Data and Analytics Are Fueling Off-Market Multifamily Deals

It is no secret that the pandemic cemented multifamily as the darling of commercial real estate investment. Its strong performance has driven a new level of exuberance for apartment investment, and off-market transactions have always been one tool that investors have used to win deals.

“The increase in off-market multifamily deals has absolutely been impacted by the pandemic. We have seen by-and-large investors looking in secondary markets, like Phoenix, Raleigh and Austin,” Kevin Mattice, chief product officer at Cherre, tells GlobeSt.com. “As people have moved to these markets, a supply demand problem has emerged, and developers are struggling to keep pace with the apartment demand. “That has really kicked off an increase in off-market transaction activity.”

However, in the post-pandemic landscape, even an off-market deal looks a little different. Now, investors are leveraging data and analytics to gain informed strategic offers and gain market share while maintaining a competitive advantage. “From a potential seller’s mentality, the second that you see a dollar value assigned to your home, an asset that you never imagined selling all of the sudden becomes very tempting because there is cash at your door. It is the Kelly Blue Book instant cash offer model. That works really well,” says Mattice.

Cherre’s unmasking tool is doing just that. It analyzes big data sets to deliver a trusted property valuation that a buyer can use to make an offer. “This is an effective tool for companies and funds that are buying assets because they can really trust the data to evaluate a property,” explains Mattice. “You can’t attack a market at scale with a cash offer unless you can really trust the data. Now that we can pull all of the data together that is needed to make those decisions, it is a lot easier for a company to go out to the market.”

The tool has been a major benefit to investors, who are not only able to make more informed decisions but also can give their internal engineering teams higher value tasks to achieve even better outcomes with the data. :The major value proposition for most of our clients is that their science and engineering teams are focused on the model to give them the competitive advantage,” says Mattice. “They don’t want to spend all of their time pulling data, cleaning and standardizing the data before they can even build a model.”

Companies realize that they need data, tools like this are helping them secure the right information and leverage it to achieve their investment goals.