Data management in commercial real estate: best practices for reliable budgeting and reforecasting

In the world of commercial real estate (CRE), accurate data management is not just a necessity; it is the cornerstone of effective budgeting and forecasting. With the increasing complexity of CRE portfolios, data management has become a critical skill for property managers, asset managers, and investment advisors. In this article, we will explore best practices for data management that can help ensure more reliable forecasts and better decision-making.

The importance of accurate data management

Data management in CRE involves collecting, storing, and analyzing vast amounts of information related to properties, tenants, leases, market conditions, and financial performance. Accurate data management allows CRE professionals to:

• Enhance decision-making: Reliable data provides the foundation for informed decisions, from daily operations to long-term strategic planning.
• Improve forecast accuracy: Accurate data inputs lead to more precise budget forecasts and financial models.
• Streamline reporting: Efficient data management simplifies the preparation of internal and investor reports, ensuring consistency and accuracy.
• Mitigate risks: By identifying trends and potential issues early, data management helps in mitigating risks associated with market fluctuations and tenant performance.

Best practices for data management in CRE

Centralize data storage
Centralizing data storage in a secure, cloud-based system ensures that all relevant information is easily accessible to authorized team members. This centralization facilitates collaboration, reduces the risk of data loss, and ensures that everyone is working with the most up-to-date information.

Implement robust data governance
Data governance involves establishing policies and procedures for managing data throughout its lifecycle. This includes data quality standards, access controls, and compliance with regulatory requirements. Implementing robust data governance helps maintain the integrity and confidentiality of your data.

Use data integration tools
CRE portfolios often involve data from various sources, including property management software, accounting systems, and market analysis tools. Using data integration tools can help consolidate this information into a single, unified system, making it easier to analyze and report on.

Regular data audits
Conducting regular data audits is essential to ensure data accuracy and completeness. Audits can help identify and correct discrepancies, update outdated information, and ensure that data is being entered and maintained correctly.

Leverage advanced analytics
Advanced analytics tools can provide deeper insights into your data, helping to identify trends, forecast future performance, and optimize operations. Leveraging these tools can turn raw data into actionable intelligence.

Train your team
Investing in training for your team on data management best practices and tools is crucial. A well-trained team is better equipped to manage data effectively, ensuring accuracy and consistency across your portfolio.

Benefits of effective data management

Implementing these best practices for data management can yield significant benefits for CRE professionals:

• Increased efficiency: Streamlined data processes reduce the time and effort required for data entry, analysis, and reporting.
• Enhanced collaboration: Centralized and integrated data systems facilitate better collaboration among team members and stakeholders.
• Improved accuracy: Regular audits and robust governance ensure that data is accurate and up-to-date, leading to more reliable forecasts and reports.
• Better risk management: Accurate and timely data helps in identifying potential risks and opportunities, allowing for proactive management.

Conclusion

Effective data management is a critical component of successful commercial real estate operations. By centralizing data storage, implementing robust governance, using integration tools, conducting regular audits, leveraging advanced analytics, and training your team, you can ensure more reliable forecasts and better decision-making. Embracing these best practices will position your CRE portfolio for long-term success.

If you’re already a Kardin customer, see our Budget Bytes video series for handy tips and tricks for making the most of your Kardin application. Also, we have several articles in our blog on topics relevant to CRE budgeting and reforecasting.