Where we stand today.
Commercial real estate data has long been left abandoned in dark recesses and behind firewalls, either forgotten or hidden. Mostly for a perceived competitive advantage. Today that may no longer be a choice. The tension between commercial real estate data that is aggregated, mined or sold and data that is found or acquired is, for now, an explosive dynamic. The question for commercial real estate now is not “why would I make my data available?” But rather, “how do I make my data available and, what do I need to know to do it right?”
What can or may happen to commercial real estate data?
Commercial real estate data is and will be increasingly available. Growing numbers of us know how to and will continue to learn and play with data and bend it to our will. Commercial real estate data can create new insights and open new opportunities, but it can also be twisted to serve an agenda or simply tell us what we want to hear. In the midst of all the data-driven innovation we are seeing, we will begin separating the non-trivial from the trivial. It’s one thing to acquire terabytes of data, and it’s quite another to cleanse and mobilize that data in service of real-time insights into the commercial real estate market. Let’s not forget that the government may step in and start regulating the acquisition, use, and distribution of our precious data. Because of this we may also see more data on lockdown, secreted away in an attempt to keep the “perceived” old school competitive advantage.
The Big Questions:
1. Will data availability and portability, done well, help create a defined commercial real estate brand?
Answer: Absolutely yes, and whoever creates the “data standard” for commercial real estate will be THE Brand. Think Google. Think Oracle. Think E-Trade. Think NYSE.
2. What new audiences will the data attract?
Answer: Just for a start think of all the obvious related business around the data. Engineers, architects, construction. Some not so much, actual tenants or end users. The old age thinking that these people do not need, want, or should have access is RIDICULOUS.
3. Will we need commercial real estate data, advisors?
Answer: Certainly. This task may become the pivotal position in the future commercial real estate organization.
4. Will we manage our data daily, weekly or monthly?
Answer: Is the question not redundant already? How about real-time data management. Just look at the stock market. Commercial real estate data is no different. If you are in a position to manage the data in real time and don’t……RESIGN!
5. What do “innovative” data mining and monetization methods now in use by Google and others, mean to commercial real estate?
Answer: BIG trouble. All are third-party vendors with a focus driven goal to figure out a smarter, faster, cheaper and more efficient way to monetize commercial real estate data. They will create the data market for commercial real estate….without us!
6. Will this affect commercial real estate locally, at a regional level or on a global scale?
Answer: Stick your head in the sand if you want. It’s called “The Cloud.”
7. What happens to commercial real estate data when it’s collected and syndicated into “the cloud”?
Answer: It is already in” the cloud”. It is already being pushed to any and all who see a real value in the data. We must as an industry create the commercial real estate cloud. The cloud is already getting filled up from other sources. Think public property and tax records. Think architectural and engineering data.
7. What happens if there is a monetization of the data without the knowledge and permission of the rightful owner?
Answer: Great question. Who really owns the data? We sure as hell better take ownership. Is it through proprietary agreements? Paid access? Membership? Commercial real estate must establish clear and informed consent on who exactly owns the data, who should control it and how it should be monetized.
8. Can commercial real estate be stupid enough to go back to square one?
Answer: Please no! Simple. Do NOT give the data away for free and then be stupid enough to get the aggregated data sold back.
– Please reread the last question and answer. Let’s not set the industry back ten years out of pure ignorance.
9. How do we, as an industry, determine the real value of data beyond the context of that data is just property data?
Answer: The data will be and has incredible value to so many beyond just the transaction. Not to get off track here but sustainability, HVAC, economic development, tax, mapping, BIM, Leed, lifestyle, demographic, etc., etc.
10. Do we need only need “comps” to build upon or to derive a valuation model?
Answer: Yes and no. Yes, because comps do create a historical value, but only as it is relative to the market. What is the value of a comp that is five years old means in today’s market? Yes, I am chuckling. No, because the data is more relevant and valuable if it is true and accurate and timely, again think NYSE.
11. What exactly is the Commercial MLS’s/ CIE’s role?
Answer: Can they be the true stewards or data managers for their “customers.” They can, will and should be the only connection from the property record and the subsequent transactions also including all electronic interactions between any and all the parties connected to it?
12. Does this create a new kind of data marketplace?
Answer: For the sake of us all. YES. Do we want not only other industries but the consumer or clients themselves dictating the value of commercial real estate data? Maybe we do! What if the client or user of the data, sets their own price for access? Do we gain a data history, preference and use for each?
13. Do we understand how business intelligence and analytics are being applied to the data generated by commercial real estate transactions?
Answer: Yes we do and it also needs to be more refined for commercial real estate but, We need a DATA STANDARD…NOW!
14. How should the commercial real estate industry confront this data challenge?
Answer: Start now to at least address the data questions we as an industry will inevitably have to face.
