How Landlords are Utilizing Business Intelligence to Drive Portfolio Performance
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The concept of Business Intelligence (BI) is a philosophy that’s been around for about 20 years, but has only started gaining traction in the commercial real estate industry more recently, mostly due to the increased adoption of technology. Simply put, BI refers to the tools and techniques used to translate raw data into meaningful and actionable information. What does that look like in practice for commercial real estate?
A real-world example – one of the biggest names in real estate, Blackstone (BX). Upon acquiring Chicago’s iconic Willis Tower, Jonathan Gray, Blackstone’s Global Head of Real Estate and his team used portfolio management solution, VTS, to track tenant demand and rental rates, among other data, in real-time. Seeing strong demand and net effective rental rates rising on a real-time basis, the team realized the strength of the market and quickly moved to purchase nearby River North Point for $378 million.
“Landlords, asset managers and brokers need to be using their data as their competitive advantage,” said Nick Romito, Co-Founder and Chief Executive Officer of VTS, a Manhattan-based technology firm whose platform enables landlords and brokers to centralize data from multiple sources (accounting and budgeting systems, for example) into one platform, giving them access to critical insights across their entire portfolio.
“Every single day costs money, and if you’re not leveraging your organization’s goldmine of information to improve your portfolio’s performance, you could be losing vast amounts of money or missing lucrative opportunities without even realizing it.”
As real estate organizations embrace portfolio management technology, the value of seeing the health of an individual asset or tenant in the context of a wider portfolio is becoming increasingly evident. Landlords and asset managers are seeking tools to help them access and understand macro, real-time portfolio and market trend information instantly, and then translate such information into decisions that drive significant revenue. VTS is one company that is meeting such demand.
“We’re constantly listening to feedback from our customers about how data technology can help them be more effective in making decisions to capitalize on opportunities or avoid risk,” says Romito. “Business intelligence is one area that we recognized would add immediate value for our users.”
The firm recently announced the expansion of its BI offerings, with a suite of products designed to help landlords and asset managers glean the insights needed to reduce downtime, close deals faster and better retain tenants. Thanks to data visualization, users can easily understand important portfolio health metrics, as well as deal and pipeline activity, in real-time, and take timely action where required.
The data visibility and transparency that BI affords allows landlords to make better, more informed decisions, at a pace aligned with business velocity, said Jim Whalen, the Chief Information Officer at Boston Properties, one of the largest owners, managers and developers of Class A office properties in the United States and the country’s largest office REIT. Also a VTS customer, Jim notes that integrations are a key component in extending enterprise data into platforms like VTS thus enabling and driving elevated user adoption. This has been key in the success they’ve had rolling out VTS across the portfolio.
“What we’re seeing is that the world’s largest real estate investors are beefing up their asset management capabilities and technology is a big part of that strategy.” said VTS’ Romito. “The last thing you want to do is rely on someone else to tell you what’s happening in buildings across your portfolio. You need technology to do it.”
