CRE Stakeholders Pay Good Money For Data. The Right Platform Can Help Them Use It
Commercial real estate has always had a unique problem when it comes to data.
While other industries have scores of solutions that connect all of their core data, CRE has spent years viewing information in silos. Investors and managers might view Trepp data in one place, CompStak data in another and then key property metrics in yet another platform. All those warring data points make drawing connections nearly impossible.
“In any other industry, adding in new datasets is easy, because you can build off of core data systems that have already been connected, but in real estate, we still don’t have that basic framework,” said L.D. Salmanson, CEO and co-founder of Cherre, a solution that connects siloed real estate data and establishes a single source of truth for the entire organization. “This means that people are paying a lot of money for great data, but they’re not unlocking the value that can come from being able to easily connect and compare it.”
Salmanson said that in recent months, as in-person property tours and investment meetings have become nearly impossible to conduct during the coronavirus pandemic, CRE stakeholders have to rely more heavily on data to get the property insights they need.
Bisnow recently spoke with Salmanson to learn more about why it has taken so long for the industry to properly embrace connected data and the role he sees data playing in the future of CRE.
Bisnow: How has the data landscape changed over the past few years for real estate?
Salmanson: For years, the CRE industry has made the most of single-stream data sources like Trepp, [Real Capital Analytics] and CompStak, and now, owners and investors have gotten everything they can out of each individual source on its own. The challenge then becomes: Now that we’ve maximized value from single data sources, how can we start connecting them all to glean better insights?
Bisnow: What has kept companies from investing in data sooner?
Salmanson: In the past, there was no way to buy data from vendors like REIS, RCA and CompStak and easily connect them on the fly. A firm would have to invest considerable time and money to build out an architecture that would connect disparate data, and most firms weren’t willing to do that, so they focused on the data that was most important to them rather than seeing the bigger picture.
It's hard for a firm to justify spending millions of dollars over many years, but they wouldn't have to if there was a solution that could allow them to leverage all this data in a financially feasible manner. This is where we come in.
Now, thanks to platforms like ours, we’ve gotten about as close to plug-and-play as you can imagine. Cherre allows investors to add in data from different datasets and watch it flow in so they can find fast, actionable answers to their questions.
The Cherre platform is especially important as CRE stakeholders are realizing that technology and data are going to be key tools to help them through the pandemic.
A global survey of CRE professionals conducted by EY and CRETech found that 78% of respondents have rethought, or expect to rethink, their technology strategy and how they adopt new technology tools since the start of the pandemic. According to EY, this move is inspired by the fact that the pandemic has forced companies to reimagine their operations in order to get more value from the assets in their portfolio.
Bisnow: Why has it been such a challenge to connect data from different datasets?
Salmanson: Two big challenges stand between data on one side and answers on the other. The first issue is how to get data from its source, reliably move it somewhere else and make it organized, clear and ready to work with other data. There are a lot of things that can happen to data to stop it from coming from its source to where it needs to be, for instance, maybe a connection will die or maybe the source will change one day.
The second challenge is that if real estate firms really want to resolve different datasets with one another, they need to manually go through it all and determine how each set connects to the other. It takes an extremely long time to determine if a piece of data is referring to a whole property, or the land it’s on, or just one unit, or the owner. Trying to connect all that data is nearly impossible unless you have a platform like Cherre that can analyze and identify it for you and quickly tell you how it’s all connected.
Bisnow: How can data help the CRE industry make smarter decisions about their properties and portfolios?
Salmanson: I like to divide CRE stakeholders into two categories: the people who are purchasing properties and the people who are managing properties they have already purchased. The second group is running an ongoing machine that’s constantly checking what they own, where they own it, what their risk exposure is and so on. This involves many people spending many hours answering things manually, and in the end, they still can’t always be confident in their data, especially in large firms where there are so many assets to keep track of.
These folks need instant answers, and they need a solution where they can press a button and have all of their data from various datasets connected right in front of them. This way, not only will they be able to quickly see what they own where and where their exposure is, but they can also view external benchmarks and how they’re performing versus their peers all in one place. Just a couple key data points can save these large companies millions of dollars.
The other group, those that are trying to purchase assets, are usually given a portfolio from a broker or somewhere off-market and are trying to quickly analyze all of the data they are given to make a smart, high-yield, low-risk decision. They need to see Trepp, RCA, CompStak and thousands of other datasets to determine how an asset will perform. It is only possible to quickly connect and compare all of that data on the Cherre platform.
As the industry continues to slowly embrace data, we’ll continue to work to help major data sources get comfortable working together in a way that is still competitive but will ensure that our clients have all the analytics they need to make the best possible decisions.
This feature was produced in collaboration between the Bisnow Branded Content Studio and Cherre. Bisnow news staff was not involved in the production of this content.