Harnessing the Power of Data in Commercial Real Estate

Is the Industry Crossing the Data Chasm?

CRE Innovation Report

Research survey
conducted by
 Table of Contents

4 Overview

5 Executive Summary

6 Key Findings

7 Fourth Asset Class and Growing

8 The Data Problem

11 From Efficiency to Strategy

11 Missed Opportunities to Maximize Benefits

14 What’s Next for Data

17 Hurdles and Challenges: The People Barrier

19 Recommendations

20 Conclusion

Copyright © 2016 Altus Group Limited, All Rights Reserved

3
Altus Group CRE Innovation Report
 Overview

Technology and data are pervasive across nearly
every aspect of the business world. Technology-
driven market evolution and aggressive disruption
is the new rule of thumb and no CEO wants to be
caught in a position of vulnerability by the next
game changer in their industry. Leading businesses
in today’s competitive environment embrace
technology to utilize data for strategic advantage.
However, the sheer volume of data being created,
as well as a lack of data structure, makes it difficult
for even forward-looking companies to take raw,
crude data and refine it into something useful.
Traditionally based on experience and know-
how, the commercial real estate (CRE) industry is
recognizing the benefits of technology investment
while also placing a greater importance and value
on data and analytics. Now widely considered as
the fourth asset class in the market, the industry
is turning to data and analytics amid pressure to
increase shareholder value. A data and analytics
strategy is rapidly becoming a key attribute that
investors seek in assessing the growth strategy of
investment firms. Yet there still exists an industry-
wide gap between having data and being able to
make strategic use of it. The latest Altus Group CRE
Innovation Report “Harnessing the Power of Data
in Commercial Real Estate: Is the Industry Crossing
the Data Chasm?” looks at the current state of
data-driven CRE technology innovation, and how
the industry can take better advantage of data
and analytics to increase value, minimize risk, and
make more strategic decisions in real-time.

KEY QUESTIONS POSED IN THIS REPORT:

The CRE industry is embracing the benefits of technology and data but is the
true potential of analytics being realized and where does the industry still
need to improve?
Does the industry have enough benchmarking data and is the industry
making this a priority?
Are CRE executives embracing, using and becoming active sponsors of data
and analytics?

This report is based on a global quantitative survey
of over 300 CRE C-level and senior executives in
front and back office positions at owner operator
and owner investor firms in North America,
Europe, Asia-Pacific, and Latin America. All firms
that participated in the survey had assets under
management (AUM) of at least US $500 million
at the time of being surveyed, representing an
approximate total AUM of over US $3 trillion. Altus
Group commissioned leading international research
firm IDC to conduct this survey, which was fielded
over the course of June-July 2016, to answer these
questions and help to form the basis of this report.

4
Altus Group CRE Innovation Report

The CRE industry continues to spend billions
of dollars updating its hard assets with sensor-
based, data-collecting technology through
building automation systems and smart building
technologies. But is the industry also taking
advantage of a wealth of unrefined market,
property and business data to better streamline
their operations and generate critical information
required to drive investment performance?
The need for fast and accurate decisions
continues to increase with every transaction, a
requirement that has become the new norm.
To stay competitive, CRE firms need to invest
more aggressively to make the shift towards
using pertinent and timely data to drive decision-
making and strategic planning. From forecasting
and budgeting, to leasing, risk and investment
performance analysis, the industry produces
enormous amounts of data each day; with the
potential for strategic insights that can help firms
drive their business forward. Without technology
solutions that can help to organize, manage and
analyze such volumes of data, this information is far
less useful.
Moreover, for firms to tap into and leverage
integrated portfolio and market data across areas
of their business, many need to first invest in data
management capabilities to enable streamlined
data capture, veracity and normalization. In turn,
improved data analysis and reporting translates
into useful and valuable insights.
The lack of refined data in CRE has left a gaping
hole in the industry’s ability to benchmark. As
an industry vying for global investment, the
transparency provided by benchmarking is needed
Harnessing the Power of Data in Commercial Real Estate
Executive Summary
if CRE is to truly compete for capital against other
well-established investor asset classes, which by
comparison all utilize well established benchmark
indices and capabilities. CRE firms need to prioritize
technology and processes to improve their data
visibility and comparative metrics or they could risk
losing their competitive position.
Investing in tools to process valuable data is vital,
but it is only one piece of the data and analytics
puzzle. The other important piece is having the
right people in the organization with a solid
understanding of data collection, normalization and
management. Investing in employee training and
education at all levels on the benefits of technology
adoption, and also hiring skilled staff with technical
expertise, will enable firms to more easily make the
transition from struggling to manage the volume
and sources of data throughout their organizations
to a position of strategic and competitive
enablement.
Investors are increasingly looking for firms to
provide clarity and real-time information on
assets, portfolios and investment performance.
As an industry, CRE needs to significantly invest in
modernizing its data management infrastructure
- including both tools and skilled staff – as well as
benchmarking capabilities if it expects to continue
to attract and absorb newly invested capital at the
historic levels of recent years.
5
 Key Findings in the Research:

