What’s all the buzz about traffic data in the commercial real estate industry today?
The U.S. real estate industry continues to rebound, with ongoing price gains bucking predictions. Global investors are anticipated to significantly up their stake in U.S. commercial property, and are increasingly investing outwards and expanding into other than staple gateway cities.
However, savvy investors and landlords continue to be selective in their investments and improvements, and have a keen focus on finding ways to add value.
A side effect of this cautious yet growing appetite has been fueling big data as a hot buzz topic. Most recently this focuses on traffic data.
So why is traffic data so important in commercial real estate investment and property management today and where does it come from?
Perhaps the most common use of traffic study data in commercial real estate today is in site selection. The best information can help business buyers and tenants, investors and their agents find the best properties, and the best fit for their needs.
More recently this has been a tool for finding value add opportunities and bargains with larger potential future value.
However, there is equal if not more value in traffic data for existing commercial property owners. Uses include finding ways to maximize perceived value of units to lease, leasing units faster, and increasing total property performance.
It can also be an important factor when borrowing or raising funds. Tenants and future buyers want it too, and just being able to provide great data can be a way to stand out and increase value by itself.
However there have been significant challenges and disparity between what industry professionals and market players want and what has been available to them. Until recently this field has been plagued by poor, out of date data, information that doesn’t account for new development and changes and is often anything but detailed or visually appealing.
Commissioning new, customized studies can be extremely expensive, unreliable, time consuming and downright impractical. Traditionally they have required hiring hands to stand out and clock passing vehicles and pedestrians, or outsourcing the process through expensive and extremely slow challenges.
Thanks to technology this is changing fast. One alternative in particular – using sensors either to track Wi-Fi enabled phones and devices or to detect motion can come with many superior advantages, especially if the information is delivered in a great format.