Conversations, conversations, conversations, thank whatever deity you want for the basic sit down face to face conversation.
There are some of us and I may be one who thinks that it has become somewhat of a lost art. The art of sitting in front of someone smart and experienced and asking questions. On top of that asking the right questions and listening.
It’s also been my observation that some of the times those conversations are a “who is smarter” conversation. It’s can that person “win” the conversation by showing the other person that they are indeed smarter.
I’ve had more than my fill of those in the past so it was refreshing that just recently I had one of the other.
Of course, it was about data generally and of course commercial real estate overall.
Now, if the person or persons that I had the conversation with want to chime in on Twitter, LinkedIn or the comments, by all means, please do.
After the pleasantries of introductions and backgrounds, we started to talk about data and all the parts and pieces of it. There were so many concise and poignant points made but one topic, in general, stuck out to me and it was what I will call the Three Degrees of Separation.
To define what that is let me give you a scenario.
You are a broker and work at one of the major global firms. By default, that firm has its own proprietary data and its data that you source. For clarity let’s use Atlanta as the market we are talking about. Along with the original owner’s data, there may be your own personal data that you have acquired over the years. To drill even further let’s say we are looking at listing data. The basic stuff is out there for most people but your firm as all the historical and updated data on a specific property along with your personal pieces. And by that, I mean your local knowledge, for instance, you have been involved with the owner or management team in many local charitable activities and know certain points of the why and timing of this listing. As just one example.
That is what I call The First Degree of data. In other words, it is the closest data to the deal. Is it the best data? I think so.
Here is another scenario.
The listing data that you create for that listing in Atlanta needs to be a bit more robust to help define a clearer narrative about the property. Where do you go to source that data? It may be a local #CRE and or state board that aggregates that data from the entire market. And that data will be more than enough to round out the listing narrative for the entire market to see and then agree.
I call that The Second Degree of data. Is it the best source of data? It not the original source but along with the First Degree of data may be more than enough.
Further on to another scenario.
With all the other sources of data you need to define the listing narrative even more and where do you source that data? You look for outside vendors or other sources, sources that are not as close to the listing as the first two. maybe they are adding additional layers of data to the listing beyond the local market data. What could those sources or vendors be? The possibilities are endless. It could be whatever YOU think has a value.
I call this The Third Degree of data. It is clearly the data the farthest away from the original listing data. It is not the most valuable by any means but again if you place a value on it, therefore, it has a value.
So, it seems very clear. The original source of data, the owner, along with your firms’ data and your personal local market knowledge is indeed the best source of data. The entire market itself that is, along with yourself, creating the market velocity is the second best source. And by all indications, any third party vendor you decide that has in your opinion valuable data is the last source.
That is my definition of the Three Degrees Of Separation.
So, I have to ask Or More To The Point, What Are You Really Paying For?
+1 I hear they still fly planes, small little bitty planes, with matching logo shirts. But that’s just one example!