Eighty-nine per cent of firms surveyed have major impediments to collecting and utilizing data
to drive improved decision making.

Over eighty per cent indicated that their firms could make significant improvements in
eliminating or reducing data silos through better data integration and standardization.

Eighty-three per cent of respondents said their firm would see a positive impact on performance
benchmarking from making improvements to its data integration and standardization.

Twenty-eight per cent of the firms do not benchmark their performance against the market at
all, and only forty-three per cent think they are benchmarking well (or comprehensively).

Nearly two thirds of respondents said they need more comparative data to effectively
benchmark.

Forty-four per cent of respondents indicated they do not have sufficient executive sponsors who
are actively involved in exploring innovative ways for their firms to use technology and data.

More than three quarters of respondents said investing in technology and technology-enabled
process improvement to support its asset and portfolio decision making is a major priority for
their organizations.

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Altus Group CRE Innovation Report
 Fourth Asset Class and
Growing
Last year’s Altus Group CRE Innovation Report
“Future-Proofing the CRE Industry: Is Commercial
Real Estate’s Innovation Curve Moving Fast
Enough?” noted CRE’s phenomenal growth in
investment importance over the past two decades;
research performed by Cornell University’s
Baker Program in Real Estate found that global
institutional investors’ increasing allocation to CRE
had driven a tipping point where CRE had gained
fourth asset class status. One year later this trend
continues even stronger:
9.3%
8.9%
201 201
3 4
Source: 2016 Institutional Real Estate Allocations Monitor, Hodes, D., & Weill, D., Cornell University Baker Program in Real Estate and Hodes
It’s clear that the CRE industry is competing with
other asset classes that have more visibility,
more transparency and simply more intelligent
information to make investment and performance
management decisions. In order for the industry to
1
Source: Azelby , J., & Hudgins, M. “The Realization: A new world. A new normal. A tectonic shift.” New York, NY: JP Morgan, Asset Management April 2012
Harnessing the Power of Data in Commercial Real Estate
“The evolution of the real estate class to a
10% allocation, long recommended by many
industry participants, now seems inevitable.
Some institutions have predicted allocations
may increase significantly from 10% to 15%
over the next decade, as real estate continues
to shift from an alternative to a mainstream
asset class. We are in fact aware that some
leading North American institutions have
already adopted [real estate]… allocations of
18% to 20%.1”
10.3%
9.9%
9.6% *anticipated
201 201 201
5 6 7
Weill & Associates, LP, October 2016
maintain and grow in its position, it must invest in
solutions and technologies that help to combine,
refine and analyze data ranging from budget and
leasing decisions to returns and overall investment
performance.
7
 The Data Problem
The CRE industry continues to spend billions of in investing in the other end of the technology
dollars each year on advanced building automation spectrum - software applications and solutions that
systems and smart building technologies. At its will help manage and integrate all this data and
core, this investment is being made in sensor transform it into information that can be used to
based, data-driven technology that will enable power all strategic decision making.
property managers to collect a wide-variety of
information about their hard assets. Additionally, INVESTMENTS IN HARD ASSETS VS.
CRE firms are gathering market data and research IT SYSTEMS AND SOFTWARE
for transactions, development, leasing strategies
INCREASE IN SPENDING ($USD)
and investment performance management. Often FROM 2015 TO 2016:
these collections of data are managed separately
and the benefits of an integrated view are never
fully realized.
13.1 11.1
While the industry understands the value of having
this data for specific functions, it continues to lag
% % 5.9%
AUTOMATION SMART BUILDING IT SYSTEMS AND
SYSTEMS1 TECHNOLOGY2 SOFTWARE3
$59.3 B g $67.1 B $6.3 B g $7 B $5.8 B g $6.1 B

