De-mystifying Big Data for Buildings
For some, the term “big data” can conjure an image of an endless, ever-growing mass of unwieldy numbers and figures that would take a half a century to wrap your head around. Wrangling this data can seem like a full-time job (and indeed, it is for some), but the insights gleaned and lessons learned are more than worth the effort.
“What is amazing about this industry is that the large players are bringing on technology and hiring data scientists,” Robert Courteau, CEO of the Canada-based Altus Group, observed in an interview with Propmodo. “With the mountain of data that is available to us, the ability to project the performance of an asset is becoming more clear ... We will be able to marry big data and demographics to be able to understand trends and trajectory. The people that will be good at this will be the people who will make money.”
Courteau is positioning Altus Group to be among those who see success in deciphering the messages delivered through big data – the firm is one of the top real estate portfolio advisory and consulting firms, and acquired ubiquitous CRE modeling and valuation software ARGUS in 2011. Altus Group is a long standing member of OSCRE, a data standards organization for commercial real estate, and hopes to create a global valuation standard and a global data standard for how people manage and collect assets.
The NAIOP Research Foundation offers an up-to-the minute look at the big data’s implications for commercial real estate with a new white paper, The Office Property and Big Data Puzzle: Putting the Pieces Together. The report seeks to define big data and to identify some of the obstacles and opportunities associated with it in the context of managing office properties.
Several critical takeaways presented in the report deserve the attention of the real estate industry in general and the office sector in particular. A brief sample of the areas covered:
- Big data sets are more than just big. They are dynamic and multidimensional and can be challenging to work with, but they promise to give greater insight into some of the fundamental questions of real estate more than anything has before.
- The concept of big data is not solely about the data; it is also about the tools created to deal with the data. The collection, storage, analysis and visualization all present unique challenges that require innovative and ongoing solutions.
- Small data is still important. Real estate markets are local: to make big data meaningful, sometimes the data need to be selected and sorted to such an extent that they are anything but big.
- Office property managers are comfortable using nonpersonal big data to monitor and improve the performance of building systems but, in part because of privacy concerns, they have not yet embraced tracking tenant movements to improve the tenant experience.
- Landlords and tenants must approach data collection with a clear understanding of privacy laws and a great deal of transparency. Personal information should not be collected or, at the very least, records should be anonymized. Data should be released only in the aggregate, if possible, and systems should be put in place to ensure the security of the data.
- Big data is spurring new technologies and disciplines that affect the real estate industry. For example, blockchain technology will have an increasingly larger role in data management and property transactions. The need for job positions such as data scientists, data stewards and data visualizers will continue to grow as companies take stock of their data sets.
Read the full white paper online and download the PDF to share with colleagues, and access all of the Foundation’s valuable research online to better inform your business decisions.