Technology in commercial real estate is evolving at an eye-wateringly rapid pace. Keeping up is the challenge!
In fact, a huge 60% of real estate professionals admit to still being reliant on old-school technology and infrastructure, including facing challenges when it comes to adopting new technologies (According to Deloitte’s 2024 CRE outlook survey). But that doesn’t have to be you!
In this guide, we delve into seven of the key ways geographic information systems (GIS) technology and GIS analytics platforms are changing the landscape for CRE professionals. We hope that by the end, you’ll be tempted to get started. Let’s dive in.
What is GIS Analysis?
GIS analysis uses sophisticated technology to analyze and visualize spatial data. CRE-specific GIS analysis tools, such as AlphaMap, act like a specialized version of Google Maps for CRE professionals – flexing to their specific needs and requirements.
Most GIS analysis tools are online or cloud-based which means they are easily accessible on-the-go. Some tools are more complex than others and may present steeper learning curves.
CRE professionals can use GIS to optimize everything from site selection to marketing strategies, thanks to its ability to integrate many different data sources like demographics and economic indicators. One of the major advantages of GIS analytics is the ability to make decisions based on real-time data rather than mere intuition (always risky in CRE).
Some things to look out for in a robust GIS analytics tool include:
- Up-to-date and accurate data
- A user-friendly interface
- Easy integrations
- Good customer support
7 Ways GIS Analysis is Transforming the CRE Landscape
1. Transforming Property and Land Searches
GIS is making property and land searches quicker and easier than ever before. Gone are the days of sifting through endless listings and paper maps. GIS enables a streamlined search and discovery process with unparalleled accuracy. Brokers can conduct detailed analyses of their clients’ property locations, gaining access to data such as:
- Property boundaries
- Zoning regulations
- Demographics
- Market trends
For instance, a CRE brokerage can use GIS to identify a prime commercial property for a client by analyzing the attributes of the location and the target market in the area. They save valuable time and resources and ensure an ideal match between the client's needs and the property's attributes.
2. Providing Data-Driven Market Research and Consumer Insights
GIS tools give you access to in-depth market and consumer insights that you wouldn’t easily find anywhere else. This is particularly valuable in the retail sector as understanding the market in the location of your property and the behavior of your customers is key to success.
GIS also makes it easier to analyze competing brands by providing access to foot traffic data and trends in various locations. You can also identify potential gaps in the market.
A practical example could be a retail chain that uses GIS to analyze the market in a new area, thereby strategically picking a new store location on a high street. GIS shows which location will yield the most foot traffic for the retail chain’s brand. The advantage is that these kinds of decisions no longer have to rely on guesswork.
3. Elevating Investment Decision-Making
Investors can, and do, benefit immensely from GIS. You can use GIS to compare potential investments based on real-time market information and location insights.
Picture this: You are the owner of a retail chain. You need help assessing the viability of growing your business in new locations. You look to a GIS platform, like AlphaMap, to analyze various aspects of the markets in several different locations. You look at information like:
- Demographic data
- Trade areas
- Traffic patterns
- Competitor locations
- Economic indicators
The GIS platform also projects future economic trends, which helps you envision the potential of the various locations. You are easily able to find a good-fit neighborhood with a population that fits your target market, and a location with high foot traffic.
Not only that, but you find several more ideal locations for future stores, which helps you with strategic planning. Now you can invest in growing your business confidently and open your new stores with peace of mind.
4. Enhancing the Site Selection Process
GIS makes site selection simple by combining various layers of data, including:
- Population density
- Foot traffic statistics and trends
- Competitor types and locations
- Average income levels
- Local traffic patterns
- Public transportation hubs
Being able to process and analyze these data sets simultaneously, creates an opportunity for in-depth study and optimization which simply isn’t possible with old-school, manual methods. Using advanced analytics and predictive modeling, GIS tools can simulate future scenarios, helping investors and developers assess the long-term viability of a site.
According to one site selection study, both Starbucks and Dunkin Donuts increased their stores’ performance and profitability by using GIS analysis to help them pick optimal locations for new stores.
5. Advancing Property Development Planning
GIS proves fundamental in the planning and development stages of large CRE projects. Developers can assess the physical attributes of the land in different locations by using GIS to study environmental and topographical data.
You can look at the soil, water, and even protected areas on a map to determine if a location is suitable for development purposes.
On a chosen site, GIS allows you to take a closer look at the land's shape and features. This helps with deciding where to put buildings, how to deal with slopes, and even designing the rainwater runoff.
You can scope out the market conditions for new developments using demographic data and consumer insights from a GIS platform. Running a void analysis in an area, for example, could help a retail developer decide where to locate a new mall by figuring out where the gaps in the market are.
6. Improving Client Communication and Service
GIS technology has revolutionized client communication and customer service in CRE. Most GIS mapping tools allow the user to create visuals with the many maps, data sets, and trend graphs available.
CRE brokers can use these visuals to create detailed presentations for clients. These help to communicate property location and market insights clearly to clients, making complex concepts easier to understand.
Enhanced communication not only serves your existing clients but can also help you win over some new ones! Clients will be able to clearly visualize the potential of properties, leading to more strategic decision making.
7. Mobilizing Real Estate Data for On-the-Go Access
Some GIS platforms have accompanying mobile apps which allow CRE professions to access property location insights on-the-go. Imagine having all the vital information about properties and markets right at your fingertips, wherever you are!
With features like updates and alerts, brokers and agents can receive notifications about new listings and study market trends in specific locations, while in the middle of a client meeting. A mobile GIS solution gives any CRE team a competitive edge in the fast-paced CRE market.
Overcoming GIS Analysis Challenges in Real Estate
Navigating the world of GIS analysis in CRE can feel daunting for the less tech-savvy among us. From technical jargon to integration issues, the challenges are plentiful.
The intricate nature of GIS software and the multitude of data sources can feel intimidating, sometimes requiring a steep learning curve to get the hang of it. And then there are the logistical headaches of blending GIS into existing workflows without hiccups.
But fear not! There are practical solutions. Investing in decent quality training programs can arm staff with the skills they need to conquer GIS challenges.
The aim should be to foster a culture of learning. User-friendly GIS platforms, like AlphaMap, and support from seasoned pros, can smooth out the integration process and mitigate the technical hurdles.
Mastering GIS analysis might require patience and perseverance. But the long-term benefits for real estate firms are undeniable. It is a surefire way to supercharge decision-making skills and sharpen your competitive edge.
Final Thoughts on the Impact of GIS Analysis
Technology is the future of CRE and GIS will play a big part in shaping business as we know it. As a CRE professional, GIS analysis tools offer a simple, user-friendly approach to manage large amounts of data without the complexity of starting from scratch.
From lightning-fast (and detailed) property searches to making better investment decisions and being able to communicate more clearly with clients, GIS places CRE professionals at a new advantage in many ways.
With the right focus on integration, a GIS-based CRE-specific location insights tool can drive results and open doors. So, the question remains, will you dip your toes into the water? If you’re brave enough to give it a try, book a demo with the AlphaMap team and we’ll give you a glimpse of a powerful tool that’s about to change everything.
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