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When John Schultz, senior vice president at commercial real estate firm MacKenzie Retail, was asked to lease out space in the South Cumberland Marketplace, he knew he had his work cut out for him. The shopping center is located in a sparsely populated, rural area of Maryland and the building lacks aesthetic value. It's not exactly the ideal location for most businesses.
But after working with the property owner for six months, Schultz was able to lease 25,000 out of the available 30,000 square feet. A previous realty group that worked with the property owner spent three years on the project and leased no space. Schultz said during his presentation at the TDWI Executive Summit in Boston that he was able to accomplish this thanks to location-based analytics technology.
"This I attribute to being able to tell a story with the data," he said.
Schultz worked with Datastory Consulting, which specializes in location analytics. Together they were able to create maps overlaying characteristics of the local population, including median income, demographic data and other information. They compared this information to similar regions in the state to see which stores performed well in those areas. Schultz said this made it easy to target prospective tenants and get the space leased. Now the location hosts a Save-A-Lot, Dollar General and West Maryland Health System.
It may be surprising, but this approach is somewhat revolutionary for the real estate industry. Schultz said that few agents use this kind of approach to get their spaces leased. Considering the obvious spatial component to the work, location analytics makes a ton of sense.
"It's surprising that real estate has used 'stone tools' to look at a site and determine if this site is going to work for a company," he said.
Elizabeth GrayIT manager of the City of Austin, Texas Fire Department
Real estate isn't alone. While many industries deal with location as a major component of their work, relatively few are using location analytics. Dresner Advisory Services' 2014 Wisdom of Crowds report on location intelligence concluded that location intelligence is "hugely underpenetrated" with relatively few end users, even at enterprises where the technology is in place.
But it is gaining momentum. At the conference, Elizabeth Gray, IT manager of the City of Austin Fire Department in Austin, Texas, said her department is about to implement an expansion of its geographic information system (GIS). Municipal departments have mapped out much information about the city in a GIS system from Esri, one of the main vendors in the GIS market. But the problem has been translating that data into a format that an average user can make sense of.
"It has to be easy enough," Gray said. "It has to be usable and accessible. That is what I'm trying to optimize is end-user accessibility."
Currently, the fire department is using a visualization tool from Qlik to develop business intelligence and performance improvement reports. She wants the geographic data to be viewable in this system, which she said users like. There was no simple integration option between the Qlik and Esri systems, but the department is currently in talks with a third-party vendor to integrate the two systems.
Once up and running, Gray hopes to use the system to develop maps examining response times to specific areas, displays of common emergencies by location and resources for city councilors on their districts.
"Everything our fire department does is connected to a point of dirt on the Earth," Gray said. "So that spatial analysis element is essential to really get intelligent information about what we're doing."
Matt Felton, president of Datastory Consulting, said he thinks location analytics is set to explode in popularity. Any business can use it to determine where they should put a new location, where they should direct their marketing efforts or how to best use existing real estate.
"What we are doing with maps is creating a new platform to ask new questions," he said.
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