When I think about the commercial real estate industry now compared to what the space looked like a mere five years ago, it’s night and day. The landscape we once knew has transformed tenfold, with the most recent wave of real estate technology (proptech) redefining an increasingly intricate market and the strategies used to navigate it. A result of such developments, commercial tenant data has made its way to the forefront, a catalyst that’s changing the way modern investments are found and made.
From my time spent with the CRE community, I’ve learned and built a business on the belief that access to unprecedented tenant intel is invaluable for a wide arrange of users, ranging from the sprawling institutional firms to independent brokers. Why? When leveraged with supplementary property insights, occupant information enables a complete comprehension of assets at stake — a fundamental element in successful prospecting and valuation accuracy. This is what’s moving the needle for our users, and it’s how the commercial real estate community as a whole can elevate its investment decisions.
A Proactive Approach
“Passive” and “commercial real estate” don’t exactly go hand-in-hand, especially in today’s mercurial market. The influx of technology and tools has competition for high-demand assets heating up, making it all the more imperative that professionals take proactive measures to identify remunerative opportunities. Access to occupant structure ensures this; by arming themselves with an arsenal of insights in the preliminary discovery phase, investors and brokers can fuel more aggressive tactics to find better properties faster.
Without holistic tenant and property insights, the sourcing phase is prolonged and inefficient. Professionals are left to their own devices, which typically entails tediously pouring through disparate records and playing connect the dots with a plethora of unconnected property data.
Instead, access to property insights expedites the prospecting process completely, enabling real estate professionals to explore property resources in a single location and unlock a comprehensive understanding of an asset before ever stepping foot in the door.
What, exactly, should these tenant insights look like? Sophisticated data platforms will include occupant name and classification, like NAICS and SIC code, that are essential to understanding a building’s tenant makeup and evaluating its potential in exploration. When combined with other property information, like ownership portfolios and property specs, data users have a better understanding of the opportunity at stake and can easily identify the opportunities worth pursuing, opposed to those that aren’t up to snuff.
Long story short: The more property information investors and brokers have at their disposal, the better equipped they are to make decisions earlier in the prospecting phase, pushing them past the less-sophisticated competition.
Asset Health, Potential Wealth
It’s no secret a building’s value is largely contingent on its existing tenant base. Occupant structure often indicates property stability, sophistication and potential yield — all necessary components to consider in the latter stages of valuation.
Knowing exactly who is leasing space in a building helps investors and brokers better gauge potential return on investment (ROI). Not all occupants have to be blue chip companies, but it’s promising if current leasees are mature, dependable organizations with healthy track records. These sophisticated occupants are equipped to continue leasing, even after a change of ownership, securing a consistent flow of income down the line. Using tenant data, like company name and date founded, takes the guesswork out of evaluating properties and understanding their potential.
Similarly, access to rich, granular insights can point to more opportunities for passive income, a popular extraneous source of regular revenue. Depending on the organization, certain leasing agreements can alleviate landlord duties while still generating wealth. Triple net leases, specifically, give tenants full rein of the property financially while landlords maintain consistent proceeds — a win-win for both parties.
In these scenarios, it’s also advantageous for interested parties to leverage owner contact information to get in touch with owners directly and confirm ambiguous leasing specifics. This allows potential investors to better understand the property’s net operating income (NOI). When armed with both an understanding of the market and comprehensive tenant insights, investors and brokers can make more accurate estimations during valuation. Overall, knowing which tenants currently lease and are likely to agree to more stable, profitable terms can empower smarter decision making for both investors and brokers.
As professionals continue their quest for high-value assets, commercial tenant data plays a crucial part in streamlining their search. No longer are occupant insights deferred to a select group of leasing representatives — their value transcends the commercial real estate community, specifically to investors and brokers. Combined with holistic property insights like structural specs, transactional information and ownership records, tenant information empowers these users to focus their prospecting strategies and evaluate opportunities for more strategic, profitable decision making.