Far from replacing them, data-driven CRE tech will actually help brokers improve the scope, insightfulness, and efficiency of their operations.
The idea that technology — especially technology that automates previously manual tasks — renders human workers obsolete has become an increasingly common refrain in the wake of the digital revolution. Though such an argument may have some credence in industries like manufacturing, it couldn’t be further from the truth in commercial real estate (CRE).
This is not to say that brokers who refuse to adapt to the new realities of the digital CRE landscape won’t face negative consequences, but rather that they should be less concerned about technology as such coming for their jobs and more concerned about being surpassed by their more tech-savvy peers.
Indeed, CRE remains deeply rooted in human relationships, and technology will never displace the central position that person-to-person interactions occupy in the industry. The promise of technology is not that it replaces the human element of CRE, but that it facilitates it. By expediting the process of finding the right partner for a deal, determining the proper time to initiate contact, and helping highlight where common business interests exist, technology has the potential to be the ultimate CRE enabler. For many veteran commercial real estate brokers, the biggest challenge is simply accepting that CRE tech can make them better at what they do.
Using Data-Driven Tools to Become a Better Broker
While “data” is often discussed in CRE circles as a force of paradigm-shifting magnitude, this is, in truth, misleading. For the most part, digital technologies have not created any new real estate information. The industry’s foundational data — cost of capital, demographic shifts, workforce trends, ownership histories, zoning regulations, and so on — is inscribed in the endeavor of real estate itself, and no amount of innovation is going to change that.
The value of technology rests with its ability to process the same old data at an astoundingly rapid pace and, in some cases, in radically new ways. The remarkable rate of data proliferation over the last two decades has created a reality in which the human mind is simply no longer capable of managing the volume of digital information that exists. In CRE this means that while brokers may well have access to all of the information they need to strike a good deal, it’s incredibly unlikely that they will be able to do so within a reasonable timeframe unless they are willing to use technology to optimize their operations.
Commercial real estate analytics tools, for instance, can help brokers uncover trends in their data that would otherwise go unnoticed. By aggregating and analyzing disparate pieces of information spanning dozens or even hundreds of datasets, these tools quickly reveal which underlying factors drive CRE business within a certain market, enabling brokers to pounce on opportunities as soon as they emerge. What’s more, when applied to an owner’s investment portfolio, predictive analytics can pinpoint assets that have realized their maximum value and therefore ought to be sold. Brokers can leverage this knowledge to ensure that the advice they provide to their established clients is as accurate and forward-thinking as possible.
CRE tech is not so much about data itself but about how one gathers, organizes, and analyzes data. All of the information already exists; the challenge is making sense of it. Doing so requires an amount of processing power that far exceeds the capacity of the human mind, which, ultimately, is why CRE brokers have nothing to fear from technology. The tasks at which technologies like data analytics platforms excel are not those that brokers used to do by hand, but those that brokers didn’t — and couldn’t — do at all. Far from replacing brokers, CRE tech actually expands the scope of what brokers are capable of.
Discovering Unparalleled Flexibility
For example, brokers who take advantage of a platform like Reonomy enjoy a level of geographic flexibility that was previously unthinkable. On the one hand, a broker can use Reonomy’s abundant data to develop the kind of hyperlocal expertise that enables them to keep pace with larger, better-resourced competitors.
Within today’s CRE landscape, the most successful brokers possess — and know how to use — ultra-specific knowledge about their market niche. This includes not only detailed information about specific properties and assets, but a nuanced understanding of local news, regulations, behaviors, and any other market-specific challenges and trends.
Of course, this depth of knowledge need not necessarily apply to a geographic niche. Many brokers find success by specializing in, say, a particular building type, a defined price bracket, a certain square footage range, or a distinct industry — retail, manufacturing, restaurants, etc. Regardless of how a broker chooses to define their “hyperlocal” focus, the importance of reliable, accessible, and, most of all, well-organized data cannot be overstated. As such, a platform like Reonomy is more or less a necessary condition for any broker hoping to develop their own brand of hyperlocal expertise.
On the other hand, however, big data tools can also empower ambitious brokers to expand their geographic range without sacrificing the depth that comes along with local knowledge. In the past, it was possible — albeit painstaking — to gather a decent amount of data from outside of one’s home market. But, as outlined above, establishing a real presence in a market requires insights that drill down beneath superficial — though still obviously important — property data. Platforms like Reonomy provide brokers with this depth of insight, enabling them to take well-informed risks in far afield markets if they so choose.
The Importance of Embracing Technology
At the end of the day, success in commercial real estate depends upon one’s agility, efficiency, and knowledge. Time is the limiting resource in the CRE world, and working faster than one’s competition while still maintaining a commitment to quality can be the difference between closing a string of massive deals and failing to reach quotas. Data-driven technologies have the power to ensure that a broker’s day-to-day workflows are as efficient as possible, and in this way will play a decisive role in determining CRE winners and losers moving forward.
The democratization of big data means that every broker has the opportunity to succeed in this new era of real estate. Ultimately, those who embrace technology instead of fearing it are the individuals who will be able to seize this opportunity and become truly modern CRE brokers.
Looking for up-to-date, comprehensive commercial real estate data? Reonomy offers CRE professionals real-time access to the data points they need to grow their business — from debt and sales history to zoning and building owner information. Try Reonomy National for free today.