“
“
Unrefined Data Glut – More
Data than Ever Before Data is the new oil.
- Clive Humby, Founder, Dunnhumby, 2006
Today, industry analysts estimate that globally
2.5 exabytes of data is created each day, with
an exabyte equaling one million terabytes4. CRE
is absolutely part of this ongoing global data “Data is just like crude. It’s
explosion. The opportunity begins to take shape
when the time comes to process this large volume
valuable, but if unrefined it
of raw, crude data into something of value. can’t really be used.”
- Michael Palmer EVP,
Association of National Advertisers

1
Source: Commercial Building Automation Systems, Navigant Research, Q4 2015 and Q3 2016
2
Source: Global Smart Building Technology Spending 2015-2019 Forecast, IDC Energy Insights, March 2015
3
Source: IDC Market and Industry Estimates, 2015 and 2016 (IT systems includes licensed software, enterprise applications, and hardware)
4
Source: Mikal Khoso, Level Data Analytics Program, Northeastern University, May 2016
8
Altus Group CRE Innovation Report
 While other industries have been harnessing the
power of data and analytics to drive operational
efficiencies and identify strategic opportunities,
CRE has been slow to embrace its potential.
Although the industry is now starting to recognize
the benefits of technology investment, there is still
a significant gap between what CRE invests in the
technology systems that can refine crude data into
valuable information, and what other industries
invest.
In 2015, CRE spent approximately $1.9 billion on
big data and analytics tools and solutions, with a
significant majority of that total invested specifically
within the building automation and smart
building category. This compares with spending
Harnessing the Power of Data in Commercial Real Estate
ranging from $5 billion to $15+ billion in well-
established industries such as Financial Services,
Manufacturing, Retail, Telecommunications,
Insurance and Healthcare (see graph on page 10).
The lagging level of investment in data and
analytics solutions is a contributing factor to the
data challenges that exists within the CRE industry.
Without the ability to make strategic use of data,
the industry is at risk of trailing behind at a time
when investors are increasingly demanding
timely, data-driven decision making and reporting
transparency in assessing real estate against the
other investment asset classes.
9
 SPENDING ($USD) ON BIG DATA AND ANALYTICS IN 2015 BY INDUSTRY:
$19.4B

$14.0B

$10.3B

$10.1B

$4.7B
$8.9B

$4.3B
$7.3B

$1.9B

$1.9B
$5.9B

$1.1B
$5.1B

$5.1B

$5.0B
BANKING/
FINANCIAL SERVICES

DISCRETE
MANUFACTURING

RETAIL/
WHOLESALE

PROCESS
MANUFACTURING

FEDERAL/
CENTRAL GOVT

TELECOMMUNICATIONS

STATE &
LOCAL GOVT

INSURANCE

HEALTHCARE
PROVIDERS

MEDIA

UTILITIES

TRANSPORTATION

COMMERCIAL
REAL ESTATE

PERSONAL &
CONSUMER SERVICES

CONSTRUCTION
Source: Worldwide Semiannual Big Data and Analytics Spending Guide, IDC May 2016
Source: CRE, IDC Market Estimates 2016 (CRE estimate based on total tech spend including IT systems and software, hardware and building automation
and smart building category)

Peter O’Brien, the director of the national “Data is absolutely critical and essential to this
valuation advisory team at JLL United Kingdom industry going forward. What’s referred to as a
has experienced the need for greater access to data chasm in CRE exists because the ability to
refined, strategic information: refine data and put it to strategic or operational
use lags the amount of data that is being
produced.

Significantly, the ability to refine data and utilize

it is not just a matter of tools and systems and
skillsets for CRE; it is also a matter of the data
itself. Specifically, data is neither produced nor
organized in ways that allow it to be easily refined
and consumed for business purposes.”

