Advisory Banner

ADVISORY

ADVISORY NEWSLETTERS

Stream Realty Explores The Power of Predictive Analytics

You know the feeling all too well: it’s late at night, you’re just finishing up a movie on Netflix, the credits begin to roll, and three additional movies appear on screen, “Based on your viewing habits, you may be interested in these other movies.” Two hours later, you stumble into bed, bleary eyed, dreaming of the large cup of coffee waiting for you at breakfast. How did Netflix know you would like that second movie?

Welcome to the world of predictive analytics. You may know it as big data, machine learning, or artificial intelligence. People tend to use these terms interchangeably when talking about the same thing, even though they are different.

In the 1940s, governments began using computational models to gain advantages during World War II. From Alan Turing to the Manhattan Project, computers were being used in brand new ways to solve previously unsolvable problems. Fast forward 70 years to Amazon suggesting similar products to what you’ve already purchased, Facebook recommending old friends from high school, doctors estimating the likelihood of developing a disease, cars driving themselves, and Brad Pitt utilizing algorithms to win baseball games with a team of washed-up players (Moneyball). Each of these examples represents a type of predictive analytics. It has infiltrated all industries and nearly every facet of life; however, commercial real estate has been slow to take advantage of predictive methods. But what exactly is predictive analytics, and how can commercial real estate use it?

In the simplest terms, predictive analytics is the use of historical data to predict future outcomes. In reality, it involves computational analysis of massive quantities of data for trends and relationships which may be difficult or impossible for the human eye to detect. Regression, time series, decision trees, clustering, neural networks, naïve Bayes, and many others are all different techniques used in predictive analytics. Each of these serves a different purpose, but all seek to accomplish the same goal within organizations: obtain actionable intelligence. Actionable intelligence is any information which increases a firm’s competitive position. This could result in new customers, increased revenue from existing customers, new market opportunities, decreased expenses, or any number of profit-increasing outcomes. Ultimately, the goal of predictive analytics in business is to make more money.

Single-family, residential real estate has already figured this out. Companies like SmartZip use predictive analytics to create brand new tools for brokers nationwide. According to its website, SmartZip analyzes 1.3 million gigabytes of data, or 80,000 16GB iPhones, to identify and predict who is most likely to sell his home. This focuses marketing materials down to smaller, smarter areas, both saving money and potentially increasing commissions. That is the power of predictive analytics.

When one moves outside of single-family residential, however, predictive analytics ceases to exist. There are many different reasons for this, but the most significant is the lack of data. Commercial real estate data hides behind paywalls and corporate firewalls. It does not exist in the public domain like most residential data. If predictive analytics requires massive amounts of historical data to successfully predict future outcomes, it makes sense that prediction is difficult in commercial real estate. There simply isn’t enough data!

There is one sector of real estate with the potential to benefit from predictive analytics, but it has not taken advantage yet: multifamily. Multifamily real estate has many of the same characteristics of single-family which make prediction possible, including millions of potential residents and millions of residences (or units). Dealing with people rather than businesses brings many advantages when building predictive models. People have interests, hobbies, life stages, and spending habits which strongly correlate with the type of residence they are interested in. All of these attributes can be used for predictive analytics.

In addition to these attributes, multifamily benefits from a large amount of units per property and the quick turnover of those units. Most businesses lease space for more than a year, and most people live in a house for longer than a year. However, most multifamily leases are for a year. This creates a large amount of data, which is being recorded in property management systems. Combining resident attributes with leasing history creates opportunities which were not previously possible. Imagine knowing the probability that a resident will move out at the end of her lease, and the reason she will move out, on the day she signs the lease. This makes revenue far more predictable and also allows management the opportunity to increase renewals by addressing the issues which lead to move outs. This is just one example of the many ways predictive analytics solves problems which were historically very difficult, or impossible, to solve.

As software continues to transform the commercial real estate industry, more advanced tools like predictive analytics will continue to grow in usage. The advancement of these tools is advantageous for the industry as a whole and will allow us to continue providing better services, spaces and experiences to our tenants.

Predictive and prescriptive analytics will be major topics at Realcomm | IBcon 2016 which will be held in Silicon Valley on June 21st-24th.

