Maximizing productivity and profitability in business boils down to three things: location, location, location, and companies now have better access to deep spatial insights thanks to the Big Data boom.
It’s November 2012 in New York and the city is wading through the aftermath of hurricane Sandy, which flooded a large portion of Manhattan and forced businesses across the city to close, including the New York Stock Exchange.
The environmental impact was catastrophic but the economic fallout amounted to billions of dollars for businesses based in the city’s flood-affected buildings.
“When the hurricane hit New York, I did a quick analysis of the flood risk for all of our buildings,” says Dr Wayne Gearey, who leads JLL’s global data science operation. “It turned out that buildings I thought would flood did flood.”
By mapping the data that surrounds real estate, Gearey and his team of data scientists are able to calculate the risk of such events. While no system can promise to mitigate the risk posed by Mother Nature, data analysis allows businesses to assess the economic toll.
“Risk itself is becoming a bigger issue for businesses,” adds Gearey. “We have a great understanding of rental rates and the different geographical components that affect them, but that’s a very macro picture; we’re also able to look at data on much more of a micro level.”
The role of data in corporate real estate is not an easy concept to grasp.
All real estate produces data; from occupancy rates to rental values and tenancy expirations, to maintenance issues – how often the lifts break down in a skyscraper – for example. But what about the bigger issues that affect property around the world? Does a company occupying an office know where the available workforce is within an easy commute? Or, more specifically, whether this workforce is the right cultural fit for their business. What about weather patterns; is the property subject to flooding? Or is political upheaval likely to affect the area?
By creating a customized data set for clients, Gearey’s team is able to combine traditional real estate information, such as lease expires and rental values, with social, economic, geographical and even political data points that may affect the space they occupy, or intend to occupy.
“On a micro scale we can start to model where a business is located around availability of labor, for example, and how that overlays with availability of real estate. We can access competitor data – that has an impact on whether a labor force is being cannibalized,” he adds.
JLL’s location services team is connected to clients in 28 countries, from technology companies to distribution firms, retail businesses, and corporates across every sector. They expedite everything from space consolidation to overseas relocation and the firm’s own unique data insight tool, Map It, combines a series of widgets and data sets that can be selected ‘to address specific business objectives’.
Geary explains what this means in practice: “We customize an app for them that uses our data and their data to create a map around their Corporate Real Estate (CRE). Databases by themselves are very hard to understand but when you visualize that information you can certainly make quicker decisions.”
A business entering India for the first time, for example, is likely to be unfamiliar with the general business landscape, let alone the availability of property or workforce.
“We help them to understand what they’re dealing with by mapping it out,” says Gearey.
This spatial mapping looks beyond the availability of space and competitor locations. “We look generally at the market and what’s going on with changes to infrastructure,” he explains. “For example, we can help them to assess issues such as the geopolitical situation, sustainability and longevity of labor; we can see live traffic patterns, amenities near certain locations such as healthcare facilities. This can all be seen on an iPad.”
Social media for CRE
Plenty of companies have profited from the proliferation of ‘Big Data’, the media-friendly term which means many things to many businesses. But for property, data is a ‘game changer’ according to Gearey who, in 2012, was selected to offer the first applied course on Location Intelligence at the University of Texas in Dallas, USA.
A recent report estimates that the market for location-based services will grow from US$12 billion in 2014 to US$43 billion in 2019.
“This is social media for CRE,” adds Gearey. “We’re able to show clients that we understand their story.”
In one example, Gearey explains how a brewery client was searching for a new facility: “They have a very specific work culture and we could tell them where they could find people who fitted this culture.”
The ever-increasing density of data requires insights to go deeper, and mobile technology is playing a pivotal supporting role. Harvesting iPhone location data, for example, means landlords can directly correlate rental values to the concentration of iPhones and JLL is working with existing spatial mapping platforms such as Google, Bing, Esri and Apple to bring this more robust data to the property sector.
“Data gives people options; we can show clients that we understand where their business is today but also where it will be tomorrow,” adds Gearey.