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Altus Group CRE Innovation Report
 From Efficiency to Strategy
While CRE spends billions of dollars future-proofing
its hard assets, making properties more efficient
is only one small part of the overall technological
opportunity for the industry. A more progressive
approach to analytics is needed in CRE, and the
industry is looking beyond its hard assets and has
now started to put a significant priority on realizing
the potential that lies in the data directly tied to
asset and investment performance.
If owners extend [this] asset view of real estate
across their entire portfolio of properties, they
will begin to understand how each relates
to one another in terms of value and needed
improvements—the way fund managers constantly
run detailed analytics on a stock portfolio. With
[this] transparent view into their assets, and on
an immediate basis, they can know which dials to
turn at which moments to get the absolute most
financial return on their properties.
- IBM Watson - Real Estate Transactions
Case Studies
Missed Opportunities to
Maximize Benefits and Impacts
of Technology and Data
The CRE industry has come a long way in its
utilization of IT systems and software to support
asset and portfolio decision making. Through
prioritizing investment in technology-enabled
process improvements, the firms we surveyed have
experienced a variety of positive impacts over the
past two years:
Harnessing the Power of Data in Commercial Real Estate
aThe CRE market itself is a fountain of data,
generating insightful information on performance
across the industry. There is an incredible amount
of valuable insights that can and should be gleaned
from the investment side in order to make better,
faster transaction decisions:
“The financial side of real estate and real estate
lending is data rich, and [there is] a critical
opportunity to capture and utilize available
information comprehensively, creating much
better insight into the commercial real estate
marketplace. Essentially... having the ability to
examine all loans, borrowers and tenants and the
associated trends simultaneously. This will bring
real estate further into the institutional-investment
arena and allow for more informed decisions.”
- David Tobin, Founder, Mission Capital
Advisors, speaking to Real Estate Forum
in “Big Data is a Big Deal”, Real Estate
Forum, September 2016
POSITIVE IMPACTS DERIVED FROM TECHNOLOGY
INVESTMENT
COST & OPERATIONAL EFFICIENCIES 86%
DEAL TRANSACTION/EXECUTION LIFE CYCLE 84%
QUALITY OF DATA AND MARKET INSIGHTS 84%
PORTFOLIO VISIBILITY (INTERNALLY
AND TO INVESTORS/PARTNERS) 81%
ABILITY TO RAISE CAPITAL 73%
INVESTOR AND/OR BOARD REPORTING
69%
11
 However, as the industry is improving at making
better use of technology, it is clear that a lack of
integration of information systems still exists,
as just over eighty per cent of our respondents
indicated that their firms could eliminate or
reduce data silos through better integration and
standardization. As our report last year highlighted,
data silos significantly hamper a firm’s ability to
make fast, effective decisions. The CRE industry
appears to be at a crossroads in its collective
utilization of data. While new and innovative
applications in the way data is being collected,
managed and reported are now more pervasive,
there exists a data chasm of sorts. To get past this
universal challenge effectively means investing in
technologies, processes and strategies that unlock
the benefits of analytics while at the same time
per cent of CRE leaders face impediments
to collecting or utilizing more data to drive
improved asset management and investment
decision making. Even with all the progress
made to date in the industry to improve its data
integration and standardization, firms are up
against a number of data management obstacles
that are impacting their decision making:
MAIN IMPEDIMENTS TO
COLLECTING AND UTILIZING
DATA TO DRIVE IMPROVED
DECISION MAKING
ISSUES WITH DATA

36 % ITSELF (DATA
avoiding potential chaos brought on by a lack of
VERACITY & LACK OF
resources or lack of having a proper data strategy
NORMALIZATION)
to begin with, but these benefits have far reaching
effects and even go beyond just efficiency and
improved performance, and has the potential to
directly affect the return to investors:

“There is going to be a future where there is very

26 %
detailed predictive modeling of what’s going on LACK THE TOOLS

in districts and neighborhoods that will feed into AND EXPERTISE

analyses of individual properties and their value.

The future is about the level of detail you can bring
into analyzing a property’s value.”

- Meighan Phillips - Portfolio Manager,
ISSUES AROUND
Principal Real Estate Investors

28
REGULATORY
% REQUIREMENTS AND
The industry has already started to rapidly embrace LACK OF BUY-IN FROM
the potential of analytics in all its forms, but there THEIR COMPANY
is still a lot of work to do to capitalize on its true
potential. As our research shows, eighty-nine

12
Altus Group CRE Innovation Report
 CRE still has a long way to go until it can call itself a comprehensively data-driven industry. Once the
prerequisite foundation of industry standard and normalized data is established and we bridge the current
technology and data management gap, firms will be empowered to tap into areas that have the potential to
make better use of analytics to improve efficiency and decision making quality:

RESPONDENTS INDICATED THERE IS SIGNIFICANT UNTAPPED POTENTIAL FOR THEIR

FIRMS TO MAKE BETTER USE OF TECHNOLOGY, DATA AND ANALYTICS TO IMPROVE
EFFICIENCY AND DECISION MAKING QUALITY IN THE FOLLOWING AREAS:

