We have all heard the saying, “Real estate is all about location, location, location.” While it may seem trite and a bit overused, if you have ever tried to buy a house, open a new business or rent an apartment in a good school district, you know how true this old adage is. The same holds true for geospatial technology, an umbrella term used to describe the disciplines of surveying, mapping, remote sensing and geographic information systems (GIS). Geospatial technology links location to information to help make better, more informed decisions and to make those decision more quickly.
There is just nothing like having a good map in front of you, containing all the information you need. A map conveys the true meaning of “location, location, location.” And today’s technologies now allow these maps to become interactive (if you have not seen Google Earth, you have to check it out). Let’s say you are marketing a large piece of real estate property. A quality map is one of the most important pieces of information in the marketing process, but unfortunately, it is often overlooked or left as an afterthought.
Seeing is believing
One large commercial developer located in Jackson has a map of every subdivision in the metro area. This map includes the total number of lots in each subdivision, the number of lots without houses in each subdivision, the number of lots with houses in each subdivision, and the average home price for each subdivision.
At first glance, one would probably think, “This is a nice map,” but not too much else about it. Take a minute to really think about the information this map contains. It shows, with very precise metrics, exactly where each person lives and the drive time to any current or future commercial development. Furthermore, with the information on open lots, this developer is able to predict with great confidence where people are going to be in the future.
For example, if subdivision A only has two empty lots, but subdivision B has 50 empty lots, where do you think the population change is going to occur? Correct answer: Subdivision B. And what about the information on home price. Home price is directly related to median family income, which is the centerpiece of most demographic analysis and retail site selection.
However, the clincher is getting all of this information into a geospatial information system. Once in this modeling system, specific questions such as “Where is the best place to put an 18-screen movie theater?” can be asked with a very good answer returned. Getting good answers to questions like this usually means the difference between losing money and making money.
Beyond just maps, real estate developers and marketers are increasingly relying on geospatial visualization and simulation. Most new developments are laid out by engineers and designers in a computer aided design (CAD) tool. This information serves the technical teams well, but it is also a starting point for increasing sales.
One developer in South Carolina uses advanced geospatial modeling and visualization tools to construct a new development in the digital world well before constructing it in the real world. This enables people to know exactly what their view is going to be before making a purchase decision. Having the ability to show potential clients this type of information makes the sale much easier and can lead to increased pre-sales which reduces the risk of a new development.
Harbor Walk in Ridgeland is using some of this visualization technology to support its marketing and sales efforts, and it appears to be working well. With today’s technology it is possible to allow someone to stand on a virtual balcony at Harbor Walk and see exactly what the view will be, and not just from any balcony, but from the exact balcony they intend to buy. For many developers, this will be the difference between closing the sale and losing the sale.
Putting it in perspective
Out-of-this world 3D visualization might be a little overkill for some, but businesses of all sizes can use geospatial tools and data. Forest One, a Mississippi-based geospatial company, has helped numerous small businesses use geospatial tools. For example, Forest One has collected aerial imagery for larger commercial properties and mapped the area surrounding the property. This facilitates both marketing and due diligence. Delta Construction and Land, a local construction company, used Forest One’s geospatial tools to perform terrain analysis on land it was buying to determine how much dirt could be removed from each site to support local construction projects that required fill dirt.
For consumers looking to buy a home, geospatial tools and data provide a host of useful features such as determining true commute times, understanding the bounds of a school district and viewing the demographics of a particular neighborhood. Google Maps is a great example of geospatial data and tools used by millions of people every day, but Google Maps often lacks the specific information needed by different people. However, the data you want exists if you are willing to invest the time to locate it or work with a professional that probably already has it.
Highest and best use
Geospatial modeling can also be used by large land owners such as real estate investment trusts (REITs), forest product companies, oil and gas companies and mining companies. Organizations such as these typically own large amounts of land and every parcel is unique. Some of the parcels will likely produce a much higher return if moved into a different end use, such as being a residential development rather than an industrial forest plantation. Specialized modeling functions can be performed that will pinpoint the best use of a particular property and in turn produce the highest return.
State and local government agencies can follow a similar path to identify which economic develop areas are best suited for specific types of business. Often the question is posed as, “what type of business is best for this site,” but it can also be approached as “let me find the best site for this business.” The latter often produces much better results, but both questions are best addressed using geospatial tools and data.
Forest One has helped numerous large land owners such as forest product companies and REITs analyze their portfolio of lands and determine which property will generate higher returns by being converted into other uses. Features such as demographic data, road frontage data, population trends, access to sewage infrastructure, access to electric and gas infrastructure, distance to other new developments, terrain and FEMA flood data are considered. Using all these pieces of data, a complex analysis is performed that compares the spatial relationship between each of these features and each property.
Once these relationships are thoroughly quantified, then additional analysis is performed using comparable property sales to generate a “virtual appraisal” of the property that takes into account its “new” use. Though very complex and statistical in nature, this type of analysis can be extremely useful in acquisitions and divestitures.
In this same vein, local economic development groups can perform this same analysis on every parcel in a county to determine which parcels are best suited for a particular new use. For example, one or two parcels will rise to the top as being the best manufacturing sites. Being able to show this quantifiable information to potential businesses goes a long way toward enticing a company to locate in a particular area.
Solutions for all aspects of real estate
These are just some of the ways geospatial tools can be and are currently being used by real estate professionals. But there are geospatial solutions for all segments of the real estate industry.
From visual presentations of the desirability and value of a property for realtors to sophisticated investment analysis for commercial developers, geospatial tools offer a powerful way to manage, maintain and manipulate real estate data. But it is not just Realtors and commercial developers who can benefit. Appraisers, title companies, multiple listing services, property owners, banks and land managers also deal with spatially-oriented information and geospatial technology can prove to be a valuable tool in locating, evaluating and managing real estate properties.
Geospatial technologies, once tools primarily utilized by large organizations, have now become cost-effective, easy-to-use options for even the smallest businesses. Today, more and more businesses are realizing the practical applications of geospatial products and services to everyday life and its uses are growing very rapidly in the real estate industry.
While the technology is appropriate for a multitude of organizations, figuring out where the right information is and which tools to use will require an investment of time and energy. However, the reward will be well worth it.
For some more information, take a look at these sites:
For online mapping, be sure to check these sites:
Clark Love is the president and CEO of Forest One Inc. He can be reached at firstname.lastname@example.org. Lisa Stone is the acting director of the Enterprise for Innovative Geospatial Solutions and can be contacted via e-mail at email@example.com.