Selecting the right site for commercial real estate development can be an expensive and risky investment. It can, however, pay off in the long run if commercial real estate (CRE) companies use location intelligence in their analyses. CRE companies can use foot traffic data derived from geospatial data to gain real-world insights, helping them make the best location selections. By enriching foot traffic data with other CRE datasets, your commercial real estate research can provide you with actionable insights, added clarity, rich context, and more value for your business. Here’s how.
Go Where the People Are
Consumer foot traffic trends are always shifting, especially after the pandemic. One of the most impactful ways to use foot traffic data for real estate market research is to identify and predict movement patterns in the real world. By determining the places people are moving to and from, CRE owners and managers can determine which areas of the country make for smart investments by developers.
Population movement trends are important to understand, especially with the way the world has shifted in recent years. With the extraordinary circumstances consumers faced during the pandemic and the growing popularity of remote work and school, tens of millions of Americans relocated. The Great Relocation caused major shifts in foot traffic trends across the country and had an impact on businesses of all types. By understanding the ways in which the population shifted during this period and the ways in which the population continues to shift post-pandemic, CRE companies can stay ahead of the curve and remain competitive in changing markets.
Top 3 Ways to Use Foot Traffic Data for Commercial Real Estate Market Research
While foot traffic data is perfect for helping CRE professionals understand population shifts and trends in different areas, there are a variety of other ways to use this powerful data for CRE research. Here are three ways foot traffic data can be used for effective commercial real estate research.
1. Understanding Consumer Activity
Property development is an expensive commitment that can prove costly if the wrong location is chosen. Proper commercial real estate research can be the difference between a sound investment and a risky one. This is where location intelligence, like foot traffic data, comes in. Foot traffic data can fill in the information gaps left by other types of CRE datasets and provide an added layer of real-world insights and rich context to your other datasets.
It’s important to think long-term instead of making site selection decisions based solely on current market trends. CRE professionals should consider using historical data to ensure their research is well-rounded and long-term. This can better prepare you to make brilliant business decisions and select the best possible locations for the long haul. Analyzing enterprise location intelligence over certain periods of time not only helps you understand current and previous market trends but also helps you predict future changes and plan for unexpected shifts.
Every area or community will eventually face some kind of social or business shift, which will most likely have an impact on real estate prices and consumer activity. So, compiled foot traffic data with benchmarks on consumer activity can act as a compass to guide you through what’s to come.
2. Matching Clients to the Right Location
To ensure successful site selection, it is important to understand the consumers who visit the area. A commercial real estate company’s clients might require insight into the preferences and habits of those potential customers before they are ready to close on a property. The places that consumers visit in the real world can indicate their interests, and the places they visit repeatedly can indicate their habits, preferences, and routines. This can help CRE researchers build well-rounded, in-depth profiles of the types of consumers in an area, bringing clarity to what types of businesses would make a good fit.
For example, a property developer can analyze foot traffic data at a shopping center near their new site. By understanding what these consumers are interested in (ex. bubble tea shops, wholesalers, discount stores, etc.), they can reassure potential tenants that their businesses are a good fit for a particular site.
3. Comparing Potential Sites
Location intelligence can be used as a competitive intelligence tool for a thorough market analysis of all potential sites. With location intelligence like foot traffic data, CRE companies can compare sites against each other to determine which one has the most profitability potential by allowing companies to analyze their competitors. Locations with too much competitor saturation may be hard to break into and could potentially diminish revenues. An area with very low competitor saturation and increasing consumer activity could make for the perfect location for commercial development. These are all insights you can find with foot traffic data.
Competitive intelligence can help commercial real estate companies identify opportunities and capitalize on them before their competitors do.
Better Commercial Real Estate Market Research with Foot Traffic Data
With foot traffic data, commercial real estate research is more thorough, accurate, and in-depth. Companies can compare potential sites, match clients to the right location, and understand consumer activity. Plus, CRE companies can determine market demand in an area, understand why the population is growing or shrinking, and gain a competitive edge by using location intelligence. This increases a CRE company’s chances of finding the best site for a business that meets the needs of future residents and visitors.
