New series: how can real estate harness data’s full potential?

This is the first of Real Asset Media’s new series of articles, Data Uncovered, which will look at the challenges the real estate sector experiences with data collection and handling and at how these challenges can be met.

“One of the major challenges is that real estate investors are getting an enormous amount of data monthly, if not daily, and they’re getting this data from all of their partners who are using numerous different systems such as MRI, Yardi, Argus, SAP – the list is endless,” said Martin Betts, vice president commercial real estate for EMEA at Ntrust Infotech, a company which provides technology-enabled services for the corporate real estate industry.

But it is not simply the volume of data that is a challenge. “These systems will deliver the data in very different formats,” Betts said. PDFs and Excel spreadsheets are two examples.

In order for data from different sources to be at all useful there needs to be certainty that like-for-like comparisons can be made. “They have to take that data and then try to normalise these formats. Unfortunately for the investor, those formats can change on a monthly basis,” Betts pointed out.

Normalising data is the next step. “Then, once it’s been normalised data has to be validated to ensure that what has been sent is actually accurate.”

Betts explained that the next stage in the process is to place it into a structure where a company’s own systems will actually accept it. However, a frequent consequence of the complexity of these processes can be that there is a large delay before data becomes useable.

“We’ve reviewed and audited a number of our client’s systems and what we’ve noticed is that they’re using data that is three to six months old because it’s taken them that amount of time to actually deal with the data they get on a monthly basis. They’re actually using that old data as their main reporting tool,” he said.

The challenges can be different depending upon a company’s role and position in the real estate value chain.

“Property managers just don’t receive the same amount of data that the investor does. Of course, they receive data but what we see their challenge is actually querying the unstructured data within a lease.” Betts continued. “Dealing with rent and lease-end dates is easy, but getting to the bones of leases can be very difficult for them.”

Artificial intelligence has been hailed as a potential saviour and there is widespread speculation about its future application.

“AI is already here and it’s here to stay,” Betts points out. “First of all, regarding unstructured data within a lease, there’s AI available to solve that problem. Today, people can actually go and query that unstructured data and get plain English answers on key clauses within the lease.”

But Betts warned: AI is not the panacea that is sometimes portrayed. “It’s not a silver bullet. We believe that AI is there to drive efficiency, to allow better collection of data and also better interrogation of data. It’s not there to replace a human. Humans are also here to stay, AI is just our partner.”