Bryant Patterson, VP, Business Intelligence, Stream Realty

This Week’s Sponsor

Now in its fourth decade, Yardi® is committed to the design, development and support of software for real estate investment management and property management. With the Yardi Commercial Suite™, Yardi Multifamily Suite™, Yardi Investment Suite™ and Yardi Orion™ Business Intelligence, the Yardi Voyager® platform is a complete real estate management solution. It includes operations, accounting and ancillary processes and services with portfolio-wide business intelligence and platform-wide mobility. Yardi is based in Santa Barbara, Calif., and serves clients worldwide from offices in North America, Asia, Australia, Europe and the Middle East. For more information, visit www.yardi.com.

Realcomm News

World-Class Realcomm | IBcon 2016 Advisory Councils to Help Navigate CRE Technology & Innovation Discussions

It is the collective insight and expertise of the following Realcomm and IBcon advisory council members that will aid in providing high quality education surrounding technology and innovation for the Commercial and Corporate Real Estate Industry.

Join us on June 22-23 (Pre-Con June 21|Tech Briefings June 24), along with our Chairmen, Advisors and thousands of commercial & corporate real estate and facility professionals from around the world, as we gather in Silicon Valley, the epicenter of innovation. We will discuss and debate how technology, automation and innovation will continue to impact how we use, transact and operate real estate.

Realcomm Chairmen & Advisory Council:
www.realcomm.com/realcomm-2016/advisors.asp

IBcon Chairmen & Advisory Council:
www.realcomm.com/ibcon-2016/advisors.asp

Our best discounted pricing expires on April 15, 2016, so don't delay and register at www.realcomm.com/realcomm-2016/registration.asp

UPCOMING REALCOMM WEBINARS

CORPORATE REAL ESTATE & Technology – The Importance of Developing a STRATEGY - 10/24/2019

The Corporate Real Estate industry has quickly gone from constantly resizing the corporate real estate portfolio based on the everchanging business needs of the corporation, to having to understand and deal with a myriad of issues relating to technology, automation and innovation. Not only do CRE professionals need to understand things such as IWMS, intelligent buildings, the smart workplace, AI, VR/AR and other emerging technologies, they also need to understand the fundamental shift on how we use space. Technology which is enabling mobility has shifted the landscape. This webinar will feature some of the most innovative professionals discussing the importance of developing a comprehensive Corporate Real Estate portfolio strategy around the concept of Digital Transformation.

headshot for Jim Young
Jim Young Realcomm
Jim Young Co-Founder & CEO Founder of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world's leading conferences on techno
headshot for Jim Young
Jim Young
Co-Founder & CEO
Realcomm
LinkedIn

Founder of Realcomm Conference Group, an education organization that produces Realcomm, IBcon and CoRE Tech, the world's leading conferences on technology, automated business solutions, intelligent buildings and energy efficiency for the commercial and corporate real estate industry. As CEO, Jim interacts with some of the largest companies globally pertaining to some of the most advanced and progressive next generation real estate projects under development.

headshot for Chuck Niswonger
Chuck Niswonger NiceNets Consulting
Chuck Niswonger President Chuck Niswonger has over 30 years of successful leadership experience in technology-related roles that range from operating his own consulting company
headshot for Chuck Niswonger
Chuck Niswonger
President
NiceNets Consulting

Chuck Niswonger has over 30 years of successful leadership experience in technology-related roles that range from operating his own consulting company (www.nicenets.com) to directing the IT strategy of a real estate investment management firm to manufacturing and technology-enabled education. Chuck has also been the chair of the Realcomm Investment Management (IM) Advisory Council for the last ten years, managing content selection for the conference educational sessions, IM forums, workshops and webinars.

headshot for Emmanuel Daniel
Emmanuel Daniel Microsoft
Emmanuel Daniel Director, Applied Innovation & Incubation, Smart Buildings & Campuses Emmanuel Daniel is responsible for building and delivering the Digital Transformation strategy for campuses across Microsoft and leads a global multid
headshot for Emmanuel Daniel
Emmanuel Daniel
Director, Applied Innovation & Incubation, Smart Buildings & Campuses
Microsoft

