Commercial Property Market Analysis: Analyzing Trends In Suburban Office Space Leasing – Location data can provide new insights that will enable businesses – and their tenants – to recover in a post-pandemic world.
Data has recently changed commercial real estate companies. Many are beginning to rely on location data, in particular – including points of interest (POI), footprint and foot traffic data – and third-party data to conduct market research and pre-investment research. This is important knowing that many of these decisions have potential long-term financial consequences.
Commercial Property Market Analysis: Analyzing Trends In Suburban Office Space Leasing
The use of location data in this way has thus enabled many business enterprises not only to reduce the risk of their investments, but also to increase the return on strategic investment from the very beginning. Additionally, as the world quickly reopens after a challenging year of the pandemic, there is a growing awareness of the urgency to invest in highly profitable and cost-effective real estate opportunities. year.
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Data will be key to understanding which business opportunities hold the most promise in a post-disaster world. It is up to the private sector to use this data to inform their portfolio management strategies and influence how they incentivize future tenants to lease their existing premises.
For correct use. In this guide, we explore the reasons why commercial real estate companies should put location data at the heart of their investment strategy to increase long-term ROI and reduce financial risk.
Although big data is a new field for commercial enterprises, we take a closer look at why it has become a rapid change in the traditional industry:
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Technology affects every aspect of our business and here is the most important step. The gap between those who embrace technology and those who don’t is widening.
Especially now that there are so many vacant properties available, it will be difficult for commercial real estate companies to narrow down the list of investment opportunities and sort them out.
Fortunately, data (of any kind) can help initiate more targeted research, making it easier to find properties that meet specific search criteria or meet specific investment goals.
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Among the many ways data is already contributing to the success of the commercial real estate industry, here are some areas you may not have considered:
Not surprisingly, most successful real estate investors will tell you that much of real estate investing generally requires you to trust your gut. But now they also know that having the right data to support and validate these effects is essential to building trust during major planning and decision-making processes.
As Ryan Passe, vice president of operations at Sands Investment Group (SIG), said, “Gone are the days when traders could rely on their gut to find the best deal. Today, if you don’t pay attention to the numbers, that’s why companies like , like SIG, double down on making business investment decisions more data-driven.
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It’s more than creating better and faster “matches” between buyers and sellers. Now it’s about pricing correctly, better understanding capital flows and inventory levels, reducing credit risk and determining better property values. “This gives our teams the ability to market, make quick decisions and embrace new technologies in a world that often depends on convenience,” said Passe.
Therefore, throwing location information into the mix can help answer questions about potential foot traffic, monetization opportunities, including neighboring businesses, inventory management, equipment planning, and more. These are the insights that can turn intuition into long-term investment decisions.
Many real estate companies have long made decisions based on integration and traditional background information. Nowadays, many new variables allow us to paint a clearer picture of the risks and opportunities of the future.
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There are many things that can be done with location data in the commercial enterprise industry. Here are some of the most common things you can do to keep your sanity:
Market research is a general best practice that every business enterprise should master. It is an objective method of determining whether a particular commercial space dedicated to a certain type of business will be successful and therefore have a higher rental value.
Combining POI data with other data, such as per capita purchasing power, allows real estate companies to analyze specific markets and gauge a property’s potential return.
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A lot of investment. Many factors influence the analysis of the commercial real estate market, including:
All these factors play an important role in determining the end of the “rent” of the property, and the business organization must take them into account in advance when making investment decisions. If you fail to do thorough market research, you could be left with a plethora of properties that sit idle and gather dust for months.
We use the funnel method for real estate investments. We started by researching markets, asset classes and cycling to find out what condition and in a specific market, and what condition and in a particular asset class in the market.
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Location data can support commercial property selection and portfolio management in a number of ways. It depends on the types of property you are considering buying.
For example, when choosing a retail site, location data can help you target the exact locations that are most successful—in terms of foot traffic and potential revenue—for businesses of interest and lease those properties. In many ways, choosing a retail location for a business means thinking a few steps ahead: the ROI extracted from this investment will pay off.
When a successful tenant sets up shop. That is why it is important for commercial companies to be able to draw a picture of how successfully tenants can fill vacancies, quickly.
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When commercial real estate companies invest in office space, they usually don’t care about foot traffic, but instead focus on making sure the property is close to things like coffee shops, restaurants, hotels – hotels, offices, supermarkets, and other “daily necessities.” “, which office workers want easy access to. Taking into account the environment surrounding the property allows commercial companies to price it ‘right’ as a value proposition when creating rental packages. Understanding the good and bad trends in real estate is the best way for private equity companies hedge their portfolios and build a solid portfolio strategy that leads to long-term revenue growth.
Advanced analytics cannot function as a crystal ball. In most cases, you only need to support investment forecasts, not production.
According to Deloitte, “Big Data can help you work more efficiently because technical information and the state of building materials can now be provided in real time and reliably.” This quickly becomes an advantage for many companies in investment research. The data available today allows not only the prediction of potential profits, but also the real-time measurement of performance at a granular level.
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However, this increase in the use of data is not widespread in the commercial real estate industry. Industries have generally been slow to enter the data bandwagon. The primary factors preventing businesses from ingesting data are:
Traditional analysis methods and data sources make it difficult to formulate clear hypotheses and build strong business cases.
Adding location data and other non-traditional data sources to so-called traditional commercial real estate data can provide better insight into aspects of real estate.
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McKinsey offers a good way of thinking about this: “Two buildings that look the same by traditional metrics may experience different growth trends. It’s easy to imagine how this diversification at the individual building level, when applied to a range of investments, can produce amazing results at the portfolio level.”
Location-based data can deepen the database of market performance, property characteristics, and property performance, offering investors new and better ways to evaluate a property’s long-term success. This data provides additional and often needed context for better decision making and significant risk reduction.
Updated monthly for accuracy and precision, the Locations dataset provides the detailed POI and footprint information you need to make more informed and informed decisions about your investments and business strategies.
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Places contains basic information about the places where people spend their time and money, such as the place’s name, address, category, and tag group. It also highlights the connection between nearby POIs. That’s why POI data is important because it provides a unique perspective to understand what types of places your audience visits throughout the day or week.
Used in the commercial real estate sector, POI data can form the basis of mapping, provide market analysis, and provide a “bird’s eye” view of the environment surrounding each location (ie the area is already full of the type of business or property). brand? There is
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