Though they may not think of themselves as data companies, most commercial real estate firms have quietly been collecting data for years. Whether it’s property management data, leasing data, investment and transaction data, rent collection data or even basic accounting data, these companies have stockpiled decades of information about assets, trends and pricing.
Yet much of this data is sitting inaccessible in digital warehouses. Even if the data is accessible, it’s often not consolidated, and firms lack the framework to compare data sets and start extracting insights that can lead them to find better deals and make better decisions.
Understanding data is not just useful for finding new business, but for reducing operational costs and safeguarding existing business.
“Especially with the pandemic, owners, property managers and investors are more focused on lowering their operating costs, because every dollar counts,” said Lynn Peters, vice president of global operations at Retransform, a company that provides technology business process management solutions for the CRE community. “Data analytics and artificial intelligence can predict outcomes and spot anomalies in data sets that humans may otherwise miss, helping them safeguard their businesses by preemptively catching mistakes and reducing expenses.”
Retransform has launched a cloud-based platform, 4see Analytics, to help CRE companies aggregate and decipher the data that they have collected and derive actionable insights through artificial intelligence. The platform can also provide third-party and external benchmarking data to understand more about how their properties are performing while keeping up with competitors.
4see not only presents historical data, but also detects patterns in old data to help avert mistakes that businesses have made in the past.
If their tenants experience financial distress, CRE owners can sometimes be left in the lurch, with broken leases and vacant space. By parsing historical data, 4see can anticipate the implications of a potential bankruptcy before it happens, allowing owners to work with the tenant to keep them on or find a new tenant before disaster strikes.
Even at large CRE companies, business errors can be rampant, especially if the firm uses homegrown or outdated solutions. Those mistakes could mean overpaying for maintenance, forgetting to increase rent or failing to reach out to tenants for renewal.
“When the only tools being used are manual, the possibility for human error is very high,” Retransform Regional Director for Europe Oliver Freedman said. “When your data isn’t unified on a single platform, mistakes tend to carry over and survive a lot longer. Bringing that all into the light with technology can save serious income over time.”
But excavating and aggregating data is only half the battle; employees actually have to use it. Retransform has outfitted 4see Analytics with an AI-powered voice assistant that can respond to over 200 unique questions to help users navigate their data. By making data simpler to find and use, the Retransform team hopes that CRE companies will use it more often.
As well as seeking out errors, 4see Analytics can work to lower operational costs by examining external data. For instance, Peters said, an owner can map global weather data against their assets’ heating and cooling costs. 4see can then identify which assets are the most inefficient and costly, and thus the best candidates for an upgraded HVAC system. Freedman cited another client that used Retransform’s data analytics to examine the cost of yearly snow removal at the buildings in their portfolio. 4see identified a handful of buildings that were very clearly overpaying for the cost of snow removal, prompting the owner to renegotiate the contract.
“If you can save $200 at five different properties every time it snows for five years, that starts to add up to real savings,” Peters said.
Perhaps the most important savings that 4see provides is time. By automating many of their mundane tasks — whether searching for errors in rent rolls or combing through listings for new acquisitions — the analytics platform can free employees up to focus on more important, value-added tasks like sourcing new business, mitigating risks and cultivating tenant relationships.
Peters said the Retransform team is already planning the next rounds of updates to make the 4see Analytics platform even more powerful for its users.
“We’re taking feedback from the clients we work with to solve the next generation of problems,” Peters said. “Automation is not just on the horizon. It’s here, and those that don’t implement it could be left out in the cold.”
This article was produced in collaboration between Retransform and Studio B.