Incomplete CRE Data and Reports Can Limit Effective Investor Communications

In commercial real estate (CRE), accurate and timely data is crucial for making informed decisions. And with today’s market uncertainty, investors are becoming more involved and want access to consistent, updated reports. Now, it is critical to be aware of common CRE data and reporting challenges and identify if they are present in your firm. If they are, you must identify opportunities to overcome these challenges and ensure they don’t hinder you or your investors from accessing the right information at the right time.

Read ahead as we identify some of the common data and reporting challenges and provide tips for how to effectively overcome them.

Common CRE Data and Reporting Challenges

Data Challenge #1: Disparate and Unstructured Data

Disparate data refers to a collection of data that is distinctly different. When this is the case, it becomes difficult to extract meaning or value from the data. Unstructured data refers to data that is usually not easily searchable (typically anything that is not 100% text and often lives in an application rather than a database or data warehouse).

Today, most data is unorganized and uncategorized, creating a pool of disparate and unstructured data. In fact, unstructured data comprises 80% of enterprise data. The problem with using disparate and unstructured data is that, without integrations to add context, the value that can be extracted from the data is limited. 

Disparate, unstructured data impacts how commercial real estate firms derive actionable, meaningful portfolio insights. For example, nonaggregated property data can create inaccuracies in your reporting, which can in turn impact critical metrics like your operating expense ratio or NOI and lead to inefficiencies in the firm.

Data Challenge #2: Data Silos

Today, roughly 75% of the commercial real estate industry struggles with data silos. Data silos are a group of raw data that is accessible by one department or group but isolated from the rest of the organization. 

Whatever the cause, data silos can impact your organization’s productivity, data integrity, and revenue, as well as limit transparency. Over time, data silos can create misalignment across the firm as team members use differing datasets and information. For example, if an asset manager and property manager have different information, occupancy rate discrepancies could occur, which could impact income for the following months. Additionally, data silos create inconsistencies in information, which could tarnish the firm’s credibility amongst investors and other stakeholders.

Data Challenge #3: Data Inaccuracies and Errors

For decades, the commercial real estate industry has relied on spreadsheets for data entry, financial reporting, and other critical business functions. However, today it is known that 9 out of 10 spreadsheets contain at least one mistake, such as mistyped numbers, incorrect formulas, rounding errors, and incorrect cell references. One wrong data entry or deleted number can expose your firm to risks such as missed portfolio opportunities, noncompliance, and revenue loss (amongst many other issues). 

Data Challenge #4: Data Variability

Today, the asset manager (or analyst) is accountable for taming the variability of data about or around the asset as it flows into the management or ownership organization. This manual

workflow requires continual efforts to ensure that the data is standardized to the way the organization (or other stakeholders) want to understand it. 

Data Challenge #5: Data Analysis

Today, the asset manager (or analyst) is often responsible for creating all reporting about the performance of the asset, enabling the flow of information up, down, and across the organization. Often, these reports rely on disjointed data timing, source, and availability, affecting consistency and trust in the analysis. Given the burdens in aggregating and standardizing the data, asset managers struggle with speed and effort as they spend more time trying to collect the data than in the actual analysis of the information to get to an informed decision or action. This results in increased risk for non-optimal outcomes.

6 Steps to Overcome Data and Reporting Challenges in CRE

Step 1: Identify and Understand the Challenges

The first step in overcoming data and reporting challenges is to identify and understand the specific issues you are facing. These may include data inconsistency, lack of standardization, data silos, outdated reporting tools, limited data access, or poor data quality. By pinpointing the challenges, you can devise effective strategies to address them.

Step 2: Establish Robust Data Governance Policies

Effective data governance is the foundation for effectively managing CRE data. Create clear policies and procedures that govern data availability, usability, integrity, and security. Establish data standards and implement data validation processes to ensure consistency and accuracy across all systems and platforms.

Step 3: Leverage Technology for Data Management

Investing in the right technology can significantly streamline data management and reporting processes. Consider adopting a powerful customer relationship management (CRM) system, property management software, or data analytics tools tailored specifically for the real estate industry. These tools can facilitate efficient data collection, organization, and reporting, enabling you to make data-driven decisions. 

Note: Lobby CRE can centralize your operational and financial data for complete portfolio visibility. Learn how!

Step 4: Integrate Systems and Data Sources

Data silos can impede the flow of information and hinder effective reporting. Integrate disparate systems and data sources within your organization to eliminate redundancies and enhance data sharing. Explore system integration options or invest in a centralized data management platform that can aggregate data from various sources, ensuring a holistic view of your CRE portfolio.

Step 5: Enhance Data Quality

High-quality data is essential for reliable reporting and analysis. Implement data quality controls to ensure accuracy and completeness. Regularly clean and validate your data, address any data entry errors, and establish data quality metrics to monitor and measure accuracy over time. By maintaining data integrity, you can improve the reliability of your reports and make more informed decisions.

Step 6: Provide Training and Support

Data and reporting challenges often stem from a lack of knowledge or skills among employees. Offer training programs to enhance data literacy and reporting capabilities within your organization. Invest in ongoing support and provide resources such as data visualization tools or reporting templates to assist employees in creating accurate and insightful reports.

Step 7: Use a Service-Provider to Help with Your Reporting

At Thirty Capital Performance Group, our experienced team of Analysts, Asset Managers, and Real Estate Professionals review your asset management reports for unbiased third-party insights about your property’s performance and your overall portfolio management.

How Thirty Capital Performance Group Can Help

Thirty Capital Performance Group is a real estate advisory company providing expertise at the intersection of capital markets, technology, data analytics, and data science to deliver results to clients. The multidisciplinary team solves the challenges faced by owners, operators, property managers, asset managers, and institutional investors in validating cashflow and economic assumptions, providing independent, unbiased insights and recommendations.

Reports we offer include:

  • Asset management reporting
  • Market analysis
  • Property and portfolio optimization reporting
  • Valuation/cap rate reports

Contact us today to speak with an expert!

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