SPEED OF DECISION MAKING 85%

ABILITY TO DO COMPARATIVE
REPORTING AND/OR BENCHMARKING 83%

ASSET MANAGEMENT EFFICIENCY 82%

CONSISTENCY/STANDARDIZATION
OF REPORTING FORMATS 81%

QUALITY AND ASSURANCE OF DECISION

MAKING AND STRATEGY
80%

EFFICIENCY IN ADHERING TO 78%

REGULATORY REPORTING REQUIREMENTS

INTERNAL REPORTING FREQUENCY 75%

ABILITY TO DRILL DOWN INTO 74%

OPERATIONAL DETAILS

FUNDRAISING AND RISK MANAGEMENT 66%

13
Harnessing the Power of Data in Commercial Real Estate
 What’s Next for Data: And sixty-five per cent of the firms surveyed
indicated they either need more data or
Benchmarking Continues additional metrics to accurately benchmark,
to Rise in Importance but with significant gaps existing in benchmarking data

Faces Barriers related to returns and valuations.

Increasing globalization of CRE capital flows,

OVERALL:
competition for a limited asset pool, upward
pressure on valuations, and yield compression have

65% 35%
substantially increased CRE investor appetite for
comparative asset performance.

To meet these expectations, CRE firms must be of respondents of respondents

able to benchmark performance at both the firm
and asset level against the market, industry and need more
competitors. The benefits of having these kinds of have enough to
comparative data
comparative metrics could be an inflection point for data to effectively
and/or additional
the industry: benchmark against
metrics to effectively
the industry
benchmark
“There are several CRE industry initiatives
underway that aim to develop standardized
formats for data and if these are successful it WHEN IT COMES TO THOSE WHO NEED
will be a major driver of improved utilization MORE COMPARATIVE DATA:
of industry data for reporting, performance
measurement and benchmarking purposes. RETURNS VALUATIONS

67% 59%
Ultimately this would drive superior operational
and strategic decision making within the industry.”

- Peter O’Brien, Director – Head of National

Valuation Advisory, JLL United Kingdom of respondents of respondents

While the importance of benchmarking is

established amongst CRE leaders, our research would like more would like more
further shows that there is considerable comparative data comparative data
untapped potential to improve CRE’s ability to do and/or additional and/or additional
comparative reporting; eighty-three per cent of metrics metrics
firms saw significant potential to improve its
benchmarking through better use of its data.

14
Altus Group CRE Innovation Report
 Not surprisingly, survey respondents see data
integration and standardization as key focus areas
for driving operational improvements across
various areas where benchmarking is critical to
assessing relative performance:

FIRMS WOULD DERIVE SIGNIFICANT POSITIVE IMPACT IN THIS AREA THROUGH BEING ABLE
TO MAKE IMPROVEMENTS TO ITS DATA INTEGRATION AND STANDARDIZATION:

83%
Getting better market and/or portfolio insights

83%
Lowering transactional or strategic risk

82%
Improving data veracity

79%
Finding new ways to transact

79%
Increasing regulatory transparency

78%
Lowering transactional or operational costs

76%
Increasing the velocity of deals and decision making

15
Harnessing the Power of Data in Commercial Real Estate
 In fact, the difficulty in obtaining refined useful pronounced that twenty-eight per cent of survey
data to effectively benchmark is in some cases so respondents report they do not benchmark.

28% We don’t benchmark/don’t benchmark and have a need for it

57%
29% We conduct some basic benchmarking but we don’t do it very much

29% We benchmark pretty well against the market but could do more

14% We conduct comprehensive benchmarking of performance against the market

Almost a third of the industry not benchmarking
is a striking figure when compared to managers
across other equities and debt asset classes, who
all conduct at least some degree of benchmarking.
While there exist a handful of adopted benchmarks
in the CRE industry, such as those from IPD and
BOMA, other equity and debt asset classes have
several core, high level benchmarks available
for comparison with regards to manager versus
manager and asset level performance. Boston
Consulting Group provides a summary of eight
key high level benchmarks available for reference
(assets under management, net flows, revenue,
costs, operating margin, profit growth, fees and
product mix) with data available for almost all major
asset managers4.

