KIG's Susan Tjarksen on the 'Intersection of Information and Technology'
When it comes to using technology and data to help clients make better decisions, real estate trails other industries. KIG principal/managing broker Susan Tjarksen, one of the panelists at Bisnow’s Multifamily Annual Conference, Dec. 3 in Washington, DC, is changing that, one client at a time. Some key findings: two hot multifamily submarkets you should enter, and a boozy revelation.
Susan believes in what she calls the “intersection of real estate and technology.” She says real estate is one of the last “dinosaurs” that is slow to embrace either tech or data, but that data is absolute and needs to be interpreted to make better, more informed decisions. KIG created a wholly owned subsidiary, KIG Analytics, that takes publicly available data from local government websites like Chicago’s Open Data Portal to create heat maps, regressions and charts showing the growth or decline of development in neighborhoods, based on specific criteria.
KIG Analytics interactive heat maps have shown construction and demolition permit issuances in Chicago over a 10-year period, gentrification patterns in Chicago over a 30-year time frame, an analysis of the Class-A north suburban multifamily market showing how the disparity in per capita income between different markets has influenced multifamily development patterns, mapping out all qualifying TOD areas in the city to show how developers directly and tangentially benefit from being near a TOD, and researching bike commuting trends in Chicago over a 15-year period. Susan says these analytics are ideal for allowing developers and institutional partners to determine emerging neighborhoods.
One multifamily submarket KIG identified from this was South Shore, which is benefiting from the development happening in Hyde Park to the north. Susan says South Shore has always been a sleeper neighborhood. It has a highly educated population and good infrastructure, and it’s a much safer neighborhood than its perception, especially closer to the lakefront. As Hyde Park multifamily development picks up, residents are being displaced to South Shore, where rents are still affordable compared to new builds in Hyde Park.
Another submarket Susan likes is Logan Square. Income growth among the 25 to 40 age demographic in the submarket is the highest in Chicago. Milwaukee Avenue, the city’s busiest street for bike traffic, also runs through the market. Susan says developers should be asking local aldermen to have buffered bike lanes installed near their buildings.
Susan (with KIG managing partner Todd Stofflet) and her team even have fun with the data. KIG’s first analytic report involved cocktails. KIG found River North rents increased an average of 5% on Class-A properties, while employee salaries rose only 3%. KIG then called every bar and restaurant in the neighborhood and found the average price of a martini also increased 3%. Susan’s team determined a renter would have to surrender 224 martinis in order to maintain rent. This indicated that renters would move to more affordable neighborhoods, while still commuting to River North to enjoy the lifestyle. To learn more, attend Bisnow’s Multifamily Annual Conference, Dec. 3, in Washington, DC. Register here.