The Secret Weapon In A CRE Professional’s Arsenal: Data
Successful marketing strategies follow a golden rule: Know your audience.
Commercial real estate abides by the same principle. As more brokers in the industry use data to gain deeper insight on properties, sales history and neighborhood characteristics, that same information can be used in targeted sales strategies.
Using information gathered on nearby properties that recently sold and local demographic data, brokers can leverage observable patterns to prospect deals and buyers.
Brokers can follow activity in the local market to identify the next hot property type. The arrival of a new company HQ, for example, brings an influx of workers demanding not only office space but also housing. Amazon launched a bidding war earlier this month among U.S. cities over where the e-commerce giant will build its $5B HQ, which would bring 50,000 high-paid employees to the chosen location.
As part of the company’s request for proposals, major metropolitan areas in consideration should have access to nearby housing, public transportation and should offer recreational activities.
Using this information, brokers can cross-reference data like median income with existing properties that have sold in the area. Determining whether existing apartments meet the needs of new workers can give commercial real estate professionals insight into whether they should invest in and market existing properties, redevelop them or search for vacant land.
Platforms like Reonomy cut through a property’s LLC to discover ownership and sale history, as well as its assessed property value and key events related to chain of title, like mortgage history. Users can find their next opportunities on a map and pinpoint potential prospects across more than 100 million companies and over 150 million people.
A real estate professional preparing for the potential arrival of a big company could use Reonomy to design a targeted sales campaign.
In New York City, Brooklyn Borough President Eric Adams and Brooklyn Chamber of Commerce President Andrew Hoan launched a "Brooklyn Prime" campaign to position the borough as the ideal location for Amazon’s next HQ. Industry City, a former 30-acre intermodal shipping and industrial complex that has since been converted for creative office and manufacturing use, offers the largest available space. In nearby Sunset Park, a diverse, middle-class neighborhood that has yet to see the emergence of a luxury housing market, median rent hovers at $2,400, below the $3,900 average for the city, according to Trulia. The median sales price in Sunset Park is $550K.
According to the Reonomy database, there are almost 6,000 multifamily properties in the neighborhood. The bulk of these properties, approximately 3,600, are two-family rowhouses (identified as duplexes on the platform). Should Amazon choose Industry City, brokers could use this information to target buyers interested in catering properties to the population of workers with families desiring more space.
With rent more affordable in Sunset Park than elsewhere in the city, another pitch could be made to developers looking to create higher-density housing to attract younger employees. In the neighborhood, 61 vacant lots are eligible for residential development. At 314 53rd St., for example, developers could build a taller residential property under the R6 zoning classification.
New York real estate professionals have access to more data than other markets. The New York City Department of Planning made its data public in 2013, granting developers and CRE platforms access to tax information, zoning plans and financial data across the entire city. Reonomy, which builds its database using a combination of private data partners and local land records, offers a more robust product for users sourcing prospects in the city.
The abundance of information has leveled the playing field, and has changed business practices. Deals are no longer made by CRE players with the most information, but by those who leverage that data to make intelligent, personalized pitches to buyers.
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