Data-Driven Dealmaking: CRE Investors Need Tech To Make The Most Of Opportunity Zones
Since the announcement of the opportunity zone program in 2017, qualified opportunity zones have been the darling of the commercial real estate community. The program has enticed investors, developers and brokers to invest capital gains in economically distressed areas in return for tax breaks. But even with 8,700 designated opportunity zones, competition is growing fierce for a few highly prized locations and properties.
For investors searching for high-return assets, manual sourcing strategies may not be sufficient. Without a technology platform helping them to search through and provide information on properties, OZ investors may be out of their depth.
“The longer it takes for investors to find potential properties, the less likely they are to reach a deal before the competition,” Reonomy Vice President of Product Patrick Rafferty said. “But investing in CRE tech can help investors, developers and brokers find assets faster and arm themselves with the information to make better deals.”
CRE tech platforms are simplifying and accelerating the search for properties, which is especially useful for investors interested in the competitive search for opportunity zones, where time is of the essence.
Advanced tech platforms like Reonomy are powered by a wealth of off-market data, which until recently was hidden from much of the CRE industry. But CRE data has recently become increasingly available.
“What was once a fragmented and exclusive data landscape is now accessible to professionals of all levels of sophistication," Rafferty said. "Reonomy can show investors the 6.8 million different assets located in opportunity zones in a single sweep, including 339,400 multifamily assets, 123,700 industrial assets and 82,500 offices.”
Having off-market data is crucial for investors, Rafferty said. Unlike sales listings, which offer a lopsided view of the real estate market, off-market data includes both listed and unlisted properties, widening a user’s scope and increasing their chances of finding viable properties. Unlisted properties are still useful for market research; CRE tech platforms allow users to identify assets that are likely to be listed soon based on historical sales and debt data.
But when it comes time to negotiate the best deal for an opportunity zone property, investors need more than the face-value numbers. Rafferty said that having physical and geospatial information like lot size and asset type, as well as transactional information, such as sales, debt and ownership records, can help investors and brokers tailor their pitches and create a compelling argument as to why owners should list or sell their property.
“All this information would require a mountain of work to track down manually,” Rafferty said. “But having a CRE technology platform allows users to instantly see details about individual opportunity zone assets.”
Along with those property details, Rafferty said, CRE technology has also taken ownership records out from behind the veils of LLCs, making it easy to reach decision-makers directly. Instead of getting stonewalled by corporate gatekeepers and ambiguous LLCs, tech users can find owners’ information instantly.
Having owners’ phone numbers, emails and mailing addresses can help investors court and market to leads more effectively.
"Simply put, platform users can craft a more personalized pitch and strike stronger opportunity zone deals well before those who don’t leverage technology," Rafferty said.
To make the most of opportunity zone properties, investors, developers and brokers need to hone their tools and strike deals before others do. With CRE technology backed by off-market data, investors can make sure they find the deal they want.
This feature was produced in collaboration between Bisnow Branded Content and Reonomy. Bisnow news staff was not involved in the production of this content.