What’s the big deal about Big Data? It’s one of those buzzwords that gets thrown around so often that commercial real estate professionals could be forgiven for forgetting what it means, much less why it’s relevant to their needs. But the reality is that Big Data is increasingly fundamental to how we understand the world around us – including commercial buildings. And it will only become increasingly integral in the years ahead, thanks to a huge uptick in connected devices.
This is especially true for commercial real estate professionals, though it may not seem like it at first glance. But consider this: when you’re looking to sell or sublet property to a new tenant, how are you framing it? Whether it’s in terms of space and square footage, or the average utility costs per month for heat, electricity and water, the sale is completely numbers-driven. What the buyer wants to know is, “how much [x] can I get for [y]?”Another blog that you may like: "How to use big data?"
Office buildings that are outfitted with occupancy sensors and other Big Data applications make this kind of cost-benefit analysis for a potential sale easier than ever. Big Data analytics grant commercial real estate professionals valuable insight into how efficiently a space is used, identifying certain areas that may generate the most amount of foot traffic or consume higher levels of electricity than others.
That data can then be used to paint a more accurate picture to a new tenant of how they can imagine themselves working in that space. If a new company looking to move in has concerns about too much or too little space, their realtor has concrete evidence – rather than hypothetical examples – about how well that space is actually utilized in real-time.
This approach works just as well for current tenants who may be looking to leave a building because of concerns they may have with the property. As businesses grow, they may think their current space is far too small for their needs, and that to expand as a company they need to expand physically as well.
Again, Big Data proves its value to CRE pros by painting a picture of how to best conduct workplace utilization. For tenants looking to upgrade, and to avoid losing them to another competitor’s buildings, real estate professionals can use analytics derived from office occupancy sensors in the current property to track how efficiently tenants are already using their space. If there are entire rooms or shared spaces going unused, and you have the data to quantify the financial or logistical losses associated with these underutilized spaces, you can then make recommendations on how to capitalize on them, better using what they already have instead of needlessly spending more money on, well, more space.
On the other side of the coin, businesses may be looking to move because their current space is too big for them, and is more than they need or are willing to pay for. Here, realtors can use analytics derived from the business’ workplace behavior to derive insightful conclusions about where they can curb costs – whether it’s subletting relatively unused or ignored spaces to other tenants (deferring the overall cost of rent), or implementing sensor controls for managing how often utilities like water and electricity are used. By looking at the tenant’s behavior through the lens of Big Data, realtors can suggest new actions for helping the tenant to retain their space in as productive and cost-efficient a way as possible.
Whether CRE pros are looking to fill a property with a new tenant, or retain their existing tenants in their current property, drawing on Big Data is key. These analytics can be used to highlight any given space’s strengths – both in terms of usage and pricing – and provide workarounds for any concerns the tenants might have. In the end, it benefits the CRE pro’s business and the tenant’s satisfaction with the property.