You probably don’t see it.
You’re probably not sure what it even looks like if you thought you did.
The market is changing and changing right before your eyes.
It’s what I call “Top Down.”
I’m pretty sure I did not invent this term by any stretch, but you will hear this more and more in the future.
So much so that you will come to loathe it.
“Top Down” as it will be defined in commercial real estate means that the market data starts directly at the top of the funnel.
And at the top of the funnel is the building data itself.
Such as HVAC, electrical, lighting, mechanical, etc.
Also, the data that it takes to manage value underwrite and create value with.
And who owns and controls that data? The Building Owner. Period.
No, not the broker. No, not the people who sue you because of a picture.( Yes, I know that’s what their fucking contracts say but who really gives a shit if that’s how you have to play.)
Where do you think all that data is?
It’s in platforms.
It’s in platforms that are $$$ backed by some of the biggest baddest smartest owners/managers in the entire world.
Guess what kind of data it is? You guessed it. TRUE and ACCURATE.
I should put something here about the Network Effect, but that’s for another day.
A quick side: I received a text this week asking who has the most sq ft of data on one platform.
Can you guess the answer? It’s in the BILLIONS.
Again, TRUE and ACCURATE data directly from the buildings and owners themselves.
What is this doing to the market?
You say no way?
I say oh yes it is and here is how it will work.
The building data is becoming real time and is being pushed into a platform.
That data will be able to create an index of market data by region by suburb by block by street by building.
The index itself becomes a transparent index. Just like the stock market.
I use this analogy almost every day:
You and I are sitting across from each other at a coffee shop in midtown Manhattan. We reach for our phones at the same time. We both search for the stock price of WalMart. It comes up in seconds. You and I know that value to be true. Why? We agree that the system that has been put in place to create a fair and transparent market.
Let me make that more clear.
Here is where we are going, and it’s happening now!
“We agree that the system that has been put in place to create a fair and transparent market.”
This is how it can and will work. This is from last year people. Keep up.
I can hear you now:
“Won’t happen in my market.”
“Non-disclosure in my state won’t work.”
“Building owners aren’t that stupid.”
“No one will give that data out, it would kill them.”
Did I mention BILLIONS of square feet in data on just one platform backed by whom again?
What if a building is not on a certain platform and it’s data is not true accurate or verified?
What is the real value of that building?
What is the value of that building compared to one that is?
Who wants to trade assets that have no verifiable data and therefore no way of defining a true value?
Would you make that WalMart trade without all the data and analytics behind it?
Of course, you would.
Then why is it OK to trade assets without any REALTIME TRUE and ACCURATE DATA NOW?
It’s a trillion dollar global asset class and…….
The Commercial Real Estate Market Changes Right Before Your Eyes.
+1 There is more that one platform by the way. Competition is a good thing.