How to Use GIS to Create a Competitor Benchmark
In recent years, the commercial real estate (CRE) sector has witnessed a significant increase in the use of geographic information systems (GIS) technology to analyze market trends and establish competitor benchmarks.
According to industry statistics, the global GIS market was valued at $8.1 billion in 2020 and is expected to reach $14.5 billion by 2025, growing at a CAGR of 12,4%. This growth highlights the emerging importance of GIS across all sectors, including CRE.
You know it’s important, but how can you harness the power of GIS to analyze property information and set up your own competitor benchmarks? We’ve put together this guide to show you how to do just that.
Understanding GIS and its application in Commercial Real Estate
GIS has become an indispensable tool for CRE professionals, offering the capability to analyze property information from a spatial perspective. This visualization of data simplifies site selection and market analysis significantly.
By leveraging GIS, real estate professionals can pinpoint optimal locations for properties using layered data sets.
GIS enhances property portfolio management efficiency by monitoring essential details like property conditions, lease tenures, and maintenance schedules.
Additionally, GIS aids in resource allocation, improving overall business efficiency. Analyzing and interpreting factors such as flood zones, seismic activity, and environmental risks is now simpler with GIS, enabling more informed risk assessments and strategy development. One of GIS's greatest strengths lies in keeping real estate data current, mirroring the latest market dynamics.
What is a Competitor Benchmark?
Within commercial real estate, a competitor benchmark is an invaluable metric for comparing and gauging a property's performance against close rivals. It examines elements such as rental occupancies and market stance, for example.
The resultant insights from competitor benchmarking are pivotal to enhancing:
- Performance evaluations
- Investment planning
- Tenant acquisition and retention
- Marketing strategy development
- Rental pricing strategies
- Portfolio optimization
Implementing a competitor benchmark empowers property managers to make savvy decisions and underpins financial success.
How to Use GIS to Create a Competitor Benchmark
Here are some steps to guide you through creating a competitor benchmark in CRE:
- Define the core metrics and goals for comparison, like rental figures and property amenities.
- Choose the specific market region of interest.
- Integrate competitor data onto the GIS map.
- Collect data on competitors from public records or real estate databases.
- Employ GIS software such as AlphaMap to analyze the data.
- Create visual representations like thematic maps and charts to depict benchmarking data.
- Formulate a performance index to measure each property's competitiveness.
These insights from GIS-based benchmarks are instrumental for strategic decisions, from pricing to marketing.
How to Visualize and Analyze GIS Data in CRE for Competitor Benchmarking
Begin with importing spatial data layers like property boundaries or demographics into your chosen GIS software. Use color-coded maps to highlight key metrics such as property values, vacancy rates and demographic information.
Layer competitor locations on your map to see spatial relationships and market concentrations. Use charts and graphs to view comparative data so you can easily evaluate your competitors’ strengths and weaknesses.
Update and refine your GIS analysis regularly to keep up with changing market conditions and stay ahead of the competition.
Examples of Competitor Benchmarking in Commercial Real Estate
Competitor benchmarking through GIS empowers CRE stakeholders to make informed decisions with data-driven clarity.
Consider these applications:
In retail:
- Assess square footage
- Gauge foot traffic
- Compare lease rates
- Check occupancy rates
- Evaluate building amenities
- Measure tenant satisfaction
For office spaces:
- Benchmark your portfolio against competitors in prime business districts
- Optimize locations
In multifamily housing:
- Count multifamily units
- Determine unit size
- Monitor rental rates
- Assess occupancy rates
- Explore neighborhood amenities
- Identify development hotspots
GIS analysis gives a bird's-eye view of market trends and spatial data, vital for stakeholders like developers, investors, and property managers to align their strategies with market conditions.
Challenges and Limitations of Using GIS for Competitor Benchmarking
Despite its benefits, GIS benchmarking confronts challenges such as the cost of implementation, skill gaps, data integrity, geometric complexity, and system scalability. Additionally, ensuring data privacy and coping with the dynamic nature of real estate markets continue to test GIS efficacy.
The Future of GIS-based Competitor Benchmarking
The future of GIS-based competitor benchmarking in commercial real estate is promising, fueled by advancements that once seemed like science fiction. Artificial intelligence (AI) is set to revolutionize data analysis, swiftly identifying market patterns and trends, while real-time analytics will sharpen the accuracy of these insights.
Sophisticated spatial techniques such as 3D mapping and network analysis will enable a deeper understanding of the competitive landscape. Integration with the internet of things (IoT) promises comprehensive, up-to-the-minute data from connected devices. Cloud-based GIS systems will ensure that this data is accessible from anywhere, facilitating rapid analysis.
Furthermore, the combination of GIS with augmented and virtual reality will lead to more interactive and immersive data visualizations. Automation will streamline benchmarking processes, allowing stakeholders to quickly identify and act on market opportunities.
As we look ahead, GIS in commercial real estate is set to enhance collaboration, precision, and proactive decision-making. The future is one where timing is exact, decisions are data-driven, and GIS technology is a cornerstone of competitive strategy.
Final Thoughts on the Importance of Competitor Benchmarking
GIS has transformed into an essential tool for savvy professionals in the competitive CRE space. It's clear that the ability to analyze and benchmark using GIS technology is becoming increasingly important to maintain an edge in the market.
So, what's your next move with GIS? Will you harness its power to scout the best locations, optimize your investments, or better understand your competition? Consider how you can strategically implement GIS to not just follow market trends but to be at the forefront, shaping them to your advantage. Start turning insights into action by getting to grips with GIS today.