Real Estate Data Analytics: 6 Key Drivers of Investment Insights

real estate analytics
Matt Carrigan

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This blog post was last updated on Wednesday, June 29th.

The commercial real estate investment management industry is transacting faster than ever, and the ready availability of data has played no small role in this ongoing transformation. Data has been at the CRE industry’s core for decades; firms have always collected and analyzed data to bolster decision-making. New real estate analytics software, and particularly deal management software, now allows investors to systematically leverage their data to make both day-to-day and mission-critical decisions faster, simpler and easier. Unlike raw data, investors can easily slice and dice data in commercial real estate analytics to answer questions.

Now, with data at their fingertips, investment deal teams can screen deals in minutes–a process that might previously have lasted hours or days. In this blog post, we’ll outline why real estate analytics software has become key to growth in today’s market, as well as the six key value drivers fueling speed and scale. 

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Understanding the New Age of Proprietary Real Estate Analytics Databases

It takes significant time to collect, maintain and analyze data–time that’s better spent evaluating more deals and scaling deal flow. Real estate analytics software, like deal management platforms, are making each step of this process easier. 

As investment management firms screen, reject and execute on deals, real estate investment analysis software programmatically adds corresponding deal data to an ever-growing cloud-based database. Real estate data analytics platforms allow firms to easily screen investments, leveraging historical deals as benchmarks, solving the organization issues presented by spreadsheets–a key competitive advantage in a market where the fastest players succeed. Real-time visibility empowers investors to act faster and with greater precision, quickly determining which deals to reject or pursue. 

The 6 Key Drivers of Modern Real Estate Analytics in Property Technology

Commercial real estate data analytics can take the form of various real estate investment software categories. Across the board, though, insightful analytics that make systematized deal analysis possible hinge on a few key value drivers. 

1. Standardized Data

As recently as a few years ago, it was not uncommon for firms to store data on different spreadsheets, often in varying formats. Prior to analyzing deals, firms would first need to undertake the tedious task of converting data into one consistent format.

The new standard for real estate analytics is data standardization, which allows for true apples-to-apples comparisons. Firms can quickly compare cap rates on historical deals of the same asset class or market, without concerns like structure, inconsistent terminology, and other variables that previously muddled this process. For example, standardizing the format in which the walk score on a retail property is stored creates the possibility to pull a report of pipeline deals including that score later on. As a result, firms with the right platforms can analyze deals in a more programmatic, scalable manner. 

2. Access to Real-Time Data & Insights

When the data itself is outdated, data-driven insights offer limited value. How can you confidently evaluate investment decisions based on outdated benchmarks? To ensure investment managers can glean relevant, timely insights, leading real estate analytics software like Dealpath provide real-time visibility into both pipeline and historical data.

Rather than forcing busy teams to manually update data, anyone within the organization can view up-to-the-minute data. This transparency enables investment managers to uncover the most profitable opportunities with confidence that market comps are accurate and up-to-date.

3. Integrated Third-Party Datasets

Third-party data can add valuable market context and further bolster investment decisions. For years, firms have accessed this valuable information by purchasing it–but learning from it required significant time. Real estate analytics platforms position this crucial data alongside proprietary data, centralizing all relevant data in one command center. 

For example, Dealpath’s esri integration presents demographic and business-related data pertaining to the specific city, which can help provide broader context about the market, as well as ESG-related information. When considering options, be sure to select a solution with an open API, which makes it possible to aggregate even more data.

4. Digitized Deal Comps

Historical deals from the same market are a much-needed benchmark for pipeline opportunities, but conventional storage systems make tapping into this intelligence challenging. Digitizing these dead or owned deal comps within real estate analytics software enables investment managers to make these comparisons with ease.

As new deals enter the pipeline, deal teams can slice and dice this data by market, deal size, deal type and other variables to pinpoint relevant comps. By building these operational efficiencies with real estate analytics, deal teams can scale their pipeline to review even more deals. This seamless access can also behoove late-stage discussions, when business stakeholders request additional comparison points prior to executing. Dealpath’s CompStak integration offers deal teams a seamless way to find and review this data–all in one place.

5. Operational Real Estate Deal Analytics & Strategic Insights

Beyond the deal screening process, data can also play a large role in long-term investment and strategic business decisions. Centralizing all deal data within real estate investment analysis software lays the groundwork to surface insights about which deals are, ultimately, the most profitable, driving the business’ strategy forward. 

By tracking the length of every deal, you can determine how long deals typically take based on the type, location, property type, and other variables. For example, if you determine that industrial deals in California typically require more time to close than those in Oregon, it might make sense to priorizite Oregon deals. Alternatively, it may become clear that New York-based multifamily debt deals have a higher close rate than those in Boston. By managing deals in one place, your firm can analyze deal flow through a new quantitative lens, driving even more exponential growth. 

6. Automated Reporting

Traditionally, pipeline reporting is a time-intensive endeavor that requires collaboration and significant data entry. Real estate data analytics platforms like Dealpath have shifted this paradigm. The new standard has become automated reports that enable stakeholders to effortlessly keep a pulse on pipeline and market activity.

Instead of requesting a report from a team member, delaying priorities like deal execution, teams can automate reports at a designated cadence. Filters based on data fields make it possible to segment reporting by certain markets or other variables, helping stakeholders to find the answers they need without digging. Dealpath’s reporting can also be modified, ensuring each stakeholder receives the information relevant to their needs. With consistent access to reports curated by deal type, size, markets and more, they can gain streamlined visibility into pipeline activity and make projections accordingly. 

The Proptech Companies Powering Commercial Real Estate Analytics

As commercial real estate’s digital transformation continues, proptech companies are ensuring that firms have streamlined access to the information they need. While there are many more, these are some of the proptech companies powering commercial real estate analytics:

  • Dealpath: real estate’s most trusted deal management solution that empowers institutional investors to grow top-line revenue and build operational efficiencies with real-time visibility.  
  • Real Capital Analytics: a CRE database with over $40 trillion in recorded commercial property transactions providing investment management firms and other organizations with actionable data about market pricing, capital flows and investment trends
  • Compstak: a crowdsourced platform that provides  commercial lease comps, sales comps, and property details to simplify investor decisions
  • Cherre: a data platform allowing firms to connect disparate data sources

Expedite the Deal Review Process Without Overhauling It

Your investment process has driven your firm’s success. Rather than adopting new technology that reinvents your day-to-day operations, your priority should be to enhance your existing pipeline process for simplified scalability. Download this white paper to learn why it’s crucial to understand how new technology affects your internal process, as well as the strategic benefits of onboarding new technology that will streamline your process.

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Matt Carrigan

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