Understanding Real Estate Data Visualization: ItÕs about...
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T here is an axiom that you “Manage What You Measure.” For example, if you are a Shopping Center portfolio owner, you want to ensure that you have the right mix of tenants to support the rent levels that you are expecting. To do that, you need to track, measure and benchmark your merchants across multiple key performance indicators (KPIs), including Retail Sales and Target Occupancy Costs by category and subcategory. Let me give you an example of how tracking Occupancy Costs can give you an information advantage. Occupancy Costs are a measure of rent plus the tenant’s share of property expenses, expressed as a percentage of the retailer’s sales. Say you have a dozen Subway operators dotted across your portfolio. If you know the range of Occupancy Costs that your Subway franchise’s support, you can quickly surmise who is paying too little rent, and who is at risk of defaulting. Such push button introspection can tell you where you should be bullish, where you should be bearish, where you should be the buyer, and where you should be the seller. It can lead you to look at your other Sandwich merchants, Fast Food operators and Restaurants, all the better to distinguish between ascendant and descendent categories. Similarly, if you want to build a team of Property Managers that prudently manage Expenses and Rent Collections, you need to surface and visualize the data that enables you to compare Property Managers’ performance to one another— based upon the KPIs that drive your business. Data is Power: An Industry Woefully Unprepared This simple analysis raises an obvious question. Why are so few real estate companies set up to track and manage these metrics? Is it really that hard? The notion here is that the Big Data revolution is upon the real estate business. Real Estate is, in so many forms, an information business. Any process that can capture, categorize, systematize and surface the data that drives the business is a good thing. Smarter data leads to better decision-making. Pulling data out of spreadsheets and into unified systems encourages collaboration and cultivation of best practices. The evolution of manual, high touch and error prone activities into workflow based automated tasks creates new efficiencies that can change the game, especially for grow- ing real estate portfolios. Understanding Real Estate Data Visualization: It’s about KPIs and Decision Support Mark Sigal Chief Product Officer Datex Property Solutions A Reprint from
Transcript of Understanding Real Estate Data Visualization: ItÕs about...
There is an axiom that you “Manage What You Measure.” For example, if you are a Shopping Center portfolio owner, you want to ensure that you have the right mix of tenants
to support the rent levels that you are expecting. To do that, you need to track, measure and benchmark your merchants across multiple key performance indicators (KPIs), including Retail Sales and Target Occupancy Costs by category and subcategory.
Let me give you an example of how tracking Occupancy Costs can give you an information advantage. Occupancy Costs are a measure of rent plus the tenant’s share of property expenses, expressed as a percentage of the retailer’s sales. Say you have a dozen Subway operators dotted across your portfolio. If you know the range of Occupancy Costs that your Subway franchise’s support, you can quickly surmise who is paying too little rent, and who is at risk of defaulting.
Such push button introspection can tell you where you should be bullish, where you should be bearish, where you should be the buyer, and where you should be the seller. It can lead you to look at your other Sandwich merchants, Fast Food operators and Restaurants, all the better to distinguish between ascendant and descendent
categories. Similarly, if you want to build a team of Property Managers that prudently manage Expenses and Rent Collections, you need to surface and visualize the data that enables you to compare Property Managers’ performance to one another—based upon the KPIs that drive your business.
Data is Power: An Industry Woefully UnpreparedThis simple analysis raises an obvious question. Why are so few real estate companies set up to track and manage these metrics? Is it really that hard? The notion here is that the Big Data revolution is upon the real estate business.
Real Estate is, in so many forms, an information business. Any process that can capture, categorize, systematize and surface the data that drives the business is a good thing. Smarter data leads to better decision-making. Pulling data out of spreadsheets and into unified systems encourages collaboration and cultivation of best practices. The evolution of manual, high touch and error prone activities into workflow based automated tasks creates new efficiencies that can change the game, especially for grow-ing real estate portfolios.
Understanding Real Estate Data Visualization: It’s about KPIs and Decision SupportMark SigalChief Product OfficerDatex Property Solutions
A Reprint from
Data Visualization: Getting StartedBased upon lessons learned from the best practices employed by market leaders in the Commercial, Retail, Multi Family Residential and Investment Management segments, a successful Real Estate Data Visualization strategy reconciles three central truths:
1. End Users are Non-Technical: Experience has taught us that users embrace systems that allow them to begin with Pictures, Charts and Graphs, and then Drill Down to the Details. Real Estate Data Visualization must be simple, visually impactful, and easy to slice, dice and navigate.
2. Garbage in is Garbage Out: The best approaches leverage existing data, which means that they must integrate seam-lessly with existing Property Management, Accounting and Accounts Payable packages. The number one reason that data visualization projects will fail is that data integrity and data flow is inconsistently applied, and therefore, broken.
3. Decision Support: When done right, your Real Estate Data Visualization efforts can provide better decision making sup-port from Tenant to Property to Portfolio to Line of Business. Therefore, there is merit in taking inventory of your desired out-comes, key stakeholders, their roles and responsibilities.
A Shopping Center Developer Ups Their GameConsider the lessons of NewMark Merrill, a shopping center developer with a portfolio of 80 shopping centers, 10M square feet of retail and 1,500 tenants across three states. Over the past five years, NewMark Merrill evolved its data analysis efforts from simple dashboards, and one trick reporting tools, to a fully integrated enterprise. The solution that they built over a series of phases and iteration sprints, includes dashboards for visualizing and navigating all facets of the business. This includes Tracking KPIs for Revenue Sources, Total Asset Values, Equity Fluctuations, Vacancy History, Occupancy Percentages, National Tenant views, Move ins, Move outs, Renewals, Sales Per Square Foot, Open Balances, Budget Variances, and the list goes on.
With an eye to avoiding double entry of data, becoming more agile and efficient, their system deeply integrates with their MRI Software
Property Management and Accounting package, leverages their AvidXchange Accounts Payable data, and provides secure, user and role based access and control. But the proof is in the pudding. Not only is NewMark Merrill entering its 19th year of business and growing strong, but the Data Visualization solution is yielding a 40% return on their investment. wAs never before, Data is Power.
Mark Sigal is the Chief Product Officer of Datex Property Solutions, makers of a Real Estate Business Intelligence and Data Warehouse solution called Datex Business Intelligence (Datex BI). He is a five-time entrepreneur, with exits to Apple, IBM and Intel, a deep real estate background, and a track record of consistent success working with global enterpris-es, including Disney, Macmillan, Ford, UPS and Cisco.
