Understanding the Role of Data Transparency in CRE
2017-10-25
At the beginning of 2017, much of the commercial real estate industry agreed that big data would be one of the trends or disruptors to watch for in the new year. What has evolved from these early speculations is a technology boom where not only the gathering and analysis of big data is trending but also the demand for data transparency is resounding throughout the CRE industry.
Why transparency matters. Data transparency in commercial real estate ultimately impacts the growth of an entire nation, not to mention the portfolios of individual CRE owners across the globe. According to the latest JLL Global Real Estate Transparency Index, the world’s 10 most transparent markets account for 75 percent of global direct investment into commercial real estate and are home to nearly half of the world’s 2,000 largest public companies. The United Kingdom, Australia, Canada, and the U.S. fill the top spots on the list due to their exceptional transparency in granularity, quality, frequency, and geographical spread of performance measurement, valuations, and market fundamentals.
While data has always been an important piece of the CRE puzzle, refinement of the data into real-time, relevant information has become essential to finding the right tenants at the right time for the right property and lease term.
What does transparency look like in the U.S.?
Colliers suggests that the commercial real estate market has hit the ground jogging, rather than running in terms of data transparency. For instance, while self-service property searches can help businesses find new locations, the availability of data remains limited at best. However, as data transparency brings more information to the marketplace, the roles of CRE professionals are changing from one of data provider to strategic adviser. Dan Spiegel, Executive Vice President of Colliers International U.S. Operations, explains, “The commercial real estate professional who works with a client adds value by providing interpretation of market opportunities and an additional array of information regarding market growth analysis, demographic trends and growth forecasts for lease rates.”
Data transparency along with predictive analysis is improving decision-making processes in deal making, lease underwriting, and site evaluation. By combining expert knowledge, CRE professionals can use data transparency to discover patterns that can inform the future of both tenant and owner. As Bizjournals.com reports, data transparency is changing not only the way deals are made, but also the way questions are formulated to gather data in the first place. This is how a company like (RE)meter can create real-time reports for CRE professionals on tenant finances and tenant industry in the lease underwriting process. Data transparency makes asking the right questions, gathering the right data, and analyzing the data in real-time possible and essential in today’s commercial real estate market.
