Predictive analytics in commercial real estate today and in prospective

Predictive analytics in commercial real estate today and in prospective

February 01, 2022

Management of assets in the property relies on a set of financial perspectives and in view of the fact that the property has been put into operation. Real estate technology companies rely on:

  • The cost of the rent;
  • The cost of the land;
  • Investment structure.  

Nowadays, there is more information available than ever for figuring out which commercial property can become a smart investment. Investors can study information not only about rental spreads, market demand, gentrification trends, information about tenants, but also about the proximity of a subway station, the number of cafes, schools, and other infrastructure nearby, and much more. Moreover, real estate technology companies are interested not so much in the current state of the market, but in its predictive analytics.

Some investors and managers may not be able to actually analyze the data. After all, it takes a lot of effort to fully review all the available data and make sure it is true and compatible with their investment method. There may not be enough risk management or analysis instruments, so investors might not study the data in-depth.

Predictive Analytics in Commercial Real Estate

Artificial Intelligence (AI) opens access to unique experiences for property market participants. Real estate technology mechanisms adhere to the algorithms designed in view of the existing information and how market participants behave. On this basis, AI forms various purchase models and delivers actual information to consumers.

As the demand for predictive analytics-driven information increases, data analytics, and artificial intelligence can help recognize potential tendencies that you can then use to raise profit.

The advantages:

  • Portfolio access to information about almost an unlimited number of commercial and home property objects. You get the ability to analyze information and forecast when owners will sell their property, default, or refinance, which allows you to specify potential risks and possibilities.
  • Accurate forecasts of the price of commercial property. Analytics made in accordance with current trends help you find solutions that will maximize your return on investment in your specified geographic area.
  • Predictive analytics offers up-to-date information about investment trends and is a trusted tool not only for the professionals who need up-to-date information but also for those who have no financial knowledge and experience in the real estate industry.

AI for IT Preventing Outages With Predictive Analytics

Until 2003, the technology market for real estate trade and rental was stable and so did not require any new tech solutions. When artificial intelligence and machine learning technologies appeared in the 2000s, they brought new investment models on the basis of advanced technologies, such as machine learning and artificial intelligence.

Predictive analytics is a great instrument that finds correlation between former trends and events expected in the future. At the same time, artificial intelligence and machine learning process huge amounts of data.

One of the most important advantages of machine learning predictive analytics is its ability to quickly manage all accessible data and identify resources of relevant and irrelevant information. As a result, we get a prediction that corresponds with the working theory and minimizes errors and failures.

Unsupervised machine learning enables early detection of new trends in the real estate market. It is obvious that such models based on the use of previously inaccessible data make it difficult to use the continuity of prediction systems and therefore it is risky to apply such models for investment. However, the connections created by unsupervised machine learning give us enough reasons to trust the accuracy of such predictions, even when they have not yet gained credibility in the property investment market.        

Another incredible advantage of utilizing AI for preventing outages with predictive analytics is that it can manage a massive set of information without human intervention, which helps make the right decisions. Those who want to invest through AI can choose property objects faster relying on data analysis and predictive analytics.

The Future of Predictive Analytics

The benefits of using predictive analytics in commercial real estate cannot be overestimated. AI opens new conditions for all market participants – both brokers and investors. 

We believe AI tech will soon be a common and widely used instrument that will eventually transform real estate.

Conclusion

The Axisbits team has a lot of experience in implementing real estate technology. We can develop first-class customized software for a project of any size. Check out our case studies, and reach out to us if you have any questions.

For a consultation on predictive analytics in commercial real estate, contact us and we'll call you back shortly.

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