Commercial real estate data has long been left abandoned in dark recesses and behind firewalls, either forgotten or hidden. Mostly for a perceived competitive advantage. Today that may no longer be a choice. The tension between commercial real estate data that is aggregated, mined or sold and data that is found or acquired is, for now, an explosive dynamic. The question for commercial real estate now is not “why would I make my data available?” But rather, “how do I make my data available and, what do I need to know to do it right?”
What Can or May Happen to Your Data?
Commercial real estate data is and will be increasingly available. Growing numbers of us know how to and will continue to learn and play with data and bend it to our will. Commercial real estate data can create new insights and open new opportunities, but it can also be twisted to serve an agenda or simply tell us what we want to hear. In the midst of all the data-driven innovation we are seeing, we will begin separating the non-trivial from the trivial. It’s one thing to acquire terabytes of data, and it’s quite another to cleanse and mobilize that data in service of real-time insights into the commercial real estate market. Let’s not forget that the government may step in and start regulating the acquisition, use, and distribution of our precious data. Because of this we may also see more data on lock down, secreted away in an attempt to keep the “perceived” old school competitive advantage.
The Important Questions You Need To Ask About Real Estate Data
1. Will data availability and portability, done well, help create a defined commercial real estate brand?
Answer: Absolutely yes, and whoever creates the “data standard” for commercial real estate will be THE Brand. Think Google. Think Oracle. Think E-Trade. Think NYSE.
2. What new audiences will the data attract?
Answer: Just for a start, think of all the obvious related business around the data. Engineers, architects, construction. Some not so much, actual tenants or end users. The old age thinking that these people do not need, want, or should have access is ridiculous.
3. Will we need commercial real estate data, advisors?
Answer: Certainly. This task may become the pivotal position in the future commercial real estate organization.
4. Will we manage our data daily, weekly or monthly?
Answer: Is the question not redundant already? How about real-time data management. Just look at the stock market. Commercial real estate data is no different. If you are in a position to manage the data in real time and don’t – resign.
5. What do “innovative” data mining and monetization methods now in use by Google and others, mean to commercial real estate?
Answer: Big trouble. All are third party vendors with a focus driven goal to figure out a smarter, faster, cheaper and more efficient ways to monetize commercial real estate data. They will create the data market for commercial real estate.
6. Will this affect commercial real estate locally, at a regional level or on a global scale?
Answer: Stick your head in the sand if you want. It’s called “The Cloud.”
7. What happens to commercial real estate data when it’s collected and syndicated into “the cloud”?
Answer: It is already in” the cloud”. It is already being pushed to any and all who see a real value to the data. We must, as an industry, create the commercial real estate cloud. The cloud is already getting filled up from other sources. Think public property and tax records. Think architectural and engineering data.
7. What happens if there is a monetization of the data without the knowledge and permission of the rightful owner?
Answer: Great question. Who really owns the data? We certainly should take ownership. Is it through proprietary agreements? Paid access? Membership? Commercial real estate must establish clear and informed consent on who exactly owns the data, who should control it and how it should be monetized.
8. Can commercial real estate be stupid enough to go back to square one?
Answer: Hopefully not. Do not give the data away for free and then be stupid enough to get the aggregated data sold back.
9. How do we, as an industry, determine the real value of data beyond the context of that data is just property data?
Answer: The data will be and has incredible value to so many beyond just the transaction. Not to get off track here but sustainability, HVAC, economic development, tax, mapping, BIM, Leed, lifestyle, demographic, etc., etc.
10. Do we need only need “comps” to build upon or to derive a valuation model?
Answer: Yes and no. Yes, because comps do create a historical value, but only as it is relative to the market. What is the value of a comp that is five years old mean in today’s market? Yes, I am chuckling. No, because the data is more relevant and valuable if it is true and accurate and timely, again think NYSE.
11. What exactly is the Commercial MLS’s/ CIE’s role?
Answer: Can they be the true stewards or data managers for their “customers.” They can, will and should be the only connection from the property record and the subsequent transactions also including all electronic interactions between any and all the parties connected to it?
12. Does this create a new kind of data marketplace? Will this impact commercial real estate marketing?
Answer: For the sake of us all – yes. Do we want not only other industries but the consumer or clients themselves dictating the value of commercial real estate data? Maybe we do! What if the client or user of the data, sets their own price for access? Do we gain a data history, preference and use for each? Commercial real estate marketing is likely to change as well.
13. Do we understand how business intelligence and analytics are being applied to the data generated by commercial real estate transactions?
Answer: Yes we do and it also needs to be more refined for commercial real estate but, We need a data standard – the sooner, the better.
14. How should the commercial real estate industry confront this data challenge?
Answer: Start now, at least to address the data questions that we, as an industry will inevitably have to face.
15. How should we do it?
Answer: Not the way it is NOW. While we sit in committee rooms and create general “best practices” lists the third-party vendors are already executing a planned business model with…wait for it….revenue for profit.