How Location Data Is Changing CRE, Site Selection, and Growth Strategies
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How Location Data Is Changing CRE, Site Selection, and Growth Strategies

How Location Data Is Changing CRE, Site Selection, and Growth Strategies

Mobile location data has changed how commercial real estate (CRE) professionals understand consumer behavior and decide on site selection, development, and investment. Historically, professionals would rely on manual methods like drawing circles on maps to estimate customer trade areas. Today, smartphones and sophisticated mapping technologies have enabled the collection and analysis of vast amounts of mobile location data, providing valuable insights into consumer movements and preferences.

Location data: pros and cons

Overall, integrating mobile location data with other sources of information, such as demographics and social media activity, enables real estate professionals to create comprehensive analyses and strategies for their franchises. This data-driven approach can lead to more efficient, profitable, and less risky investments in commercial real estate.

Geofencing, a process where digital boundaries are drawn around specific areas, allows franchisors to track the movements of mobile devices within these boundaries. This data provides a more accurate depiction of customer trade areas, which can often be irregularly shaped and extend further than previously estimated. By analyzing this data, real estate professionals can understand how people move throughout different times of the day, week, or year, identify popular areas, and assess competition.

Despite its power, mobile location data has its limitations. It cannot replace real estate professionals’ expertise and local knowledge, and it may not accurately track vertical movement or spending behavior. Additionally, concerns about privacy and data security have arisen, leading to calls for increased regulation. However, when used responsibly, aggregated and anonymized mobile location data can provide significant advantages in reducing risks and making informed decisions in commercial real estate.

What mobile location data offers

Mobile location data provides unprecedented insights to property owners, landlords and lessees, property developers, and CRE professionals. By harnessing the power of mobile location data, stakeholders can pinpoint the best locations, optimize property management, and mitigate risks associated with site selection and investment.

Site selection and expansion strategy. Some franchisors leverage mobile location data to identify prime locations for store openings. By analyzing customer foot traffic patterns, demographics, and shopping behaviors, companies can confidently identify underserved markets, assess competition, and refine their expansion strategy. This data-driven approach minimizes the risk of choosing suboptimal locations and ensures maximum ROI on new franchise investments.

Tenant and property management. Property owners and managers use location data to optimize tenant mix, enhance property value, and improve the overall tenant experience. By analyzing visitor demographics, behavior, and preferences, landlords can curate a diverse mix of tenants that cater to the needs and preferences of their target market. Additionally, location data enables landlords to optimize leasing strategies, identify potential vacancies, and negotiate favorable lease terms based on real-time market insights.

Investment and development decisions. Investors and developers rely on mobile location data to assess market demand, evaluate property performance, and identify investment opportunities. Investors can make informed decisions about property acquisitions, development projects, and portfolio diversification strategies by analyzing visitor traffic, market trends, and the competitive landscape. This data-driven approach minimizes investment risks, maximizes returns, and enhances long-term asset value.

Market research and trend analysis. Location data is valuable for conducting market research, trend analysis, and forecasting in the commercial real estate sector. By tracking consumer behavior, spending patterns, and demographic shifts, franchisors can anticipate market trends, identify emerging opportunities, and adapt their strategies accordingly. This proactive approach enables franchises to stay ahead of the curve, capitalize on market trends, and maintain a competitive edge in the rapidly evolving real estate landscape.

Risk mitigation and compliance. Mobile location data helps franchises mitigate risks associated with site selection, lease negotiations, and regulatory compliance. By analyzing historical data, market dynamics, and regulatory requirements, franchisors can identify potential risks, anticipate challenges, and develop contingency plans to mitigate adverse impacts. This proactive approach minimizes operational disruptions, legal liabilities, and financial losses.

Summary. Mobile location data has transformed commercial real estate strategies and tactics by providing franchisors and franchisees with actionable insights that drive decision-making, mitigate risks, and optimize performance in an increasingly competitive marketplace.

Ginny Gaylor is an award-winning writer and editor based in Greensboro, North Carolina. She has more than 25 years of experience writing on a variety of topics from home furnishings to health care, hospitality to lifestyle. She can be reached through her website, ginnygaylor.com.

Published: May 16th, 2024

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