Why Real Estate Needs Location Data Technology More Than Ever
After two tumultuous years for real estate, things are beginning to improve. People are headed back into the “real world.” Office spaces are leasing again. Businesses can start opening new brick-and-mortar storefronts, as data shows foot traffic is returning to restaurants, shops and movie theaters. Even urban areas are seeing somewhat of a comeback, with multifamily homes filling up again and rent costs expected to rise this year.
But, as we saw in March 2020, all of this progress could be lost in an instant. Real estate professionals need to stay on top of changing trends through detailed location data that makes sense of consumer patterns, location changes and human movement.
“Gut feeling” and inherited wisdom will not work for this market anymore; after the pandemic, too much has changed. Workplaces are embracing the hybrid model, with limited time in the office. Experts predict a migration of homeowners from the Sun Belt to more affordable Midwest cities, shifting demographic maps. An uncertain construction supply chain and rising interest rates designed to slow inflation will raise prices and make building schedules more unpredictable.
Only better data can find patterns within this chaos.
The old ways of collecting this data are outdated and can’t keep up with the constantly shifting market. According to a recent study, 60 percent of commercial real estate professionals report they struggle to make timely investment decisions to keep up with shifting market trends. Up to 58 percent admit they still rely on outdated or static data and tools to make business decisions. Relying solely on census data and other collections of manually collected numbers is limiting. Instead, reliable insights come from tools like POI data, foot-traffic pattern visualization and granular demographics – ideally, all in one tech platform.
Location data can help real estate professionals make better decisions. For example, the right platform and data allow you to pick a potential site and determine the potential success for an establishment in the area, based on foot-traffic patterns. Those patterns can be granular, broken down into specific times and demographics. The right tool will not only detect but also visualize hidden trends and movement patterns through interactive maps.
This predicts and identifies the up-and-coming areas of tomorrow, so you can invest early and select new sites strategically. The data sees the potential of a place before any human can. Furthermore, location technology supports stronger marketing and sales activities, such as showcasing properties via interactive maps.
This isn’t just about your company’s profit, either. It’s about creating the best opportunities for your customers. Better data allows you to communicate clearly and transparently, so all parties in the decision-making process have better insight. For example, a customer inquiring about walkability will get more insight with location data; real estate professionals can cross-reference existing walkability scores with foot-traffic patterns for accuracy and context. Location intelligence can also reduce tenant turnover, matching tenants with properties that are statistically compatible. Better data makes the sales or renting experience more efficient, informed and valuable for all involved.
The fact of the matter is, if you aren’t utilizing location data in your real estate decision making, you’re already behind your competitors. In a new survey of real estate professionals, 92 percent of executives anticipate increasing spending on location technology in the next two years. It’s a wise investment; 53 percent of digitally driven executives report that location intelligence improves their internal rate of return, 51 percent report that location intelligence has increased their rent per square foot, and 49 percent report that location intelligence has positively influenced their equity multiple.
This industry is no stranger to change, and real estate professionals are an adaptable bunch. Now, at the forefront of the data revolution, the industry can continue its comeback with a little help from location technology.
Ariel Eck is the director of B2B marketing at Foursquare, a location data platform.
