The Role Of Data Analytics in Real Estate Development


The Role of Data Analytics in Real Estate Development

Developers have relied for too long on gut feelings to make decisions on complex projects, even as the collection and storage of valuable data has become more readily available. Real estate analytics can help your team boost efficiency and lower risk at many stages of a project’s lifecycle, empowering better market trend analysis and helping forecast costs. The increasing availability of data and new technological advances have made data analytics increasingly useful in the industry. Looking toward the future, data analytics will play a critical role in ensuring developers stay competitive amid contemporary market challenges. 

Even as technology has enabled easier data collection and storage, out-of-date processes have continued to slow down and complicate developer’s ability to leverage this information. Project managers often come up with their workflows and methods for logging data in spreadsheets, which can create information silos on development teams and prevent your team from building institutional knowledge. Finding a data analytics tool that is organized, accurate, and provides advanced visibility is essential to help your team take advantage of available data to improve operations. 

Here’s a closer look at the types of real estate data development teams should consider collecting, and how data analysis can boost efficiency, lower costs, and ensure more predictable outcomes on complex projects: 

5 Valuable Types of Real Estate Data to Analyze

Data analytics can help with decision-making across a project’s lifecycle, facilitating tasks such as tracking market trends, managing budgets or vendor costs, and evaluating how stabilized properties in your portfolio are performing. By understanding the different types of real estate data, you can become more strategic in leveraging this information during the development process. 

Here are 5 valuable types of data to consider gathering to become more strategic in your approach to the development lifecycle: 

Property Market Trends: By tracking property market data such as overall market conditions, supply and demand dynamics, rental or vacancy rates, and absorption rates, developers can make informed decisions about where and when to invest in projects. For example, increasing population and demand in the Sun Belt markets of the United States mean these markets will continue to be prime spots to invest and build in the coming years. 

Demographic Trend Data: Demographic data such as population growth, income levels, age distribution, and other factors can also be useful for developers looking to identify up-and-coming markets. In addition to helping your team make more strategic market decisions, you can cater property features to meet demographic needs. For example, mixed-use multifamily housing can offer retail space catering to the market’s needs and preferences to increase property profitability. 

Development + Project Data: Data gathered from current and past development projects are among the most actionable types of data your development team can gather. Project data can help you make smarter decisions in early planning or procurement, lowering the risk of future change orders or exposures. The ability to see your project performance in real-time will help you identify budget lines that need attention and surface rich contextual insights to take informed action. 

Property Pricing + Performance Data: Developers can also benefit from tracking pricing and performance data on existing properties in their portfolios. By monitoring key performance indicators such as net operating income (NOI), capitalization rate, and cash flow, you’ll be able to understand the ongoing financial health of your properties and use this information to make informed decisions moving forward. 

Zoning and Regulatory Data: Zoning and regulatory data, such as zoning or building codes in a certain area, environmental policy and costs associated with it, or other regulatory considerations, can also help your development team make stronger decisions and avoid any obstacles that could derail your project timelines. 

Once you’ve determined which kinds of data will be valuable to you throughout the development lifecycle, finding the right analytics tool will be vital. 

Finding the Best CRE Data Analytics Tool

Developers have a lot of options when it comes to collecting and analyzing data and selecting the right tool for your team is essential. Here are a few qualities you should look for as you look to take better advantage of data in your development process: 


Accurate + Actionable: Ensuring your data is correct is essential to make better-informed decisions. Tools requiring manual entry, such as outdated spreadsheets, can be error-prone and less reliable in terms of compiling your data. In addition, spreadsheets often rely on individual workflows, which can make the data more difficult to leverage cross-functionally and prevent your development team from building long-term institutional knowledge. 

Organized: Finding a tool that ensures all data is organized and accessible is also important for your team to leverage relevant data sets. Modern real estate development software can leverage automation to automatically collect and compile data from invoices, change orders, or other relevant documentation and compile it into real-time dashboards for relevant stakeholders to access. 

Historical Data Access: Historical data empowers developers to examine trends, patterns, and cycles over time, enabling better predictions about the market’s future. Developers can use historical data to benchmark past performance, make informed forecasts, and ultimately lower risk on new projects. 

Visibility. Your data analytics tool should have the ability to provide clear and comprehensive views of data insights through dashboards and real-time updates. Development teams who have visibility on key project data facilitate better decision-making, ensuring developers have access to key data figures and preventing miscommunications across the development process. 

Make Purpose-Driven, Data-Backed Decisions With Northspyre

As the commercial real estate industry faces contemporary challenges – such as shrinking margins, market volatility, and frequent staff turnover – actionable analytics can help your firm stay efficient and successful. If your data is siloed in outdated and error-prone spreadsheets, the data will often be rigid or incomplete. Northspyre’s powerful, built-in analytics can turn the cost and vendor data across your portfolio into actionable insights, seamlessly embedding them into the flow of work to deliver data-driven guidance at critical decision points in the project lifecycle. 

Here’s a closer look at how Northspyre leverages your data to improve decision-making and make your operations more efficient: : 

Cost Analytics: Northspyre empowers you to set cost benchmarks across your portfolio to evaluate project performance in real-time and inform future budgets. For deeper analysis, you can create project groups and focus on the budget lines you care about the most. 


Vendor Analytics:
The Northspyre platform can also help you identify high-ROI vendors as well as those that are costing you. Evaluate how vendors are performing across your portfolio and make informed decisions to curb active risks and ensure reliability on future procurement. 

Global Cost Forecast: Northspyre’s Global Cost forecast lets you aggregate and compare data to accelerate performance. Use insights to pinpoint available funds and detect overruns with a unified view of anticipated costs across your portfolio. The feature also empowers you to drill into specific metrics uncover discrepancies and identify drivers behind higher or lower costs. 

Discover how Northspyre can help you leverage your real estate data to ensure more predictable outcomes on complex projects. 

👉 Learn More about the Northspyre platform here: https://www.northspyre.com/real-estate-data-platform

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