Reflecting on the data we have today illuminates what's missing, and where there's opportunity for even smarter decisions powered by data.

Portfolio management

Today's access to data allows landlords and brokers to better manage their portfolio. Technology platforms centralize all leasing information, allowing users to seamlessly track interest in their buildings, identify factors driving demand, gage pipeline velocity and assess conversion rates. These metrics empower landlords and owners to make more informed decisions regarding their assets, including the best way to market their buildings depending on current tenant tastes.

Rent roll is another big piece of portfolio management. This includes information on existing tenants like lease terms, billing and lease expiration date, lease rates, what floor they're on and what terms they negotiated. This data is used to determine risk exposure, by signaling the liability of various tenants. Asset managers and brokers can also use this data to capitalize upon lease statuses – If a lease is almost up, a broker can jump on the opportunity to have the tenant re-lease.

While these benefits are helping businesses run more efficiently, the future of data in this area shows even greater promise. Today, landlords and brokers can track trends across their own buildings, but this is just a small sample and not necessarily indicative of what's going on in the broader industry. This could lead to businesses making assumptions based on internal data that do not play out well in the bigger picture. When combined with aggregated data about the market at large, in real-time, landlords and brokers can quickly validate strategy for their properties, without the inherent risk.

Compare sales and tenants in the market

Comparable sales (comps) give owners and brokers access to information about what buildings and spaces are going for in specific areas. Landlords and brokers use this to more accurately price their own buildings and negotiate leases, resulting in improved profitability.

Landlords and brokers use tenants in the market (TIMs) to understand which tenants are being drawn to which areas, and adapt new tenant outreach accordingly. Seeing multiple government agencies moving into one area might mean it makes sense for a defense contracting company to settle in nearby. Landlords could tailor their spaces to have plenty of private conference rooms with soundproof walls, to attract these companies.

Nevertheless, comps and TIMs data have their own setbacks. All of this data is historical – that means the numbers are often outdated by the time the report hits the broker's desk. Decisions are therefore based off of old information, rather than the current state of the market. Real-time data, by nature, eliminates this time lag and means brokers can be more confident about the deals they're making. It also helps them make those deals faster.

Budget, forecast and valuate

When all of the pertinent data concerning leasing activity and portfolio management is in one place, it makes budgeting, forecasting and valuating properties more efficient. This lets a landlord know if they're devoting too much of their time to one particular building, based on the profitability of the property. For example, knowing what the costs were in repairs and lost tenants for a space over the past five years, signals what funds you may need to allocate for that space next year.

Yet again, there are challenges with this data because it's not accessed in real-time. Waiting for the data to become available means sacrificing speed when making decisions. In an industry where multibillion dollar deals are made every day, periodic access to data that may or may not be outdated by the time it gets to you, won't always cut it. As we move deeper into a data culture, insights will place early adopters ahead of their competition.

Access to broader industry data is the future

Even with the plethora of data available today, market-wide information remains limited. Future growth in the commercial real estate industry will depend on landlords' and brokers' abilities to harness a robust set of industry data revealing broader trends in tenant demand, retention and migration. This information will help minimize losses, because decisions will be made using internal data and a real-time read on the entire market. For example, if a landlord sees experiential retail growing in popularity, they could knock down walls in their retail spaces to make them larger, so they can suddenly market the interactive, collaborative experiences desired by those tenants' customers.

We've come a long way with what we can do with data, but the truth is it's no longer a differentiator for the companies using it – it's the norm. The next big data differentiator in commercial real estate will be real-time access to market data. That is, data that helps us see where the market is going, rather than react to where it's gone. Forward thinking companies that open data access will be the ones to beat their competition, hands down.

Big changes are happening in commercial real estate. That is according to Nick Romito, founder & CEO of VTS. “We're seeing new technology help us streamline workflows and increase collaboration across projects.” And he says that we are not the only ones changing—tenants are undergoing their own industry shifts as well, he says.

Continue reading Romito's exclusive commentary below for more on the subject. The views expressed below are Romito's own.

Just take the experiential retail movement. Giants like Under Armour and Hershey's are moving into bigger, flagship spaces to provide more hands-on, interactive shopping experiences for their customers. This focus on experience extends to office tenants too, who are increasingly drawn to properties with fast-casual dining and gym facilities close by.

