This article was produced by Altus Group.
While most investors are building and investing in data science and analytics capabilities, few seem to have a good understanding of what their peers are doing in this space or where their own capabilities fall on the adoption curve.
Most investors today recognize that applying advanced analytics and data science to commercial real estate (CRE) investments can help improve decision-making, boost portfolio performance, create operational efficiencies, and bolster brand equity with existing and prospective clients. These capabilities are increasingly considered core and necessary inputs for investment strategy and portfolio optimization.
Altus Group recently published a new global report on the state of data science in CRE investing, based on a global survey of more than 400 users and decision-makers of analytics and data science solutions. The report delves into the motivations, challenges, current capabilities, and future visions for data science and analytics.
One of the most notable findings emerging from the research is that investors have minimal insight into the overall state of the CRE industry as it relates to the adoption and development of data science capabilities by peers in the market. Perhaps equally surprising is how advanced the industry actually is in this regard: more than half (55 percent) of investors already employ data science tools and techniques to support their investment decisions.
While most respondents report performing relatively advanced (i.e., data science) tasks, few appear to have a good sense of what benchmarks they should be assessing themselves against. When asked how their current capabilities compare to those of peers and competitors, 73 percent of respondents describe their firms as being ahead of the curve when it comes to their data science and analytics capabilities.
The survey data, however, reveals that there is no correlation between whether respondents perceive themselves as having taken a lead over their competition and whether they are indeed performing advanced data science tasks. In fact, respondents who view themselves as innovators or pioneers in the space of data science and analytics are actually less likely than their peers to have developed advanced data science capabilities.
This report and the primary research are intended to help provide needed clarity about the state of the CRE industry as it relates to data science and to help dispel some of the myths and associated uncertainty around how the market is currently using and leveraging these capabilities.
Download the Full Report: The state of data science in CRE investing.