Okapi: You know Your Tenants, We know Risk; our tag-line as a philosophy for our business
A year is a long time in the business world, and never has it seemed as long as 2020. The Commercial Real Estate sector has seen huge shifts over the past few months, as entire workforces remain at home on an ongoing basis, and large companies have been compelled to place increasing numbers of employees on extended furlough. This has had an obvious knock-on effect to those leasing out office buildings, and asset managers are hard-pressed to mitigate their losses as the COVID-19 crisis continues into 2021.
Is it still possible to estimate your level of risk in this volatile market and plan accordingly? What can you be doing to ensure that your CRE investments continue to perform at the highest possible level?
You already have much of the information you need right in front of you: as the person with direct contact, you are the one who knows your tenants best. You know if their businesses are flexible and therefore able to offer their employees the option of working from home; you know if their business is venue-dependant, and therefore very driven in their aim to return to the workplace at the soonest possible opportunity; you know how they personally react within their business when the going gets tough, and how this impacts their tenancy; you know which of your tenants are highly organised and which tenants work in a more haphazard manner. All of this is crucial information to an asset manager, and the importance of the tenant-landlord relationship cannot be overestimated.
With that knowledge, you can appraise your current situation: begin by considering the evaluation of your current tenants. A tenant who has proved to be historically reliable will more than likely continue to do so. On the other hand, businesses which were already struggling may well not have the long-term resources necessary to continue operating in such an unstable market.
Before covid19 became a part of our lives, this knowledge may well have been enough for CRE landlords to gauge the leasing market and make relevant business decisions, but then everything changed overnight. So much information that we took for granted in January 2020 is now defunct, and there seems to be a black hole in its place. Landlords the world over have tackled 12 months of difficulty and doubt, and are faced with the problem of creating a plan for continued business survival. What happens when you don’t know what you don’t know?!
This is where we come in: we know risk. External data providers can help you with your risk evaluation, both of current and of potential clients, giving you access to information which is beyond the remit of “knowing your tenant”. Okapi provides a comprehensive data-provision service based on our AI analysis of constant CRE-relevant input, from both our own internal data-collection systems, as well as information we purchase from third-party providers: HR platforms such as Glassdoor, labor statistics from the National Bureau of Statistics, location intelligence platforms such as State Book, market-specific data from CSIMarket, InfoGroup etc, financial reporting from companies such as Factiva, along with data capture from all the major news sites and social media platforms.
We know that our AI system has a great track record, and as a stand-alone system, it is able to predict risk with 85% accuracy. That’s a pretty good number, but not good enough. The missing factor, which can take the success rate to almost 98% is you. When we produce a report for one of your clients, an important part of the data generation is the information you provide. You have the capacity to adjust the parameters according to your personal knowledge of a client, thus completing the picture of overall risk.
One of the keys to our success is that we understand that we cannot do this alone: our clients are very much a part of the equation, hence our tagline: “you know your tenants, we know risk”. Our business philosophy is to enable a synergy between ourselves and our clients so that we can work in tandem, enabling us to generate the best possible level of risk-assessment data.
We want our CRE customers to be able to move forward in 2021 with a sense of confidence. Whilst there is still uncertainty in the world regarding COVID-19, we believe that your tenants will begin returning to the workplace over the coming months as office culture resumes. By working together as a partnership, we can help you manage your exposure to risk.
Contact our sales team today: [email protected] for a free, no-obligation trial, where you will be able to upload information for up to 10 of your CRE tenants and receive a full risk-assessment report.
