Want to Make Better Real Estate Decisions for Your Business? Trust in the Power of Data.
Data is king when it comes to making decisions in today’s business world. Dealing with commercial real estate decisions is no different. The ability to utilize data and extract relevant insights can have a tremendous impact on the decision-making process, resulting in more informed and strategic lease decisions that correspond with overall business goals.
You don’t have to be a property manager or realtor to find yourself dealing with issues related to commercial real estate. Many corporate leaders lease or buy spaces, meaning they have to make real estate decisions. And while it might seem traditional, rational, or reasonable to listen to your gut, your gut isn’t nearly as dependable as the data at your fingertips.
Today, you can tap into a wealth of information to help you make all your real estate choices and answer pressing questions: Is this deal actually a wise investment? Are you using your leased spaces to their fullest capacities? Are you missing out on any benefits as agreed upon in your lease? Have you ensured you’re not going to miss any important deadlines?
With data, you can more confidently answer these and other concerns related to your commercial real estate dealings. However, you can’t just expect the raw data to give you the answers. Data by itself is just numbers, which is why it can seem so overwhelming. To truly harness, extract, and leverage relevant insights for your benefit — and to finally make your data work for your organization — you need to put a few actions into play:
- Avoid siloing your real estate-related data.
It can be tempting to assume that only your finance and accounting departments need to see your real estate data. (This is particularly true if you’re investing in commercial real estate as part of your business plan.) Beware of data silos, though: It has been estimated that they can add up to 30% annual revenue losses. Instead, find ways to un-silo your data, such as bringing together executives from operations, marketing, and even sales. These leaders can help you look at your commercial real estate data in novel ways. For example, let’s say you’re considering leasing a new space. To help you get a more comprehensive view of your needs, you might bring all your C-level people into a room to study your historical lease data. Working in tandem, you can identify trends that may be pertinent to your commercial real estate locations, contracts, etc. Not only will your diligence give you more assurance about what you need, but you’ll also have a better chance of getting buy-in across your verticals because you brought more voices to the table. - Adopt real estate analytics tools.
The right tools will always help you collect, organize, and analyze the massive stores of data related to your company’s real estate strategy. Ideally, you’ll want to make sure that you choose a centralized system to give you a “single pane of glass” look into not just all the data you have but how all the data elements work together. It’s difficult to make projections and predictions if your data is in disparate locations. Housing all data in one spot removes many barriers to staying informed.Andrew Flint is co-founder of Occupier, a transaction and portfolio management software that helps commercial tenants and brokers manage their real estate footprints. In his experience, he’s seen too many companies that keep their real estate data scattered among spreadsheets and PDFs rather than in a cloud-based lease management software. The result? Poor communication and ill-advised decision-making. “All lease data should be aggregated in a snapshot to give a cohesive understanding of the risks and opportunities,” he explains. “At the heart of every commercial real estate decision lies a unique data set. It’s not just about having data but about turning raw numbers into a shared language that all stakeholders can speak and understand. This is not just a trend; it’s the future of operational decision-making.”
- Encourage a data-driven culture.
What you do as a leader will be modeled by your team members. Therefore, if you want everyone to follow data-driven decision-making as a general rule (potentially as part of a digital transformation initiative, as 64% of leaders are embarking upon), you must adopt this philosophy openly. For example, when meeting with other leaders on any subject, ask them to present data to support their assertions and ideas. Over time, you’ll show that you’re serious about using data more appropriately. Be advised that you might have to exercise some patience. Many individuals — even seasoned, high-performing professionals — have little experience working with data. They’re often not sure how to fold data analyses into their processes or discussions. Consequently, you’ll have to show them through your words and actions how to make data work. Again, starting to ask for their advice during data-driven commercial real estate meetings is a good way to begin.
Can you still let your instincts guide you from time to time? Of course. As business owners, executives, and directors, we tend to do that automatically anyway. However, when it comes to determining anything related to your commercial real estate dealings, you can’t leave everything to your hunches. Instead, lean into objective data for your answers.
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