The Power of Data for Site Selection

Information is more readily available, but integrating it with existing analytic tools is still a challenge, observes Subtext's Marina Malomud.

Site selecton

Marina Malomud

Site selection for multifamily development is much more complex than finding that perfect Main and Main location. To do it well, it should paint a picture of market fundamentals and renter preferences today and into the future. Data—and one’s ability to analyze it—should be the foundation of site selection strategy. But as many developers have found, data related to commercial real estate historically has not been available or has been incomplete, and is now becoming more commonly available from disparate sources that don’t easily integrate into analytics tools. This can leave an overwhelming amount of data points without a clear way to analyze them. Let’s dive into how our team at Subtext—a national developer of multifamily and student housing properties—addresses this vexing problem.

Extracting important data amid a data surge

Data related to real estate is becoming more available by the day, and is growing at an exponential rate. Subtext tracks a large number of data points in our analyses and pairs that information with proprietary modeling and technology to ensure that our site selection decisions align with our investment strategy. We use a wide range of metrics that encompass not only conventional variables like population growth and income, but also factors such as educational attainment, regional climate condition, and projected growth in targeted employment sectors.

Once a market satisfies criteria we’ve outlined for our communities, we dive deep into submarket fundamentals to identify neighborhood growth patterns influenced by demographics, employment trends and government investment. We leverage property-specific and market-level data from a handful of paid subscriptions. Additionally, public sources like American Community Surveys and zoning data provided by local municipalities are some of our foundational data sources and shouldn’t be overlooked.

Data visualization is crucial to understanding and fully utilizing large datasets. At Subtext, we’ve discovered immense value in creating custom platforms that allow us to display and analyze a range of data on interactive nationwide maps. By employing these maps, we effectively visualize our ranking models and identify promising target areas and sites. But the benefits don’t stop there.

By visually presenting all of the pertinent information, the decision-making process can be greatly expedited. Decision-makers and outside partners who may not be directly involved in the granular analysis benefit from a big-picture, synthesized view into an opportunity. This approach reveals statistically significant and forward-looking insights into a given location.

Moving at the speed of tech

Acknowledging the constant evolution of the technology landscape is crucial when working with data. It is imperative that the framework and data sources are inherently flexible and adaptable. At Subtext, we always plan for the integration of new tools, guaranteeing that our approach remains adaptable.

The latest advancements in real estate technology allow us to refine and customize our tools, which in turn provide us with greater precision in identifying and understanding core and high-growth markets and the neighborhoods and people within them. More important, they allow us to clearly see the right path forward.

Seeing into the future

Data-driven site selection empowers us to unlock the untapped potential of multifamily housing in high-performing markets. Through years of investing in and implementing cutting-edge technologies, we have honed a data-driven technique that that can be replicated across markets. This approach has revitalized and streamlined certain conventional site selection practices for us, ushering in a new era of efficiency and effectiveness.

Marina Malomud is partner and COO of St. Louis, Mo.-based Subtext.

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