting in real time.
Extraordinary benefits can be achieved when data from those sources are aggregated with more traditional sources like census figures, public records, etc. as well as “unstructured” data pulled from social media and video. These can be incorporated, along with thousands of other data points, into a detailed picture of properties and markets. It has tremendous implications for the industrial sector, and affects it in several ways.
Fast access to crucial data greatly accelerates deal making and provides investors with the tools that have become essential for making informed decisions. They combine market figures with relevant economic data and specific property histories in ways that clarify local trends and are helpful in making more accurate projections.
Smart technology is revolutionizing property management, and the industrial sector is no exception. Access to real-time data on building use and systems efficiency alerts managers to potential problems and helps them to identify areas for improvement.
Big data improves our ability to make projections about nearly any aspect of the industrial market. All types of market analyses and property comparisons can be easily understood and shared with clients. Services are available that can generate very specific reports, eliminating irrelevant information to make big data more usable.
In recent years, an increasing number of real estate organizations have relied on the collection and analysis of huge volumes of data to guide their business. For the industrial sector, big data assists us by staying on top of operations that increasingly function on a much larger scale than ever before. Managing massive operations requires attention to detail. Big data makes that a viable relationship.
Challenges include capturing the right information, finding and using appropriate analytical tools, and ultimately, putting the data to good use. While many organizations have already initiated projects to take advantage of big data, converting the large amount of information into valuable knowledge and ultimately, business are very different things – perhaps more relevant for small to medium sized businesses with restricted budgets and bandwidth.
Looking forward, the rise in mobile, cloud and social computing will only result in increasing amounts of data and with it, new opportunities. How are you seeing big data impacting your industry?