– Excerpt from The New #CREcosystem | Download the Full Report Here
Long before the advent of smartphones, tablets, and cloud-based apps, CRE was a data-centric industry. In the words of Dr. J. Nathaniel Holland, Chief Research and Data Scientist for NAI Partners, “CRE has a rich history filled with data, but the industry is just beginning to tap into its full potential through actual statistical analyses and data science. It is critical for stakeholders to move beyond historic ways to embrace new data-driven approaches, success of which will ultimately be gaged by knowledge driven entrepreneurship derived from the data analytics. Gut instincts and experiences lead to the important ideas, hypothesis, and alternative hypotheses that are worth testing through rigorous statistical analyses, results of which produce knowledge that complements (and sometimes contradicts) the initial gut instincts and experience.”
Before the advent of smartphones, tablets & cloud-based apps, CRE was a data-centric industry. Long before smartphones, tablets & cloud-based apps, #CRE was a data-centric industry. #CREcosystem
We asked the industry’s emerging and influential voices about their thoughts on the history of data in CRE, and where they think it’s taking us today and in the future.
What impact does open data have on CRE?
“Data has been transforming the CRE industry for years. The difference, today, is we are increasingly putting in less effort to gather and contextualize that data by automating operational processes, both on-the-go and in the built environment…We are discovering new processes for mundane tasks at an exponential rate as more analysis technologies emerge and I couldn’t be more excited.”
“It’s more about the speed and accessibility of data now more than the thing itself. CRE has always had and worked with data, but now it is easier to source,track and present it. From a marketing perspective it enables us to better understand the behaviors of clients and potential clients online.”
“Better data helps everyone make better decisions – it can remove some of the pricing power that comes with lack of information, but overall, more data is better for the industry.”
How does data improve decision-making without replacing gut instinct?
“Just as a fool with a tool is still a fool, the same is the case with data. That said, experience has enough context to use the right data to forecast and make correct decisions.”
“Data will never replace economic logic and intuition, but I think data can play a large part in confirming some of the things we believe from our gut, and even better, can sometimes show us that what we believe might not be true.”
“It can ground your gut instinct with fact or tell you your gut instinct is wrong. It is the test of the data that supports the gut instinct.”
What defines a successful data-driven culture?
“Most of us spend more time out of the office than we do in it. The ability to do the vast majority of the things we typically do from inside the office outside is critical to survival and success. Mobile technologies empower today’s leader to be fluid and not lose a beat.”
“I would say past experiences play a crucial role here. If you can draw a correlation between prior successes with data based decision making versus “gut instinct” you are likely able to continue supporting and further cultivation a data driven culture.”
“Understanding that data helps make decisions, it doesn’t make the decision.”
The process of manually translating data into insights that enable business decision-making is laborious and complicated, and often requires a unique data analytics skill-set. According to JLL research, only 28% of commercial real estate firms currently rely heavily on data analytics to inform decisions. Organizations leading the CRE data revolution may be considered “pioneers” today, but by 2017 the number of firms fueled by strong analytics is expected to double to 56%.
Timely access to accurate & relevant data is evolving from a competitive edge to industry standard. Access to accurate #CRE data is evolving from a competitive edge to industry standard. #CREcosystem
For early adopters promoting change, timely access to accurate and relevant data is evolving from a competitive edge to industry standard. With increased data access and exponential growth in volume and complexity of information, CRE will find itself in a new age of analytics.