Analyzing data has always been a critical component of doing business.
Any kind of business: from selling consumer products, to extending credit card offers, to green-lighting new TV shows, or investing in multifamily residential properties…
While some industries have taken greater leaps in harnessing the power of big data, real estate has only begun to explore its benefits in recent years—driven mostly by proptech companies setting out to evolve working conditions for industry players.
First up, we’ll look at what big data actually is and how it can be put to use.
Later in the article, we’ll look at how commercial real estate technology is being taken to new levels with the incorporation of big data, and what that means for the end user.
About Big Data
What is Big Data?
The traditional definition of “big data” refers to data sets that may be too large or complex to be processed by conventional data-processing applications.
However, the modern interpretation of the term is not so much concerned with the size of the data.
Now, “big data” references large data sets and the various advanced analytical methods used to process that data and derive useful patterns, relationships, and trends.
The term has been around since the 1990s—its popularization has been attributed to the U.S. computer scientist and entrepreneur John Mashey.
While there are several other contenders who claim the rights, Mr. Mashey was the one who talked about the concept at countless presentations in the 90’s while promoting his company, Silicon Graphics.
How is big data being used?
At this point, big data has practical implementations in nearly every industry and level of government.
In healthcare, big data analytics has facilitated such innovations as computer-aided diagnosis, personalized medicine, automated internal and external patient data reporting, and more.
Additionally, insurance companies can identify potential health issues in their clients by analyzing their food consumption, TV watching habits, and shopping patterns.
Powered by big data, consumer brands have modified their marketing tactics to reach consumers at optimal times and locations such as in their social media feeds and email inboxes.
Online retailers customize product search results, recommendations, and promotions based on individual customers and their past browsing and purchasing behavior.
Additional examples include educational institutions that have used data about industry demands and shortages of trained professionals to create new programs, and weather monitoring agencies predicting hurricanes and understanding natural disaster patterns and global warming implications.
Even the government uses big data to keep track and address issues such as unemployment, disease outbreaks, and welfare distribution.
The list of examples is endless – as a matter of fact, big data collection and interpretation is a part of every aspect of our lives, and as new analytical methods are developed and computer processing power increases, its implementations will only get more creative and widespread.
Big Data in Commercial Real Estate
How is big data helping CRE companies and professionals?
Just like other industries, commercial real estate has benefited greatly by adopting big data powered technologies.
There are hundreds of proptech companies around the world crunching billions of property and financial records with proprietary algorithms in order to create highly customized, game-changing analytical tools for every branch of the industry.
Analytical decisions that were once based on manually collected records and years of industry experience and market knowledge, can now be made faster and more accurately.
- Real estate developers can use historical data to estimate project costs and construction schedule delays.
- Loan underwriters can minimize risk by assessing borrowers’ credibility in new ways.
- Property managers can optimize building systems performance and reduce operational costs.
- Institutional and private investors can find acquisition opportunities that best fit their investment strategies.
In addition to providing invaluable analytical insights, these new platforms have been designed to present the data in easy-to-understand, intuitive dashboards and are capable of producing state-of-the-art reports.
Many can also be integrated with other real estate and property management solutions for a seamless experience by the end user.
In the next section we will highlight a small set of proptech companies that have used creativity, science, and technology to tame big data and produce some outstanding solutions for the commercial real estate industry.
Notable Proptech Companies Working With Big Data
Reonomy is attempting to take the world of property intelligence to new levels.
By amassing data from over 3,000 counties in the U.S. and bringing it together with proprietary algorithms, the Reonomy platform offers a place for companies to gather intel on properties and the people and companies that own and transact those properties.
The end result is the world’s largest source of property intelligence, where big data can be maneuvered in ways that help companies build and grow their businesses much faster than before.
With a database of more than 4.5 billion records and 200 proprietary analytical models, CoreLogic is one of the industry-leading providers of property information and analytics for real estate professionals, property management companies, mortgage lenders, insurance companies, and federal agencies.
It empowers users to evaluate growth opportunities, improve business efficiency, and monitor risk with a suite of solutions that includes valuation analysis, underwriting, risk management, and market and prospect intelligence.
The company’s in-house team of scientists, statisticians, and economists works continuously on innovating its analytical tools.
According to its website, CoreLogic holds 50 patents and additional 60 patent applications worldwide.
One of the veterans in the proptech field, the company was founded in 1991. It serves clients in North America, Western Europe, and Asia Pacific from its headquarters in Irvine, California and a new campus in Irving, Texas.
Hipercept builds data analytic solutions for large scale and institutional real estate investors.
The company tackles complex data management problems such as collecting, analyzing, and benchmarking information from multiple real estate assets and property management platforms.
The application takes data from various industry systems and information sources and transforms it into one comprehensive operating environment, while empowering its users to have better understanding and control of their real estate investments.
A couple of Hipercept’s more notable products include FUEL and Foundation. FUEL is a cloud-based cash flow forecasting tool for commercial and multifamily real estate assets.
Foundation is a data management platform that provides warehousing, governance, and analytics services.
Hipercept’s client base includes insurance companies, large banks, retirement funds, and asset management firms.
The company was founded in 2009, and currently has offices in New York, Boston, Chicago, Toronto, London, Sydney, Medellín, and New Jersey. Earlier in the year, Hipercept was acquired by RealPage, Inc., a leading provider of property management and other software for the real estate industry.
Another data provider serving the commercial real estate industry, CrediFi delivers insights into balance-sheet and securitized loans financing.
The platform leverages 200 billion data points to power analytical solutions for users such as lenders, fund managers, mortgage brokers, and property owners.
Powered by the latest artificial intelligence and machine learning technologies, CrediFi uses proprietary algorithms to process data from 3,000 federal and county government sources, 200,000 company websites, and millions of financial and commercial real estate documents.
Lenders can analyze their competitors’ profiles, discover new lending prospects, access property ownership data, and keep up with the latest financing trends.
Fund managers can utilize the platform to make trading decisions, analyze lender strategies, and research potentially risky loans.
Mortgage brokers can research properties and markets in order to discover prospective borrowers, while owners can find financing, uncover off-market acquisition opportunities, and keep up with the competition’s deals.
Bldbox uses big data and machine learning to make the analysis and planning of real estate development projects more efficient.
Powered by a proprietary machine learning algorithm, the platform can help developers evaluate construction costs with tools such as its proforma builder, consultant quotes manager, and hardcosts estimator.
The platform also offers tools for general contractors that can help them grow their business. By using individual users’ historical cost data, the platform can automatically create preliminary bids for new jobs in minutes with 95% accuracy.
Headquartered in San Francisco, California, Bldbox was founded in 2017. The platform was originally focused on analyzing land use options, before venturing into construction cost analysis and project bid generation.
The company was recognized as a winner of the CEMEX Ventures Construction Startup 2019 competition, and is the recipient of several other industry accolades.
CompStak provides commercial real estate transaction data from across the United States.
The company crowdsources its lease and sales comps directly from the professionals who closed the deals, and works only with qualified, active commercial brokers and appraisers.
It has received 2 million comp records on 630,000 properties up to date.
A team of in-house data analysts verifies the details of each submitted transaction in order to ensure the reliability of its comps.
In addition to basic property information, sales history, and lease comps, the platform features market intelligence insights and comparative studies, and custom data sets.
CompStak serves some of the biggest names in the commercial real estate industry, including major banks, REITs, private equity funds, advisors, as well as private investors and property operators.
In addition to offering its services as a subscription, the company can create custom solutions for organizations interested in integrating CompStak’s data and analytics with their business.