Clean Data in Real Estate (Interview)
Ahead of the upcoming release of ARGUS Voyanta we sat down with James Hutton (Product Manager) to discuss if clean data in the Commercial Real Estate Industry (CRE) truly exists and the challenges associated with achieving it. As ARGUS Voyanta continues to grow, we discuss what decisions are being made to continually innovate and stay ahead of industry demands.
Do you feel that the real estate industry understands the importance of clean data?
Yes. Last year, Altus Group surveyed 400 C-level and senior executives for its CRE Innovation Report. 51% of respondents agreed with the statement that “we have issues around capturing collecting and managing the data” that they need for effective management. So having clean data is a big challenge in the industry, and senior management understands this.
Do you think that “a single source of data” is ultimately possible in real estate?
Yes, but to make it happen, there are three main challenges to overcome.
Firstly, data normalization: many CRE investors use external property managers or JV partners for the day-to-day management of their properties. These 3rd parties will supply leasing and financial data to the fund manager, and typically each party will supply the data in a different format, making it difficult for the fund manager to get performance metrics at the fund level.
Secondly, data silos: a typical investor uses several CRE applications, such as ARGUS Enterprise, property management systems and loan management systems, to manage their data, so their data is spread across multiple sources. This adds to the burden of keeping clean data and getting the right data quickly.
Thirdly, data accuracy: with data coming from so many sources, it can be hard to know whether the numbers can be trusted. It’s essential to have a proper process for validating and signing off all data that the fund manager uses for decision-making.
How does Voyanta help achieve a single source of data?
Voyanta provides a number of tools to help the fund manager address the three challenges that I have just outlined. It provides a data model that covers every aspect of a CRE portfolio, including leasing, financial, debt, valuations and returns. This enables the fund manager to standardize on a single format. Voyanta has an automatic validation engine that checks for thousands of common errors in CRE data, enabling the fund manager to have confidence that the numbers are correct. Voyanta’s data submission and review screens enable the fund manager to implement a review and sign-off process for all data changes, plus an audit trail, providing a further check for accuracy.
Finally, Voyanta has a robust reporting layer that lets the fund manager access the data in the way the manager needs it. Out of the box, Voyanta has a comprehensive set of standard reports, all designed especially for fund managers. The fund manager can also slice and dice data according to his or her needs using Voyanta’s excel add-in, and our soon-to-be-released custom report designer.
How does eliminating data silos ultimately help an asset or portfolio manager? What is the positive impact it can have on their business?
Ultimately, it frees up the fund manager to focus on his or her core mission: maximizing returns and minimizing risk. It eliminates the time-consuming chore of tracking down and validating the data necessary to make decisions with confidence.
Do you have any examples of clients you’ve helped or interesting stories around “data management” ?
We have just gone live with a fund here in London that uses a number of third-party property managers for the day-to-day management of its properties. The fund needs to collect leasing reports each month from each of these managers. Before implementing Voyanta, the fund was struggling to manage all the leasing data, because each property manager supplied it in a different format, and often the data contained basic errors. With Voyanta in place, the fund now has leasing data in a consistent format. One interesting part of their implementation is that they’ve implemented a robust sign-off process for all leasing updates. Voyanta’s screens provide the asset managers with a variance report for all changes to leasing data, which the asset managers sign off each month. This means the portfolio managers know that all the data in their leasing reports have been checked by the relevant asset managers, giving them confidence that their numbers are correct.
Find out more about what’s new in ARGUS Voyanta