So how can landlords and brokers identify these “up and coming” opportunities for tenants, before they've already come and gone? For now, it's a mix of experience, skill and luck. It would be a whole lot more useful if we could predict trends before they happen. We can't right now because access to data is limited. The decisions we make are based off our own internal data, which lacks the context of the full picture of the current market. But it's important to note that this current stage of data insight is important. In addition to saving landlords and brokers precious time and resources by making workflows more efficient, it's also created a growing data culture in the industry. We're on the precipice of the next stage of data, where we expand data analysis beyond internal portfolio insights and combine it with real-time data across the entire industry. The promise of this next stage is precisely the predictive ability we wish we all had.

Reflecting on the data we have today illuminates what's missing, and where there's opportunity for even smarter decisions powered by data.

Portfolio management

Today's access to data allows landlords and brokers to better manage their portfolio. Technology platforms centralize all leasing information, allowing users to seamlessly track interest in their buildings, identify factors driving demand, gage pipeline velocity and assess conversion rates. These metrics empower landlords and owners to make more informed decisions regarding their assets, including the best way to market their buildings depending on current tenant tastes.

Rent roll is another big piece of portfolio management. This includes information on existing tenants like lease terms, billing and lease expiration date, lease rates, what floor they're on and what terms they negotiated. This data is used to determine risk exposure, by signaling the liability of various tenants. Asset managers and brokers can also use this data to capitalize upon lease statuses – If a lease is almost up, a broker can jump on the opportunity to have the tenant re-lease.

While these benefits are helping businesses run more efficiently, the future of data in this area shows even greater promise. Today, landlords and brokers can track trends across their own buildings, but this is just a small sample and not necessarily indicative of what's going on in the broader industry. This could lead to businesses making assumptions based on internal data that do not play out well in the bigger picture. When combined with aggregated data about the market at large, in real-time, landlords and brokers can quickly validate strategy for their properties, without the inherent risk.

Compare sales and tenants in the market

Comparable sales (comps) give owners and brokers access to information about what buildings and spaces are going for in specific areas. Landlords and brokers use this to more accurately price their own buildings and negotiate leases, resulting in improved profitability.

Landlords and brokers use tenants in the market (TIMs) to understand which tenants are being drawn to which areas, and adapt new tenant outreach accordingly. Seeing multiple government agencies moving into one area might mean it makes sense for a defense contracting company to settle in nearby. Landlords could tailor their spaces to have plenty of private conference rooms with soundproof walls, to attract these companies.

Nevertheless, comps and TIMs data have their own setbacks. All of this data is historical – that means the numbers are often outdated by the time the report hits the broker's desk. Decisions are therefore based off of old information, rather than the current state of the market. Real-time data, by nature, eliminates this time lag and means brokers can be more confident about the deals they're making. It also helps them make those deals faster.

Budget, forecast and valuate

When all of the pertinent data concerning leasing activity and portfolio management is in one place, it makes budgeting, forecasting and valuating properties more efficient. This lets a landlord know if they're devoting too much of their time to one particular building, based on the profitability of the property. For example, knowing what the costs were in repairs and lost tenants for a space over the past five years, signals what funds you may need to allocate for that space next year.

Yet again, there are challenges with this data because it's not accessed in real-time. Waiting for the data to become available means sacrificing speed when making decisions. In an industry where multibillion dollar deals are made every day, periodic access to data that may or may not be outdated by the time it gets to you, won't always cut it. As we move deeper into a data culture, insights will place early adopters ahead of their competition.

Access to broader industry data is the future

Even with the plethora of data available today, market-wide information remains limited. Future growth in the commercial real estate industry will depend on landlords' and brokers' abilities to harness a robust set of industry data revealing broader trends in tenant demand, retention and migration. This information will help minimize losses, because decisions will be made using internal data and a real-time read on the entire market. For example, if a landlord sees experiential retail growing in popularity, they could knock down walls in their retail spaces to make them larger, so they can suddenly market the interactive, collaborative experiences desired by those tenants' customers.

We've come a long way with what we can do with data, but the truth is it's no longer a differentiator for the companies using it – it's the norm. The next big data differentiator in commercial real estate will be real-time access to market data. That is, data that helps us see where the market is going, rather than react to where it's gone. Forward thinking companies that open data access will be the ones to beat their competition, hands down.