By Brad Cribbins
There is no shortage of market data in multifamily. What’s lacking are effective platforms allowing real-time reporting and visibility into a market’s leading indicators – the stats like traffic, occupancy, leasing and net effective rents are business insights with the power to drive proactive and efficient business decisions. This data is being underutilized!
Historically, the industry has operated with a black-box mentality, sequestering real-time market data away like classified trade secrets. Major multifamily providers for years believed this to be a competitive edge and sought to leverage their teams of analysts and stockpiles of internal data to drive competitive advantage. With longstanding business relationships and years of real estate experience, protecting their business practices undoubtedly felt like the best means to preserve market position.
But the benefits are shortsighted and while competitive advantage is a hallmark of any strategy, restricted access to current and transparent data does more harm than good in today’s environment.
While the lack of transparency may have created a temporary edge for veteran operators with the resources to exploit the advantage, the lack of data accessibility is an unnecessary governor on growth. The practice of collecting and withholding data ultimately established an inefficient marketplace limiting real time actionable insights.
These “black boxes” can be hard to understand and impractical for operators. Decision makers are limited by static Excel spreadsheets and other less accurate forms of data gathering, like web-scraping and quarterly survey data which were never designed for true market agility or real time strategic insights.
Data Accessibility Leads to Efficiency, Innovation
Market transparency tears down impediments in a search to exploit opportunity. With increased access the opportunity for faster and more precise insights will lead to more strategic business decisions. Transparency sharpens competition within markets pushing companies to evolve. It is time for Multifamily to raise the standard.
Multifamily operators are beginning to embrace data transparency and have turned to cloud-based platforms that enable the seamless exchange of information and data between peer properties.
The technology solution to data sharing has been a welcome departure from the labor-intensive data collection methods of the past. Instead of associates spending hours on the phone making comp calls or on their computers tracking down current and comparable market data or engaging less accurate web-scraping techniques. A cloud-based ecosystem can provide a centralized database where team members can view and analyze real-time data. The exchange of information between competing communities essentially generates crowdsourced data accelerating time to market, increasing data diversity, reduces labor costs and leveraging quality data at scale.
Not only do such platforms restore hours of bandwidth to on-site associates, but they also offer analytics to reveal macro and micro pricing trends, highlight pricing efficiency and provide real-time insights into occupancy rates and how best to eliminate concessions.
Creating Consistent, Reliable, Actionable Data
Online data-sharing platforms also address another common data collection shortcoming – accuracy. Traditional data collection methods are largely subjective and associates often aren’t trained to procure information in a way that ensures the data they receive represents an accurate comparison between properties.
When competitor data compiled in antiquated excel sheets is merged with 30 or 60-day regression data from third-party providers, they are taking a reactionary approach and basing business decisions on information that doesn’t reflect the current climate.
Exchange platforms simplify the compilation of market surveys and standardize the data entry process to ensure apples-to-apples comparisons. Direct data coming from PMS systems automates the exchange of information between comps. The result is much more accurate and timely data. Real time data at your fingertips enables professionals to make proactive decisions on pricing and other related business initiatives.
Effective revenue management, business intelligence coupled with strategic marketing initiatives requires accurate, current data. As the multifamily industry seeks to reap the benefits of data visibility and exchange, it is vital to deploy platforms with the ability to deliver precise real-time data and spotlight current market trends. Anything less leaves operators in the dark.