Big data, a profession once referred to as “sexy” by the Harvard Business Review, is believed to be the next big thing to disrupt commercial real estate. While some may argue that real estate has taken a more conservative approach to the data-driven model than other industries, things are starting to pick up in the field.
The data science model, a lucrative and Sticky approach to research that was originally thought to only be useful to companies like Google and Facebook, has now lent itself into the area of real estate. Data scientists working in the CRE sector are taking raw data from public sources, analyzing it and creating statistical models, and then using the information to determine how businesses can do things like increase profits, cut down on costs, and make more informed investment decisions.
Making Better Choices
Predictive analytics is one of the most popular parts of the data science model. It’s used for accurately predicting trends and the future impact of various decisions. While it’s far from an all-seeing crystal ball that can see into our future, predictive analytics has been used to help make better choices regarding Real Estate decisions.
Are you still wondering how the data-driven approach works? Imagine having researchers compile data in a way that helps you get a big picture of trends in the market. While things like property costs, demographic shifts, changes in the workforce, and vacancy rates may not seem that important in isolation, when put together they’re assets for making educated predictions about the direction the market will take.
Additionally, data science is also useful for helping companies expand. Now that businesses have much more access to data, it doesn’t seem like such a gamble to step outside your comfort zone and try your luck in different markets.
Going Forward with Big Data
At the moment, we’re still in the early stages of data science with respect to commercial real estate. With more firms getting on board and seeing the value of data science, it’s only fair to assume that big data will grow in the next couple of years. With that said, there’s been a lot of ways that data science has helped boost various functions in CRE. For example, analytics has helped companies improve everything from their portfolios to the amount of energy and resources that go into running a building, and it serves as the foundation which smart buildings are built on.
The truth is that we’re currently experiencing an exciting time in the industry. With data science becoming increasingly popular, there will be more and more companies emerging with the goal of leveraging and analyzing your data more efficiently.
In terms of money, big data is a revenue booster for the industry as a whole. It doesn’t only help companies operate more efficiently in their line of work, it also increases the sharing and exchange of information across silos. And most importantly our most precious asset (people) will be happier in the jobs.