The EG Interview: Vertis and real estate’s date with data

“If people aren’t excited about these problems? Then… wow.” The “problems” Sam Hocking is talking about mark nothing less than a rethink of how the modern office should work and where it should be – conundrums that office occupiers, landlords and developers have all been grappling with since the outbreak of Covid-19 and subsequent rise of remote working almost three years ago. Hocking doesn’t pretend to have all the answers. But he hopes that Vertis, the data science company he co-founded as the pandemic took hold, has some insight that can help. The company, investors in which include New York-listed tech company Alteryx, uses various data sets to analyse factors such as commuting patterns, labour markets and city migration trends to advise clients on their optimal real estate footprint. “This is such a global, societal issue,” says San Francisco-based Hocking over a Zoom call. “How are people going to work? Where are they going to work? How often will they go to the office? It’s maybe a reconstitution of how we think about our life and work.” Analyse this Hocking was working with co-founders Dave Withers and Gordy Holterman on Vertis before the onset of Covid-19. He had been working on data analytics with a real estate investor – he declines to name the firm – that wanted to spot “the next up-and-coming cities”. “If you can understand the attributes driving any city and how it affected real estate, you can get an early signal and find the next Manchester or Austin or Nashville,” Hocking says. By the time the company launched in the summer of 2020, that notion of location analytics was taking on a new significance. And that was even clearer by the time the company had a product ready in early 2021. Now, combining the company’s own data sets with clients’ internal data, the Vertis team says it can advise businesses on where its real estate should be and how they should be using it. The company has struck tie-ups with real estate companies including WeWork, which offers its data analysis to larger clients. [caption id="attachment_1102148" align="aligncenter" width="847"] Image © WeWork[/caption] Hocking is a former journalist whose roles included working for the BBC during a stint living in London in the early 1990s. He moved into finance, ultimately co-leading global sales for prime brokerage at Bank of America and then overseeing the integration of that business into BNP Paribas when it was sold in 2008. Asked whether real estate as an industry has proved eager enough to grasp the potential of data and analytics, he looks to his past as a “long-time financial services guy” to draw a comparison.  “When I first started, data wasn’t that prevalent in making decisions. One of the big changes that happened in financial services is when the hedge funds really got going – they were really data-driven. You could just see how much they were using – data, data, data – and it influenced the banks. I would go see some of the big hedge funds and I would think, ‘Oh, I know more than you do’. And I would sit down and they knew twice what I did because they just had data – more than I did – and they were analysing it.” Real estate companies were like big banks for a time, he adds. But that is changing. “For real estate companies, the big ones, while they used data, there wasn’t a forcing function for them to really invest deeply into data analytics, data science, to drive different decisions,” he says. “I think what’s happened is with the pandemic and some forcing functions, companies are saying, ‘We need to get more involved in how we analyse things, how we look at different markets’. There’s some positive momentum, but there’s a long road ahead.”   Travel and turnover Hocking points to Vertis’s ability to help companies analyse the commuting patterns of existing and potential staff as a significant factor in helping them to weigh real estate options.  “Companies started asking ‘How far do people actually live from the office?’ They weren’t really that aware,” Hocking says. “They’re trying to understand: ‘how can we make this a better experience for our people and are they travelling too much?’” Hocking says. “I think what they are fearful of, if people are traveling too much, is that there is going to be a higher rate of attrition.” That plays into a bigger shift in the corporate world, Hocking adds – namely, that if a company embraces remote working, it broadens its talent pool as well as gaining access to workers who may have turned their back on a commute.  He points to a friend who moved from Apple to Spotify. The pay was the same, he says, and Spotify allowed him to work remotely. “For Spotify, or companies like that, it would have been really hard to get that person out of Apple,” he says. “But because they know they have to be more flexible than maybe Apple does, they get that kind of talent now. I think it creates more opportunities for people.” For real estate investors, the focus should be on post-pandemic migration trends, Hocking adds. “What’s the migration to different cities – and secondary cities – and what kinds of people are those?… Migration is really changing a lot of cities. Miami is a great example – there’s tremendous migration to Florida, tremendous migration to Miami.”  Good problems to have Hocking has little fear about the death of the office. “I believe people are going to go back to the office,” he says. “I’m not saying five days a week, but there’s too much loss of collaboration, innovation and human connection. And this is what gets missed. What people are missing is the human connection of how to solve problems, how to innovate, how to collaborate.” He sees that in his own work as he steers a relatively young team through shifting markets. And that, he posits, is the real crux of the future of the workplace.  “As a founder, what we have to constantly do for our young people is create interesting problems for them,” he says. “It’s not about do we have a ping-pong table or pool table or free beer. It’s about can we create interesting problems for people so that they are like, ‘This is really exciting and interesting’. I think we’re in the middle of the biggest work transformations since the industrial revolution. And if people aren’t excited about these problems? Then… wow.” [caption id="attachment_1134592" align="aligncenter" width="847"] Image © Gerd Altmann/Pixabay[/caption] To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews