NAIOP examines the role of data in commercial real estate development

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Industries are changing rapidly as business processes become increasingly interconnected and automated. Data and analytics play an important role in information technology and its interaction with the physical world, including emerging areas such as artificial intelligence, the Internet of Things (IoT) and virtual reality and increased.

The advanced data insights obtained from these tools can be analyzed and deployed to help users make smarter choices and are increasingly guiding forces in the commercial real estate industry. Beyond property management and building operations, these types of analyzes can also inform important development decisions, including site selection, design, and evaluation of commercial buildings.

To get a sense of how CRE companies use this data, the NAIOP Research Foundation commissioned a report, authored by Clifford A. Lipscomb, Ph.D., MRICS.

The report notes that while the CRE industry has been slower than other industries to adopt data analytics, some companies have identified several ways in which data analytics can support land and building development and help to better project results.

Through research and interviews with brokers, data providers, investors, developers and other professionals at CRE technology companies, the report outlines key takeaways on how data analytics can potentially add substantial value to new development projects, including:

  • Most companies continue to rely primarily on traditional forms of market research when making investment and development decisions, but data analytics has the potential to improve location decisions and building design.
  • Several CRE technology companies have developed software that leverages data analytics to improve highest and best utilization analysis, land development, construction planning, and site management. project.
  • The high costs associated with developing in-house data analytics capabilities lead most commercial real estate companies to outsource analytics tasks. More companies will develop their own analytics resources as they become more useful.
  • Advances in artificial intelligence and new investments in collecting and structuring CRE data will expand the applications of data analytics in commercial real estate development.

“While the commercial real estate industry has historically been slow to adopt and integrate new technologies, there is no doubt that data analytics management will be a key component of developer success. It will be exciting to see how the use of data transforms the industry,” said Marc Selvitelli, CAE, President and CEO of NAIOP.

Download the full report at naiop.org/dataanalytics.

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