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Three ways that data can help CRE navigate market turbulence
With American Thanksgiving approaching, it may be difficult for many in the property industry to feel overly grateful - at least from a business perspective.
CRE firms find themselves planning for 2023 against a backdrop of political change, public health crises, energy shortages, and a global economic downturn. At NavigatorCRE, we're often asked how data can provide clarity and insight in such a turbulent environment. Here are three ways:
1. Identifying Risk
EMEA & Corporate Development
Access to the right data can illuminate unseen risks within a portfolio and allow decision makers to plan accordingly.
Comprehensive, high-quality data can track things lease expirations and upcoming vacancies. It can help firms work out how to extend or replace a tenant, or where they are exposed to a particular tenant or industry. Data can provide guidance on capital expenditures, including what projects need to happen or have already been committed, and how firms can plan for those capital outlays. It can show what covenants are in place across the capital structure of a portfolio or asset, when re-payments are due or debt is maturing, whether refinancing is required, and even which capital partners are providing the best terms.
That level of insight means CRE firms can prepare for potential bumps in the road, and make smart decisions grounded in quantitative evidence and real-time information.
2. Building Trust
Turbulence can understandably breed concerns for investors.
Rather than allowing uncertainty to rule the investment cycle, timely, data-led reporting creates complete transparency between investors, owners and asset managers. It's that level of transparency that can ultimately calm investor concerns, cultivate trust, and build credibility - even during periods of turbulence.
3. Seizing Opportunities
Leveraged correctly, data can actually turn challenges into opportunities, allowing for a quicker and more reliable identification of trends across asset classes and geographies. Data can reveal which properties will retain value, or which asset types are performing well, as well as which regions are undervalued.
Firms can spot opportunities and beat competitors to deals they otherwise wouldn't see, especially against the backdrop of their own portfolio in those markets. During seasons of turbulence, identifying mispricings or opportunities with outsized risk-adjusted returns is critical; being quick to take advantage of them, is even more so.
- Don't Use A Broken Compass -
2023 is set to be a challenging year for commercial real estate firms. It's vital that companies navigate the challenges ahead with the correct tools in place. Making decisions based on gut feeling and guesswork will be like heading on a tough expedition with a broken compass.
In a season of uncertainty, access to fast, accurate intelligence is what is needed, and that is something that only integrated, understandable data can provide.
By Will Young, Vice President, EMEA & Corporate Development, NavigatorCRE.