4
Source: Global Asset Management 2015: Sparking Growth with Go-to-Market Excellence, Boston Consulting Group, July 2015
16
Altus Group CRE Innovation Report
 As CRE’s status as the fourth asset class
strengthens, it continues to attract staggering
amounts of global capital. With this has come
increased valuations and yield compression, along
with growing investor expectations for “on-demand” NOW:
data visibility and accuracy. The need to perform in
what has become an ultra-competitive environment firm has increased its
is only getting stronger as the industry grows.
These increased pressures, added to the significant 64% investment in data and
analytics over the past
two years
percentage of firms that do not benchmark, have
left the industry with a data challenge as firms
either lack information or are unable to make
operational and strategic use of it. firm’s investment in

Hurdles and Challenges: Not

31% data and analytics has
remained the same over
the past two years
Just Investment in Data and
Analytics - People May Also
be a Barrier to Closing the
Data Gap FUTURE:

The strides the industry has made towards will increase their
integrating technology show that CRE leadership
is not posing an active barrier to firms investing in 68% investment in data and
analytics over the next
two years
information systems, data and analytics. The growing
prioritization of technology is evident in our research
as ninety-five per cent of firms surveyed say
they have increased their investment in data investment in data and
and analytics (or their investment has remained
stable) over the past two years and ninety-eight 28% analytics will remain
stable over the next
two years
per cent anticipate their investment will either
increase or remain the same over the next two
years:

17
Harnessing the Power of Data in Commercial Real Estate
 However, our survey findings suggest a lack of
executive leadership involvement in determining
how to strategically capitalize on these investments
may be further fueling the ongoing challenges
with unlocking data’s potential in the industry. By
not being actively involved, executives lack the
understanding of what is needed to derive strategic
value from these information systems and data
strategies. So while they understand from a high-
level that data and analytics are needed to compete
in the market and satisfy investor demand, they
appear unaware of the level of expertise needed
to truly take advantage of their investments and
bridge the gap between just having data and being
able to draw strategic insights from it.

FIRMS LACK SUFFICIENT PEOPLE SKILLS TO USE DATA IN INNOVATIVE WAYS

44 %
36 %
35 %

Lack of executive sponsors actively

involved in exploring ways to use
Lack technical people who Lack data analysts that
technology and data effectively/ understand data collection, understand how to look at data
strategically normalization and management and generate insightful reporting

?
? ? ?

34 29
?
% % ? ? ?
? ?

Lack technical people who can Lack business analysts who can
implement and deploy modern look at reporting and prioritize
integrated asset management what is most relevant to their
software applications business

