Aug 17, 2023
By Ben Gardner

Key Considerations When Adopting an Effective Data-Driven Real Estate Strategy

Evolving work patterns, rising costs, sustainability concerns, and shifting preferences of businesses and employees are all having an impact on the way buildings are operated and measured.

For real estate and workplace leaders, this means data-driven decision making is no longer an option; it’s a necessity. It enables organizations to identify areas where they can improve efficiency, mitigate risks, react to unexpected changes, and uncover hidden opportunities in the lifecycle of the buildings they own or lease.

In a recent blog post ‘You can’t manage what you don’t measure…’ by Johanna Morse, Nuvolo Product Marketing Associate, she talked about the benefits of taking a data-driven approach when it comes to real estate decisions; now we’re going to provide advice on how you can establish a solid foundation for leveraging data effectively. While the value of adopting a data-driven decision-making strategy is undeniable, it is essential to approach it thoughtfully. Drawing from our experience, here are our top five things to consider.

ONE: Clearly Define Your Objectives and Key Metrics

Key Performance Indicators (KPIs) are specific measurements used to assess performance, track progress, and guide decision making. Different businesses may have diverse data needs based on their objectives and operations.

  • If you’re a healthcare business, you have hospitals and other buildings to help you deliver patient care.
  • If you’re a retailer, you have the shopping experience to consider.
  • If you’re a consulting firm, you probably have a mixture of client-facing meeting rooms and back-office spaces, which are designed to suit your teams’ work style and the culture of your business.

Each property serves a purpose in supporting the organization’s core operations. Therefore, the data that you need to capture about those buildings varies depending on what you’re trying to achieve and the decisions that you’re trying to make when evaluating your real estate strategy.

To start, it is vital to align your real estate strategy with the organization’s objectives or the broader business mission. Identify the specific challenges or opportunities you want to address using data analysis. Then, establish KPIs that align with these objectives. Metrics could include occupancy rates, average service request response time, maintenance costs, lease renewal rates, cost per square foot, or energy efficiency. Use this knowledge to guide your data collection efforts and ensure that you focus on the most relevant metrics for effective decision making.

TWO: Review Data Availability and Quality

It is important to align your data with the specific KPIs you want to measure. However, simply collecting as much data as possible can be time consuming, costly, and even overwhelming. Therefore, data must possess two vital attributes: reliability and accuracy. Making decisions based on inaccurate or incomplete data is counterproductive and can lead to the wrong outcome.

To ensure reliability and accuracy, it is necessary to establish robust processes and procedures for data collection. Those responsible for data collection should integrate it as part of their day-to-day responsibilities. By having dedicated practices in place, organizations can ensure the consistent and accurate collection of data, minimizing the risk of making incorrect decisions.

We recommend assessing the availability and quality of data required to measure progress towards your defined objectives and metrics. Identify the sources of data, such as real estate occupancy, lease abstraction, space utilization, energy consumption, or workplace survey results. Evaluate the reliability, accuracy, and completeness of the data to ensure that it is suitable for analysis, and then address any data gaps and establish data governance processes to maintain data integrity.

THREE: Foster Cross-functional Team Collaboration

A business is collaborative, and connecting people with the data they need is critical. Different people and teams will often be responsible for different types of data; by breaking down internal silos and sharing data and expertise, you maximize insights that can impact the quality of your decisions.

For example, if an organization contemplates expanding its operations and anticipates a substantial increase in its workforce by 20% or 30%, it becomes imperative to engage the HR team to address recruitment objectives. At the same time, the space planner needs to be consulted to understand how the new employees will occupy the office space and whether expansion or refurbishment is required. Furthermore, the real estate team may need to be involved to assess the costs associated with acquiring additional space to accommodate the incoming staff.

Therefore, decision making is not just the responsibility of a single department or individual—it is a combined effort that involves multiple stakeholders from real estate, facilities, finance, HR, sustainability, and IT. To foster collaboration, it is crucial to have everyone working from the same data set. This inclusive approach ensures a comprehensive assessment of risks, opportunities, and potential outcomes, leading to more effective and successful decision-making outcomes.

FOUR: Deploy the Right Technology

The success of a data-driven decision-making process is highly dependent on technology. It provides the foundation and tools necessary to effectively collect, centralize, and interpret data. However, simply deploying any system is not the answer, you need to put the right technology in place for the right reasons.

We recommend a thorough evaluation of your current tools for data access capabilities. Identify any gaps or limitations that need to be addressed by the new technology and think about factors such as data integration, scalability, security, user interface, and analytics capabilities during the needs assessment.

Review modern software platforms that can handle large volumes of data collection, automate workflows, and deliver a user-friendly experience. Platforms such as Integrated Workplace Management Systems (IWMS) combine various modules to help organizations efficiently manage their real estate, facilities, and workplace related processes. An IWMS can play a crucial role in real estate data-driven decision making by providing a centralized and comprehensive view of relevant data, enabling informed and strategic choices. Make sure you assess the expertise and skills of your team or the need for external partners to leverage these technologies effectively.

Importantly, the solution needs to be flexible and adaptable because the decisions you’re making now may not be the same decisions that you’re making tomorrow or in six months. As your business adapts to change over time, be sure your technology can keep up.

FIVE: Ensure Continuous Review

Continuous review lies at the core of an effective real estate strategy. As you generate more and more data, you’ll need a reliable and accurate means of monitoring it so that you can compare actual performance against the KPIs and benchmarks made at the planning stages. In addition, the organizations’ near-term objectives may change, the business environment may shift, and as a result the real estate strategy may need to be adjusted. This requires not only a robust technology solution, reliable data sets, and cross-team collaboration, but also an ongoing process of re-evaluation, adaptation, and strategic planning. By regularly reassessing and refining the real estate strategy, organizations can stay relevant and responsive in today’s ever-evolving workplace, while also remaining able to adapt to unexpected changes.

We advise establishing regular review cycles to evaluate the effectiveness and impact of decisions made based on data insights. Continuously assess the performance of your metrics, refine your data collection methods, and review your analysis techniques. And importantly, embrace a culture of learning and improvement, where feedback and insights from data are used to drive ongoing optimization in your real estate and workplace decision making.

By considering our top 5 things you can successfully adopt a strategy that will enable you to make more informed decisions and enhance the overall performance and experience of your real estate.

To see how our connected workplace solution can help you centralize data, improve collaboration, and deliver more value to your organization, contact us for a demo today.