Too many developers and investors follow the same pattern: target deal flow, analyze deal by deal and make decisions based on what comes into their funnel. This reactive approach wastes time and analytical resources while missing better opportunities. “For commercial real estate (CRE) professionals operating across multiple regions, imagine having a research tool that locate smaller geographic areas—whether across several states or nationwide—where future demand is expected to be strongest and that also align with their specific investment criteria and preferences”, Ruthy states.
What would be the benefits of this tool?
- Being Proactive – The user controls the investment process instead of being led by deal flow.
- Developing Efficient Acquisition Process which is focused on searching the locations where the most attractive opportunities are based in. Save analytical resources. Save money.
- Speeding The Investment Decision Making
- Increasing IRRs Significantly – The geographies a user is directed to by the tool are those predicted to have the highest capital gains. If you’re expected to hold the properties for about 3-5 years, your IRRs are mainly based on price movements.
“Based on these potential propositions, we, at Risespot, started to develop this research tool about two years ago. During this period, we analyzed a wide range of features whose combination effectively explains why certain areas are likely to thrive most in the future. Together with our expertise related to developing of the predictive models, we finally created a one-of-a-kind product, with proven results, which can be trusted by our users”, she noted.
Starting With Location Intelligence Platforms
RiseSpot’s approach starts with small geography, Census Tracts. Not deals. Working with data scientists and GIS experts, Ruthy has developed predictive models that assess the future demand of each Census Tract. “We’ve developed three different platforms (Multifamily, Retail & office), since each asset type has its own characteristics. Once the users identify the most attractive areas, they can then target deal flow within those specific locations”, she says.
Gaining Control Over Investment Strategy
The streamlined process produces measurable results. When investors know which areas offer the best potential before looking at specific deals, they can make decisions much faster. The platform provides immediate access to the raw data of any Tract and the explanatory features about why certain areas scored well, eliminating weeks of preliminary research. Users start with a map of the entire United States and a filtering system with numerous features. “In a few minutes, our users can identify the areas which are expected to grow most and also align with their investment criteria and preferences”, Ruthy explains.
Leveraging Exclusive Transportation Data
RiseSpot’s models’ accuracy comes from proprietary forward-looking data. Risespot collects data of under planning transportation projects from hundreds of MPOs across the U.S. “Our models track any project programmed since its first announcement date. The announcement of a new transportation project often follows the planning of major development initiatives, such as the arrival of large employers, workforce expansions, or the development of new retail sites. Therefore, provided that other factors also in place, the announcement date may serve as the starting point for positive transformation in the area surrounding the transportation project. “We are the only one who gathers all this information from the different MPOs across the US and processes it into our models,” she states.
Predictive Models As An Assurance For Your Gut Instincts
Risespot’s platforms process thousands of variables to create predictive scores for different areas. “Predictive models have incredible power” Ruthy notes. “They can detect subtle indicators emerging in specific areas and convert them into an attractiveness score. Additionally, our score allows users to compare the future demand across all areas with just one click. We observe neighboring tracts with vastly different scores, and notably, the features that explain why one area is attractive can be entirely different from those driving appeal in another”, she explains.
Connect with Ruthy Dahan-Portnoy on LinkedIn to explore Risespot products and start your free trial today!