15. How should we do it?
Answer: Not the way it is NOW. While we sit in committee rooms and create general “best practices” lists the third-party vendors are already executing a planned business model with…wait for it….revenue for profit.
Execution, Decisions, or Nothing?
Given the digital landscape of today where value can be derived in so many unique ways, and the fact that others whose motives for increasing the value of commercial real estate data is at best suspect and a complete unknown. Who takes the intellectual lead? What critical decisions should be made? Who will be the digital commercial real estate brand? Or should we just step aside and watch?
Now guess what?
I wrote and posted this original article Feb 6th, 2011.
And guess what? I did it again. Posted on Feb 24th, 2016
To keep the theme going. February 5, 2017
And here we are today February 2018.
So, I guess (it’s a theme I said) at this point I should just stop. What’s the point? What has changed since 2011?
NOTHING! Nothing but bitching, whining and complaining but nothing. I wrote about the bitching and whining too.
Do I have some answers? I just gave you 15 but that was seven years ago.
Let me throw this at you, these companies did not exist in 2011, Compass, Opendoor, Instagram all worth billions and how about that little thing called cryptocurrency. Tell me you have bought some Bitcoin, or don’t in case you’re too embarrassed to tell me publicly. (That last sentence guarantees some snake oil sales pitch for Bitcoin futures in the comments section.) Tack on a year or two and we get Airbnb, Lyft, Uber and even Android phones. It seems as if they have been around forever. Piling on here but WeWork started in SoHo in 2010. Valuation today? $20Billion give or take a few million. And we/you have been doing what during that time? Just the same as…
You may ask “well Duke what have you been doing this whole time?” Answer: Collecting hard assets. Wait, raising money and collecting hard assets, that’s a more accurate statement. You too? Hey, welcome to my world.
After years and years is there an answer to this issue of “your” data? Maybe, but I think the context of that answer is about to change and at the very least that change may have started. Let me give you an example and I feel responsible for this one. I will keep this as generic as possible.
I received an email from a dear friend. This friend has serious #CRE cred from way back. The details are not important but they were referencing an email exchange with a broker about a lead which stated, ” I’ll pay you 0.5% success fee (calculated based on the total commission I earn on a transaction) for any leads you bring me that close on a property) – You would need to post leads that you generated to a public blockchain so I can verify the leads…”
Now again this statement needs context but that is not the point. The point is the statement itself.
Take the fact that this is an exchange about a commercial real estate lead and go further. It could be any lead for any product for that matter.
The question is why should that type of data be in a secure public ledger? The answer is that It verifies specific data that is accurate and agreed upon without any possible dispute.
Why only use that secure public ledger for a lead gen referral? There can and will be so much more. (As a side I told my friend to go do the deal himself, and he laughed hard at the “accuracy” of the statement.)
More to the point it’s the mindset. Get me paid! Yea, get me paid and verify that data and make it secure so that “I get paid.”
So, what, this is finally a practical use for secure data? Has it not always been that way? The blockchain just a different way of doing that is it not?
I’ve got an idea, I will put 100 verified and qualified leads in a secure ledger and only let one person access them for…..you guessed, it a HUMONGOUS fee!
Reread that last statement. That has to be a business product coming from the DarkStar soon.
How hard is this to figure out?
- Take brokers data and put it on a secure platform.
- “Enhance” that data.
- Generate interest or views (potential leads) for that data.
- Give access to only one client, to validate the data to the marketplace (to the secured platform) and charge like never before.
- Add Blockchain to the marketing materials and gain 3 times the market valuation. (it happens, just ask Kodak, remember them?)
- Once that enhanced and verified data is in the secure database, only allow access to a specific tier of clients, in essence monopolizing that data for the platform and those specific clients and the entire marketplace.
- Bring that same plan to the local level. Make sure it is only available to clients who sign agreements to give the initial data away (FOR FREE) for the “opportunity” to be a part of the “special tier” of clients. Choose the clients that can and will pay the most.
- Then of course, there is that token thing along with a node that……but hey, I’m just showing off…….
This model accomplishes what?
1. Secure data.
2. Accurate data.
3. Market monopoly.
4. Guaranteed revenue.
5. Guaranteed FREE data stream.
6. Higher market valuation.
7. Higher stock price for shareholders.
8. More $$$ in which to defend all of the above.
You have to admit, it’s going to be hard to fuck this up. I mean, how do you fuck this up?
What’s the DarkStars stock price today?
Should I buy some?
Does the DarkStar know what the term “airdrop” means?
What will I write in February of next year?
The 15 BIG Questions You Must Answer About Commercial Real Estate And Your Data!
+1 Playing it forward and living the dream!
+1+1 Is there a way to counter this and make sure it never happens? Yes, and that is even easier to figure out.