CRE Firms Turn to Big Data to Make Better Decisions During the Pandemic
CRE firms are also relying more heavily on artificial intelligence to give them a competitive advantage.
Recently Cherre and Planned Grocery announced a partnership to integrate grocery retail data into a real estate data platform.
Planned Grocery’s data shows investors where and when new grocery stores will be built with the exact location, size, opening date and data source. That information will be incorporated into Cherre’s platform, which combines disparate real estate data into a single source.
The agreement is the latest example of the CRE industry tapping into new data sources to make better decisions during the pandemic.
As lockdowns and social distancing measures have taken hold during the pandemic, it is harder for CRE firms to rely on their traditional data sources. For example, when looking at human mobility and migration in the pandemic era, decision-makers need to reference data going back at least a year previous to the COVID-19 outbreak in North America, according to Thomas Walle in the Unacast blog. He writes that people must use leading indicators through fresh, standardized location data to get predictive data.
“Unfortunately, much of what’s out there for discussion is based on qualitative extrapolations from datasets that don’t have anything to do with human mobility. In other words, it’s unreliable.”
Amid the uncertainty caused by the pandemic, CRE firms are turning to such data providers as Cherre and Planned Grocery in order to leverage big data and artificial intelligence, according to Trepp’s Erin Liberatore-Timko.
AI allows firms to make faster decisions and predictive forecasts from large datasets, Liberatore-Timko writes, while big data dives deep into such metrics as foot traffic, traffic patterns, seated diners and online reservations, and rents paid. “Firms like Cherre provide a platform to instantly visualize multiple CRE data sources for accurate reporting and in-depth analysis,” she writes.
This shift has been long in coming.
In 2019, a KPMG Global PropTech Survey indicated that 80% of firms do not have “most or all” of their decision making led by data. Additionally, only 5% of real estate firms had transformation efforts led by someone with knowledge of data analytics. Liberatore-Timko writes that this skills gap presents an opportunity for students coming out of school “who can translate data into context to explain markets and portfolios will see a lot of opportunities ahead of them as the future of real estate is dictated by data and technology.”