How the industrial real estate giant freed itself of spreadsheets and moved into a connected future
If you’ve shopped for a home or browsed listings to find an apartment better than your current fourth-floor walkup, you’ve had a plethora of online marketplaces to choose from. Each offers countless details and shiny photos along with promises of the better life you’ll live in these new walls. But in the industrial real estate space, those online marketplaces are few and far between — and good luck finding details that would make you feel like a well-informed buyer.
There’s a reason for that dearth of information, says Jeff Mangano, head of data and technology at STAG Industrial, a real estate investment trust (REIT) headquartered in Boston, Mass., that focuses on US-based, industrial properties. “Industrial real estate brokers are not incentivized to freely share information,” he says. “Reliable transaction data is a big competitive advantage for brokers.” This meant that when Mangano joined STAG, he couldn’t find what he needed in one place. But instead of plugging along in the way the industry had always operated, he and Greg Vasquez, vice-president of data and analytics at STAG, became change agents.
Mangano and Vasquez recently sat down to share lessons from their journey, including the transformation of how STAG keeps track of its 562 (and counting) buildings totaling 100+ million square feet across 41 states — and what they’re planning for STAG’s future.
Phone calls and faxes and spreadsheets, oh my
In 2015, STAG had a standard commercial real estate software system that wasn’t user friendly and only really met the needs of the accounting team. “Work was being done in email and spreadsheets that were not communicating,” Mangano says. If one department wanted to slice its data by an attribute from another department, it had to extract data from one spreadsheet and pull it into another.
The problem magnified as STAG acquired more properties, to the point where updating the status of pending deals became one employee’s full-time job. “They were responsible for collecting updated statuses for deals across the country, and manually adding the information into yet another spreadsheet. We couldn’t keep operating that way,” Mangano says.
These challenges weren’t unique to STAG. New employees who joined STAG would come in with a similar mindset. Mangano attributes that to the way the industrial real estate space has operated for decades, where information most often comes from the broker.
As the pipeline of potential acquisitions for STAG grew into the billions of dollars, the old model was no longer equipped for this type of volume.
Transforming the deal pipeline — and the way of working
Mangano and Vasquez began by tackling one process, the deal pipeline. They moved it out of multiple spreadsheets and into a cloud-based, application development and management platform.
The platform, designed to help organizations streamline workflows and automate processes, allows users to get real-time insights into their operations through a range of tools and features like dashboards, forms, and reports.
They next approached another department that relied on a similarly outdated process and offered to put its workflows into Quickbase. Next, they tackled an even larger process, and another one after that, and so on. Today, Quickbase is ubiquitous.
The deal pipeline, the first process put into Quickbase,
has now gone from around $400 million to over $1 billion in just a few
years.
“There’s no way that would have happened if it was still all in spreadsheets,” Vasquez says.
If the opportunity fits
STAG is always on the lookout for properties for potential purchase. Determining whether a property is a good match is a crucial step in that process. Before Quickbase, the team had to — you guessed it — hop on the phone and dig into spreadsheets to get market information. What’s the supply and demand in the area? How many new buildings are coming onto the market? How many workers are in the market, and what kind of workers are they? Additionally, they sought information about the area’s economic output, distance from the building to an interstate, the size and shape of the building (rectangles are preferable, L-shaped buildings with three different roof materials are not), and importantly, the potential client’s credit score (ideally someone with an AAA rating who pays rent early).
It was an overwhelming amount of data to obtain in a phone call and capture in a spreadsheet, especially since all the information was then combined and used to calculate what the company calls a STAG fit, or opportunity score. The effort to automate it all using Quickbase is a work-in-progress, Vasquez says, but is already providing STAG with business intelligence that few competitors have. The goal is targeting, he adds: “We put all the data together and in theory, we can pick off buildings we want to buy before they come to market.”
Getting into the predictive world
The move out of spreadsheets and into the online platform has been transformative for STAG, Mangano and Vasquez say.
“We have a really good sense of what the company’s looking to do,” Mangano says, with a “really good sense of financials, rent, budgeting, and forecasting.” They’re now also able to get more granular with each individual building, moving beyond basics like contact information and square feet and into roof types, lighting, door docks, and importantly, details on the 800+ leases for their 500+ buildings.
“Now that we have this data in there and it’s clean, we’re starting to enter the predictive world,” Mangano says. It’s an important consideration for the company given the state of the economy has made efficiency critical. He says that it’s much simpler for the company to examine its processes if they are in Quickbase to see how they can be more efficient.
Hand-in-hand with a renewed focus on efficiency the company is grappling with environmental, social, and corporate governance issues (ESG). The company didn’t record much information historically, and didn’t have processes or procedures in place to do so. But now it does thanks to Quickbase, where an ESG-specific workflow will collect the many data points needed to track and measure how the company is performing against its ESG goals.
Vasquez is also thinking ahead to a more digitized and connected industrial real estate world thanks to advanced technology that will let him, for instance, zoom in on an HVAC system that’s streaming data and can communicate when it’s broken from 2,000 miles away.
Charting the data-hero's journey
As Vasquez and Mangano reminisce about the old days, they can’t help but chuckle. Vasquez needles Mangano about what prep for quarter-end meetings looked like: “It was a much more labor-intensive process, coming up with numbers and metrics,” he says. Entire STAG departments would stay late the month leading up to those calls. “That has totally gone away,” Mangano says.
Mangano recalls when he and Vasquez began STAG’s journey out of spreadsheets just a few years ago. “We were looking at the analytic journeys charts,” he says. They began with the need for clean data: check, thanks to Quickbase. Next on the analytic journey, historical data: check.
“We are committed to this journey, and it is amazing to reflect on our substantial progress," says Mangano. "It is humbling to see that we are accomplishing exactly what we set out to do."