Emmanuel Daniel is responsible for building and delivering the Digital Transformation strategy for campuses across Microsoft and leads a global multidisciplinary team of architects and experience designers. He builds experiences that merge technology with the built environment, leading to the formation of spaces that respond to the needs of its users. He is also accountable for identifying, building and implementing the next generation of products that will make smarter and sustainable buildings.

headshot for Paul Maximuk
Paul Maximuk Ford Land
Paul Maximuk Product Owner, Smart Building Technologies & Controls Paul Maximuk is the Product Owner as well as a technical SME at Ford Land, leading all BMS and controls integrations globally. He has over 30 years of
headshot for Paul Maximuk
Paul Maximuk
Product Owner, Smart Building Technologies & Controls
Ford Land
LinkedIn

Paul Maximuk is the Product Owner as well as a technical SME at Ford Land, leading all BMS and controls integrations globally. He has over 30 years of experience in the industry managing multiple types of energy systems and specializing in strategic smart building implementation and management. Paul’s expertise in the built environment spans real estate assets from large industrial facilities to Class A office buildings.

headshot for Ronna Davis
Ronna Davis Commscope
Ronna Davis Strategy and Technology, Enterprise Building and Campus Ronna Davis has been in the networking and telecommunication industry for 23 years. She has been with CommScope for over 13 years and has held positio
headshot for Ronna Davis
Ronna Davis
Strategy and Technology, Enterprise Building and Campus
Commscope

Ronna Davis has been in the networking and telecommunication industry for 23 years. She has been with CommScope for over 13 years and has held positions in sales, channel and product line management. She is currently on CommScope’s Strategy and Technology Team for Buildings and Campuses. Previous to CommScope she worked in the design and construction of telecommunications networks for eight years and in wholesale distribution for two years. She studied marketing and is a LEED Green Associate.

headshot for Ron Victor
Ron Victor IoTium
Ron Victor Founder & CEO Ron Victor is a Silicon Valley based technology entrepreneur with 20 years of experience and expertise launching new ventures at start-ups and fortune
headshot for Ron Victor
Ron Victor
Founder & CEO
IoTium

Ron Victor is a Silicon Valley based technology entrepreneur with 20 years of experience and expertise launching new ventures at start-ups and fortune 1000 technology companies. To-date he has enabled raising more than $30Million in start-up capital for multiple start-ups in silicon-valley. Ron has founded and led three companies to-date with successful exits. His latest venture is IoTium Inc. – a Silicon Valley start-up that provides a secure, cloud-managed, easy-to-deploy software defined network infrastructure for all IoT verticals.

headshot for Marc Petock
Marc Petock Lynxspring
Marc Petock Chief Marketing & Communications Officer Marc is a pioneer in leading the Intelligent/Smart Buildings and M2M movements pushing the industry forward and has contributed to transforming and ch
headshot for Marc Petock
Marc Petock
Chief Marketing & Communications Officer
Lynxspring
LinkedIn

Marc is a pioneer in leading the Intelligent/Smart Buildings and M2M movements pushing the industry forward and has contributed to transforming and changing the Intelligent Buildings and M2M (now IoT) industries. As Chief Marketing and Communications Officer for Lynxspring Marc leads corporate and product marketing, strategy, brand management, public relations and communications that support the company’s strategic and growth initiatives.

headshot for Brent Boekestein
Brent Boekestein Vintra
Brent Boekestein Founder and CEO Brent Boekestein is the CEO of Vintra, Inc., a leading video analytics company from Silicon Valley that uses artificial intelligence to transform any
headshot for Brent Boekestein
Brent Boekestein
Founder and CEO
Vintra

Brent Boekestein is the CEO of Vintra, Inc., a leading video analytics company from Silicon Valley that uses artificial intelligence to transform any video surveillance into actionable and tailored intelligence. Forward-thinking enterprises and public safety organizations like Sacramento City, NYC DOI, Sacramento County, and more use Vintra’s solutions to organize, analyze, and derive critical insights from overwhelming amounts of stored and live video.