Research: Adding Data to Your Intuition
An A/E/C/RE company can thrive on relationships, technical performance, and market intuition rather than data—maybe, for a while, with some luck!
The firms that last forever, or successfully break into new sectors, tend to be the ones that best understand their markets, informing smart strategic decisions and work pursuits. You know this. By adding data to your relationships and intuition, your firm can be proactive rather than reactive, and more easily anticipate and weather the market's ups and downs.
Research can help you understand where your key development sectors might be heading and why. It can identify specific leads before the competition has them. It can tell you what's happening next to the project you're pursuing, and who's involved. It can help your firm lead rather than hang on.
You may have watched SMPS's great program on research today, with topics such as client surveys, client capture plans, and staying ahead of social trends. I've written this blog to add my own thoughts, with a focus on questions such as "how much might get built," "why (and why not)," and "what are potential clients planning." Mostly I'm referring to internet research and the Puget Sound area.
Who and How
Some firms handle research well in-house. Maybe your business development manager and/or sector leaders have the time to fully dig into their markets and read the DJC and PSBJ. A few hours a week plus some targeted deeper dives can do wonders. If that's just an amusing dream, you can hire a consultant like me periodically, or for a few hours a week.
In any case, make sure you dig beyond the easy info. A retail brokerage report is better at defining the past than the future. A projection about the healthcare market might not be clear on the geography involved or why they think the market might grow year-over-year. Define what data you want and why, and set parameters. Look at a variety of sources so you find all the major factors and perspectives. And be current, because yesterday's news is, well, yesterday.
Every sector is a puzzle. Some are easier than others, but you can always find useful information on the internet. Again, this is in concert with your relationship-building.
For example, there's a wealth of data on the public K-12 sector. Finding it simply requires time. So search the DJC bid archives and the State budget, watch bond elections, check every district's planning and capital projects sites, and watch the CPARB applications. For high-priority districts, maybe pore through board minutes and agendas. Longer term, think about birth rates and where housing growth is happening. If your budget and geography are large enough, you might get a running start with a database download from a lead aggregator like Dodge, then edit and update from there.
The office market enjoys a wealth of centralized data and commentary, though it's a far less predictable sector. For the big picture on new development, watch how companies are rethinking their offices post-COVID, which might be a long process as current leases gradually end and employers go through trial and error. Watch employment growth, particularly tech. Listen to smart analysts and crazy ideas. Remember that every trend can have countertrends. Think about location decisions based on factors like transit. Leaven this with statistical data to show the current state, ideally the up-to-the-minute kind that costs money.
For specific office buildings, relationships are the starting point if you're an architect, because they're involved before entitlements begin. Otherwise, watch entitlements through local agencies, plus the DJC and PSBJ. There's less detail out there for tenant improvement opportunities, but you can dig up many of the basics through a service like CoStar coupled with permit searches. Add that to what you find from building managers, architects, and brokers, who tend to heavily influence smaller TIs in particular.
For competitor analysis, mine company websites, DJC and PSBJ archives, and ENR and PSBJ revenue lists. (This is a quick type of analysis, not the deeper kind that can involve surveying the market for example.)
For a specific pursuit, maybe you want bios of the selection committee, plus an understanding of current and upcoming nearby projects. LinkedIn, company bios, DJC archives, and city permitting sites are all good sources.
Now's the Time
As each sector moves in fits and starts toward a new normal, there's a new level of uncertainty for the A/E/C/RE world. But this is also the moment when market clues can be the most important, and when each pursuit is most important. New clues are popping up every day, whether it's a federal infrastructure bill or another tech describing their new hybrid office approach.
Are you really watching, and prepared?