As with all services businesses, commercial real estate brokers who represent tenants sometimes have a tough time differentiating themselves from competitors. To help gain an edge, a number of tenant brokerages that operate in North Texas are building in-house data tools to better assist clients in assessing everything from a region’s labor availability and cost to commute times, airline transport and, yes, real estate expenses.
This type of information has been available for years from commercial providers such as New York’s Nielsen.
“They do a very good job,” says Randy Cooper, vice chairman and principal in the Dallas office of Cassidy Turley of the various data services. “The demographic information is terrific.”
But area experts say that no single data tool on the market covers every factor a client might need in choosing a site.
“Probably the biggest gap in the market is there is no consolidated source that has—ready to go, plug and play—all aspects of why companies make decisions,” says King R. White, president of Site Selection Group LLC in Dallas. “That’s where the confusion is happening.”
That’s one reason why more tenant brokerages operating in these parts are hiring data whiz kids to crunch their own numbers and create their own heat maps. Another is sheer pragmatism. If your brokerage is using the same commercial data tools as the guy down the street, why should a client prospect pick your shop?
Thus the emergence in tenant rep circles of people like Evan Stair. As vice president of site selection and research at Cresa Dallas, Stair specializes in geographic information systems, or GIS, which involves using computers to analyze and create maps and other images out of geographic data.
Need to know where all electrical engineers live in Garland? Stair can gather that data, crunch it, and create a map to show the concentrations. Ditto for the average commute times in traffic for a new facility, along with projections of where that labor force will be living in five or 10 years.
Stair can even use Google databases to check out the cars that Garland’s electrical engineers are driving to help validate the wages that a Cresa Dallas client might be considering paying.
“As our baby boomer generation gets older and ages out of the workforce, the millennial population is taking over,” Stair says. “That’s the target market that companies want to hire.”
Most of the data tools that Cresa Dallas uses are Stair’s creations, says Susan Arledge, managing principal.
“Subscription databases are very expensive,” she says. “There is a huge initial front-end investment. And they wouldn’t do you any good if you can’t manipulate or map the data.”
THE NUMBERS GAME
People like Stair are popping up in the North Texas offices of other tenant rep firms, too. Site Selection Group, for instance, now has five people on staff with undergraduate or advanced degrees in GIS, urban planning, or related fields, according to White.
“It’s all staff- and resource-intensive, and depends on what you have the ability to do,” says Duane Dankesreiter, vice president, business information and research at the Dallas Regional Chamber. “Most of the site selectors have their own tools and databases.”
The emerging plethora of data tools is a big reason why the Dallas Regional Chamber created its Economic Development Guide, which aims to give answers in a general sense to all the questions that companies have about North Texas when they are looking to relocate, Dankesreiter says.
“From the Dallas Chamber’s perspective, we’re using tools to explain Dallas-Fort Worth over places like Atlanta,” he says. “From the number of corporate relocation projects we’re doing, I think that’s a good sign that we’re doing something right.”
JLL, the Chicago-based company formerly known as Jones Lang LaSalle, has a sizable North Texas presence, owing to its acquisition of Dallas-based The Staubach Co. in 2008. JLL uses a proprietary offering called iLocate, which helps companies uncover and rank potential locations while finding savings in areas like infrastructure, labor, and business taxes.
Another JLL tool, Blackbird, allows the firm’s clients to see tenants in a given building and where competitors are located, says Steve Thelen, a Dallas-based managing director at the firm.
“In the past, it would take three to six months to evaluate markets,” he says. “Now it’s a matter of weeks. More companies are using this, and more of our brokers are using this resource.”
Cushman & Wakefield uses four or five different data tools, depending on a project’s needs, says Michael McDermott, a Chicago-based consulting manager. For instance, a decision-modeling tool allows clients to see how different locations measure up based on their criteria, such as labor cost, he says.
“They’re meant to be adaptable,” he says of the group of tools. “There are different ways to narrow in on what the hot buttons might be.”
For its part, CBRE uses a collection of external data sources and internally aggregated data, tools, and analysis to arrive at customized solutions relative to each site selection process, says Steve Berger, Dallas-based first vice president in the firm’s industrial brokerage group.
CBRE’s data sources include property information, demographic studies, labor studies, tax impact analysis, and logistics, Berger says. “CBRE has a broad array of resources available across the company, including in Dallas, that we draw upon for the data needs of a given client,” he says. “Those resources include centers of excellence, which are specialized groups within CBRE that focus on different areas of analysis.”
BOOTS ON THE GROUND
Meanwhile, real estate professionals across North Texas rely on data tools that keep track of commercial properties, such as buildings available for sale or lease, which tenants are in what facilities, lease rates, and building occupancy.
One of the biggest players in that field is Blue Springs, Missouri-based Xceligent Inc. Chris Summers, the company’s Dallas-Fort Worth market director, says Xceligent’s database covers 14 counties in and around DFW. It provides real estate pros with information about everything from leasing and sale histories on given facilities to vacancy listings.
“It is their daily working platform,” he says.
Xceligent goes head-to-head with Washing-ton, D.C.-based CoStar Group Inc. Jim Trainor, CoStar’s Dallas regional director, says the business spends about $120 million to $130 million annually companywide on research. CoStar also helps make deals happen through its LoopNet business, an online marketplace for commercial real estate. “It’s a huge operation,” Trainor says.
No matter how sophisticated the data crunching methods a tenant firm might have in-house, nothing beats checking out short-list properties in person, experts say. The reason: a data analysis is only as good as the underlying information it relies upon, whether that comes from a state, county, federal agency, or a private vendor. No database can contain every item of information that a particular company may value in making a decision.
And when it comes to checking out access to labor in a particular submarket, clients sometimes go old school, says Cooper, of Cassidy Turley.
“They will do [help wanted] ads in the paper and see how many responses they get,” he says. “They’ll do job fairs at a hotel and see how many prospective employees show up. They will virtually always test it.”