Geographic Information Systems (GIS) are mapping tools that help users make sense of complex geographic and spatial data. In commercial real estate you might hear about a ‘GIS analytics tool’ or a ‘location insights platform‘.
These platforms harness the power of GIS mapping systems to provide essential CRE insights. You might still be wondering, what is a GIS mapping system? We’ll explore that, and more, in this detailed guide.
What is a GIS Mapping System in the Context of CRE?
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A GIS mapping system in commercial real estate is composed of several integral components:
People
People are a key part of any GIS system.
People are both the users of the system, and a core part of the data that a GIS system contains.
Demographic information, for example, is statistical information about people in relation to place. Psychographics is an additional layer of information that makes meaning out of demographic data. In CRE, experts analyze this ‘people’ data to develop targeted strategies and make informed decisions.
Users of a GIS tool in CRE might include:
- Analysts who use GIS tools to process and interpret data for strategic decision-making.
- Brokers who use GIS technology to pinpoint ideal locations for customers. They can also examine market demographics, infrastructure, and accessibility.
- Investors who use GIS to assess prospective investment possibilities and reduce risks.
- CRE professionals who use GIS tools to research and understand the commercial real estate market.
Spatial Data
A GIS system contains a lot of information about people, but also data linked to space. This data can be categorized into two main types:
Vector Data
Vector data represents geographic features using points, lines, and polygons.
To put it simply: points signify properties, lines illustrate roads or transport networks, and polygons indicate boundaries.
Raster Data
Raster data consists of images or grids, such as aerial and satellite photographs.
This data type is useful for visualization of property and environmental constraints, among other uses.
Analysis
Analysis of the spatial and demographic data contained in a GIS mapping system, is what brings it to life and makes it useful.
Accurate and meaningful analysis helps property professionals to make informed investment decisions.
A few types of analysis you can perform with a quality GIS tool include:
Market Research/Analysis
It’s essential that you undertake detailed research and when the time comes, are able to perform a proper due diligence on a potential property before purchasing.
GIS can help with market research and give you valuable data regarding market performance and trends in specific areas.
Buffer Analysis
To determine accessibility and market potential, you can use GIS to do a buffer analysis.
In the context of commercial real estate, buffer analysis might be used to identify properties within a certain distance of amenities like parks, schools, or public transit, or to measure the impact of new development on surrounding properties.
Void/Gap Analysis
Void analysis identifies gaps in the market for a specific type of business.
It’s a particularly useful tool for retailers who are looking for the ideal location for their new business venture.
It’s also useful for finding appropriate tenants which would suit a specific location well.
Trade Area Analysis
Trade area analysis is a technique used by retailers to identify the geographic area from which they draw their customers.
Foot Traffic Analysis
Foot traffic analysis helps understand the movement and behavior of pedestrians around specific locations, which can be crucial for retail businesses.
Hardware
Given the complex and voluminous data processed by GIS mapping systems, powerful computers with sufficient processing power, memory, and storage capacity are required for optimal performance. High-resolution displays further aid in visualizing detailed maps and spatial data.
While hardware limitations can hinder the efficiency of GIS mapping systems, many of today's GIS analytics platforms, like AlphaMap, are cloud-based, reducing the need for high-end hardware.
Many platforms also offer mobile applications for on-the-go access to GIS analytics.
Software
What is a GIS mapping system without the right software? CRE-specific software is essential to make full use of these systems.
Your software must be capable of handling both vector and raster data. It should also integrate with databases, statistical packages, and property management tools. All this is necessary for seamless data exchange and analysis.
Compatibility with other systems is important. This means the software must be able to import and export data in various formats.
Also look out for easy-to-use interfaces and intuitive workflows.
What is a GIS Mapping System used for in CRE?
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Site Selection and Analysis
GIS mapping systems are invaluable for site selection and analysis in CRE. You can overlay data on maps to identify prime locations for different purposes.
You can also analyze market demographics and evaluate factors like population density, income levels, and consumer behavior.
Assessing accessibility and infrastructure is simplified with GIS as it enables visualizing proximity to transportation networks and amenities.
Property and Tenant Management
Property management can be less time-consuming with the help of a GIS system. Property managers can track critical aspects such as maintenance requests and energy consumption.
Tenant management also benefits from GIS technology. GIS facilitates space use analysis, lease management and environmental risk assessments. Using GIS can also help to identify potential vacancies or expansion opportunities.
Additionally, GIS mapping systems can help to identify properties with potential compliance issues.
Market Analysis and Forecasting
GIS mapping systems offer powerful tools for market analysis and forecasting.
CRE brokers can study historical sales data, market trends, and demographic patterns with ease. GIS makes it simple to spot emerging opportunities and predict future growth areas.
The integration of predictive analytics and modeling techniques also aids in accurately forecasting market demand and rental rates, ensuring data-driven investment decisions.
Visualization and Presentation
Effective communication of CRE data and insights is crucial.
Whether you're presenting a site selection analysis to clients or explaining market trends to stakeholders, GIS mapping systems offer powerful visualization tools to enhance understanding and decision-making.
These tools include customized maps and 3D visualizations that present information in an accessible and engaging manner.
Advantages of GIS in CRE
GIS mapping systems bring many advantages to the table in the context of CRE:
- Informed decision-making based on accurate data
- Cost and time savings through efficient analysis
- Gaining a competitive advantage in the market
- Enhanced collaboration and communication among stakeholders
- Mobile access for on-the-go updates and decisions
Final Thoughts on GIS Mapping Systems in CRE
GIS mapping systems provide vital location insights for CRE professionals that aid with strategic decision-making.
By handling complex spatial and demographic data, they facilitate tasks ranging from site selection, property and tenant management, to market analysis, and data presentation.
As a competitive edge, they lead to cost and time savings, promote collaboration, and provide real-time mobile access.
As commercial real estate continues to embrace digital transformation, the use of advanced GIS analytics tools, such as AlphaMap, is becoming increasingly vital for unlocking key insights, maximizing potential, and ensuring ongoing success in the industry.
