Commercial real estate is undergoing a technological revolution powered by data and analytics. With data and automation, real estate organizations can gain unique insights, allowing them to compete on an even playing field. It is well known that real estate has been sluggish in adopting new technologies and innovations. Still, analytics tools have been incorporated faster than any other type of new technology in the industry.
It is still early in the evolution of the industry’s understanding of exploiting datasets to their maximum potential. A company’s internal development data can be just as valuable as its external market data currently used by real estate companies for apartments for rent in Rancho Cucamonga.
Investment and development decisions can be guided by internal (or historical) data based on past experiences. Particularly for small developers, data can allow them to compete with larger organizations and pursue opportunities they might not otherwise have access to.
A small development shop’s core competency is being transformed for the better by data and analytics in three ways.
Historical data has allowed institutional real estate developers to make market-driven, competitive decisions long before the benefits of technology and automation. Hundreds of projects are executed by large development shops each year across several markets with an extensive pipeline of projects. These activities generate a large amount of data, which is targeted and personalized.
By retaining that data, developers have a significant advantage when combining it with current market information to generate better and more predictable outcomes in the future. The concept of market omniscience appeals to us. They’re all-knowing.
For small shops, technology can mimic scale, which has traditionally been a key differentiator. You have more data than the most prominent developers in any city if you have completed over 2,000 projects representing $125 billion in investment. There is a lot we know. It allows the company to provide the same expansive proprietary data as a large organization by building an index from all those experiences. You can iterate quickly with us because we can feed you data rapidly. Transformation is fundamental.
A data index is created across several development projects. The technology can then produce different tailored scenarios based on the developer’s business model, location, and asset class, according to a developer’s business model and strategy. According to a recent study on technology integration from CBRE, this process is becoming commonplace in the development industry. Thanks to technology, real estate decisions are increasingly tailored to client’s unique needs, thanks to unparalleled access to data.
Retaining internal expertise
Most small development shops bring successful projects to the market year after year, even if they don’t turn in dozens of projects each year. The small and midsize developers have historical datasets from past projects, although they are smaller than the institutional players. The majority of organizations fail to preserve or retain this information. When a veteran employee leaves an organization, that historical information is also lost.
Historical knowledge becomes increasingly valuable as a company grows and expands. In addition to retaining historical data, companies can create a central database that employees can access to gain a deeper knowledge of the company’s approach and experience and even avoid past errors and pitfalls. Developing real estate requires institutional knowledge and experience. There is always a possibility of encountering issues or errors when changing orders. It’s a loss and a burn.
Project management variables, such as realistic construction scheduling and overage exposure, are part of this retrospective data type. A developer’s experience can often provide valuable information, but a small outfit rarely has the time to index that information. Developers can manage and retain historical project data by combining automation with machine learning algorithms, allowing them to draw on their experiences to plan future projects.
Developing institutional knowledge
We can learn some lessons from the past, but not all. Market dynamics today present several emerging challenges and opportunities. An experienced team of professionals is the best resource for real estate developers to unearth emerging trends and proactively respond to them. Due to a lack of knowledge sharing, small developers often fail to maximize the value of that resource. There is a significant problem with this across all industries. Insufficient knowledge sharing costs companies $40 million annually.
Professionals can pass on critical information and experience through institutional knowledge. When it does this, the development team operates as a cohesive unit rather than as a disparate collection of workers. Institutional knowledge is often cited as a company’s most valuable asset, but capturing and sharing institutional knowledge takes time, effort, and investment.
Building institutional knowledge and sharing information can be achieved through technology. According to a Harvard Business Review analysis of institutional knowledge, investing in technology is one of the most effective ways to capture institutional knowledge and store it centrally and easily instead of in the minds of legacy employees. Employees can extract and retain information with little effort by automating the process.
There is easy access to this technology for small developers. Unlike more prominent developers, it does not require a team of IT experts. The products are cloud-based technologies that can easily be integrated into projects to meet objectives and achieve better results. How to Become an Investor? Real estate developers invest in their success and longevity by controlling their data and experience.