To RealMassive, an Austin, TX-based data provider for the commercial real estate industry, the sector has its eyes on the wrong prize.
Data in commercial real estate largely breaks down into two types, the company says: relatively public information, like the rent or square footage of an office space that any broker might have, and private information, such as the length of a tenant’s lease or a move-out date.
RealMassive thinks of that public information, or “primary” data, as nuggets of gold. It is generally free and available, if you ask the brokers who have it, though it’s not centralized. That’s what RealMassive is doing, bringing all that data together in one place, on its website, for real estate markets in almost 30 U.S. cities, with plans to expand to 72 markets overall.
The private proprietary data—say, end-dates on commercial leases—can drive more interest from people like commercial brokers because of the ability to gain “insider” knowledge. Like a big bar of gold squirreled away in Fort Knox, there’s more perceived value in it than in a smaller nugget.
But that is just a perception, says RealMassive CEO and cofounder Joshua McClure.
“Once you get the whole picture, there’s a lot more value in the open data than there is in the proprietary data,” he adds.
RealMassive shows the value in that primary data—that the pile of gold nuggets can be more valuable than the bar of gold—through analysis, like someone on Wall Street does with growth stocks or bonds, says RealMassive president and cofounder Craig Hancock. Not everyone knows how to do this type of advanced analytics, which is partly what RealMassive’s business model is counting on.
The company plans to sell memberships for a service that provides those quantitative analytics, developing and studying data sets such as how the rental rate of office space changes every three months or which characteristics of office spaces—such as creative or open ones—have been driving rentals at the fastest pace, Hancock says.
“If you just look at that primary data, you’re not going to be able to get type of that insight,” he says. “It’s through the calculation, through statistical analysis, and the data science you do on all the supply and all the demand, that will help you get that derivative view on the market.”
RealMassive expects to launch the paid service—which will be sold in subscriptions of $357 a month—in the second half of 2015, after it closes a round of venture capital financing later this year, says McClure, the CEO. Subscribers will receive specialized dashboard tools that help them visualize and process the data, with charts, graphs, and other options that RealMassive is currently building.
As of now, the company is scouring the country collecting publicly available information on the real estate market, making it available at no cost for anyone to use, just like residential real estate information on websites like Trulia or Zillow. The company has raised $4.6 million from private and angel investors to date.
When the subscription service launches, RealMassive’s founders