18
Altus Group CRE Innovation Report

Based on the survey results, we’ve identified three
immediate actions that CRE firms should take today:
Invest in a Data Strategy
As the industry competes for capital and maintains
its position as a major investment asset class, the
need for an overall data and analytics strategy
supported by necessary data management tools is
more urgent than ever before. The complex analysis
capability of data-driven technology is the best
way for firms to respond to the mounting industry
pressure from investors for speed and transparency.
However, firms must evaluate and plan for how to
best leverage data solutions within their organization
in order to meet their business goals.
Without these tools or a solid plan, firms run the
risk of perpetuating data silos in their organization
and overlooking insights that can transform
their business. Having a strategic data solution
can provide firms with reliable and real-time
information in order to deliver insights for planning,
raising capital, active asset management and
other business processes. The longer firms wait to
improve their business operations with technology,
the more difficult it will be to catch up to their
competitors.
Implement with the Entire Organization in Mind
Our study shows a contrasting position between
executive investment and executive involvement
when it comes to data management tools and
technology. While CRE firms are planning to invest
more in this area over the coming years, there
is a deficiency with regards to executives’ full
understanding of the required data strategies and
lack of active executive sponsorship tied directly to
these investments.
Harnessing the Power of Data in Commercial Real Estate
Recommendations
In order to successfully implement an effective data
strategy supported by related technologies, firms
must not only have buy-in financially but also work
with the various levels within their organization —
from data analysts all the way to the executive level
— to develop a strategy on how best to leverage
data and analytics for strategic decisions and
insights that will help move their business forward.
Executive involvement may necessitate the addition
of new executives with the expertise to be able to
align it with investment.
Shift Towards Transparency
As a global industry comprised of investors and
capital from all over the world, CRE needs to
continue to increase its transparency in order to
compete with other asset classes. Our study shows
that while there is a need for benchmarking and
performance management data, firms have yet to
standardize their information so it can be leveraged
against internal metrics and industry indices for
better performance analysis.
To do this, firms need to introduce a level of data
consistency by working with industry recognized
data management technology solutions. Ultimately,
the increased use of these data tools will
collectively generate more reliable and consistent
benchmarking data from the industry, allowing for
greater industry clarity and better integration both
within a firm and between firms.
19
 Conclusion
With CRE’s established position as the fourth
asset class, the next phase in its maturity must be
to create a robust infrastructure that allows for
greater data-driven innovation. Failure to adopt
technologies and practices that are routine in other
asset classes, could result in firms being left behind
as the CRE industry continues to advance.
Our research shows that eighty-nine per cent of
firms are still facing a variety of impediments
preventing them from fully leveraging data
insights to drive their business forward. The
industry needs to work towards removing these
obstacles by employing advanced information
systems, because hidden within this data are
strategic insights that can help make firms more
efficient and agile to better meet investor demands.
Data management platforms can also refine
data for benchmarking purposes, needed
across the industry as investors have come to
expect greater transparency. According to our
research, sixty-five per cent of firms need more
comparative metrics to effectively benchmark.
Standardization of data and utilization of available
benchmarking tools is the key to effective
benchmarking which will play an ever more critical
role in driving investment performance.
Furthermore, our research shows the lack of
skilled data analysts in CRE organizations is a
serious industry shortcoming. Over one-third
of respondents feel they don’t have sufficient
skilled staff who understand data collection and
management, or with the ability to properly
20
analyze data to generate insightful reporting.
This skills gap could stem from the fact that forty-
four per cent of firms surveyed feel they don’t
have executive sponsors who are actively
involved in exploring ways to use data and
analytics to strategically drive their business.
Currently there is a lack of understanding among
senior leaders about the benefits of data, but it’s
time for them to educate themselves on this issue.
For firms to truly innovate and leverage technology
for faster and better data-driven decisions,
commitment needs to come from the top.
The CRE industry has made strides to future proof
its hard assets and now needs to prioritize and
invest in data applications and solutions that
can manage the massive amounts of raw data
generated by their assets and investment portfolios.
While the CRE industry has a considerable ways to
go, our research shows that firms are recognizing
the transformative impact that prioritizing and
investing in data strategies and technologies can
have on their business, putting them on the right
path to getting there.
Altus Group CRE Innovation Report
 Altus Group is a leading provider of independent advisory services, software,
and data solutions to the global commercial real estate industry. Our businesses,
Altus Analytics and Altus Expert Services, reflect decades of experience, a range of
expertise, and technology-enabled capabilities. Our solutions empower clients to
analyze, gain market insight and recognize value on their real estate investments.
Headquartered in Canada, we have approximately 2,300 employees around the
Corporate Headquarters world, with operations in North America, Europe and Asia Pacific.
33 Yonge Street, Suite 500
Toronto, Canada

www.altusgroup.com
416.641.9500 Altus Analytics, the software and data solutions business of Altus Group, empowers
commercial real estate clients and partners to work collaboratively to enhance
decision making, drive performance and optimize transactional efficiency. Our
solutions enable customers to better organize and manage data while connecting
them with the right information to help them gain a complete picture of real estate
assets, portfolios and transactions. Combining our industry leading software
solutions ARGUS and Voyanta with integrated portfolio and market data provides our
clients with the visibility and assurance to make better decisions, faster.

Altus Expert Services, the professional advisory services business of Altus Group,
delivers industry leading independent valuation, cost consulting, property tax and
geomatics solutions. Our global expertise combined with regional market knowledge
provides commercial real estate clients with greater insight to identify risks and
maximize value on their investments. Through our multi-disciplinary consulting and
research teams, we help firms see not only the big picture but deliver the knowledge
and insights to form broader-looking perspectives. Our technology-enabled services
and tools help our clients manage a wide variety of projects, business requirements
and mandates.

IDC is the premier global provider of market intelligence, advisory services,

and events for the information technology, telecommunications and consumer
technology markets. IDC helps IT professionals, business executives, and the
investment community make fact-based decisions on technology purchases and
business strategy. More than 1,100 IDC analysts provide global, regional, and local
expertise on technology and industry opportunities and trends in over 110 countries
worldwide. For 50 years, IDC has provided strategic insights to help our clients
achieve their key business objectives. IDC is a subsidiary of IDG, the world’s leading
technology media, research, and events company.