Smart CRE Decision-Making Requires Access To Connected Data
Not long ago, the commercial real estate industry was bracing for a coming wave of distressed hotel properties in the wake of the coronavirus pandemic.
“The whole world thought we were going to have a giant tsunami of distress a few months ago, and all this distressed product would flood the market and everybody would have to scramble to figure out what to do about it,” said Tina Lichens, chief operating officer for LightBox, a leading real estate information and technology platform.
That did not come to pass. In a report, LightBox noted that hospitality properties that were troubled pre-pandemic might still experience distress in the next few years, but no giant waves were visible on the 2021 horizon.
“The findings were surprising to many,” Lichens said. “Part of that uncertainty is a result of the nature of our industry, which can change very quickly. That is exactly why today’s markets require new strategies that leverage data for informed business decisions. You simply can’t evaluate prospective deals or uncover macro trends without it.”
CRE professionals depend on reliable data not only to plan and operate during uncertain times, but also when performing due diligence for potential acquisitions or to expedite lending and valuation processes. Unfortunately, that information is often not easily accessible in one convenient place, making it difficult to research the history of a property, let alone try to predict its future performance.
Buyers, sellers, brokers, lenders, environmental professionals, appraisers and others all have their own independent sources for the information they share in transactions, Lichens said. As a result, what should be a smooth communication process instead resembles a game of telephone in which information is lost or misinterpreted as it passes from party to party.
“The problem is that there is no single source of truth in this industry, even as we see increased activity across our segments, including lending, financing and investment sales transactions,” Lichens said. "The type of information that our clients are looking for ranges from sophisticated, hard-to-get information around market trends and lender activity, to basic stuff like, 'how big is my building' or 'are there contamination issues I need to be aware of?'”
LightBox, whose mission is to build the world’s most connected real estate information and technology platform, is primed to become the single source of truth for the entire industry, she said. Its platform, which currently serves more than 50,000 CRE brokers, has brought over a billion assets to market, and extends its database of more than 60,000 qualified and active buyers to end users.
“It is inefficient if each step in the buying or selling process has to happen all over again every single time vital information is shared with a new stakeholder,” Lichens said. “What we do is connect those insights at the property level — like the square footage of a building, its assessed value, and whether there was a gas station on the property at one time — and apply those insights at the point of action for greater value.”
Lichens cites the company’s LandVision mapping tool as one example of the level of detail that LightBox can provide users. Interested parties can search any parcel in the United States and access more than 350 data points, including unique property characteristics — lot size, land use, ownership information — and data on the surrounding area to accurately identify promising locations. She said this easy access to spatial data is unprecedented in the commercial real estate world.
LightBox reported it has seen increased activity across all CRE sectors since June. That suggests people are feeling more optimistic, although they still need to know exactly what they are purchasing to see the biggest returns.
“There are still big question marks because of market conditions," Lichens said. “As a result, people are trying to go deeper into the information about a property, but analytics must be applied to be useful. Our platform is designed to help people solve complex problems that have historically seemed intractable.”
LightBox clients include some of the CRE industry’s biggest players. But Lichens said its platform is valuable for small and midsized companies, too. By combining best-in-class companies with brand recognition in the marketplace, and leveraging their broad expertise, LightBox is able to know these market participants deeply, understand their specific pain points and successfully address them.
“Our technology levels the playing field," she said. "We provide the infrastructure and insights that more moderately sized companies can use to compete. The data already existed, but now LightBox is able to put it together so that people can use it to enhance deal execution.”
This article was produced in collaboration between Studio B and LightBox. Bisnow news staff was not involved in the production of this content.
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