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Nearly 40 million Americans invest in REITs

Sabermetrics and Sustainability

07/17/2013 | By Matthew Bechard

Published July/August 2013

Take one look at Los Angeles Angels outfield prodigy Mike Trout and you can see all the physical tools a baseball player could want. He is powerfully built, lightning quick and exceedingly graceful. Even if you didn’t know he was a professional ballplayer, you would likely guess he was some type of athlete.

Then take a look at Boston Red Sox second baseman Dustin Pedroia. He shares more physical traits with an investment banker than a world-class athlete. He is short, balding and not exactly chiseled. But, like Trout, he is one of the truly elite players in the game today.

The eyeball test alone doesn’t always correlate to the performance delivered.

In baseball, teams are increasingly utilizing advanced analytics to weigh a growing number of factors that not only help identify the most effective players, but ultimately put teams in the best position to win games. It’s a trend known as sabermetrics and popularized by the book and movie “Moneyball.”

You can see growing reliance on data spreading throughout a wide range of industries as challenging economic times and ever-discerning consumers make every business advantage crucial. As author Kenneth Cukier says, today, data is power.

Real estate is no different. Just look at the now-clichéd first rule of real estate: location, location, location. At one time, an ideal location was determined by something close to the eyeball test. Now companies use complex algorithms to not only determine which locations are best, but also what underperforming cross-streets are most likely to emerge as the next hot spots.

You also find this increased reliance on data impacting the ways companies implement and manage their sustainability initiatives. “Cultivating Green Data” in this issue looks at how a number of REITs on the forefront of the energy efficiency frontier are analyzing usage data in real time to make cost-savings decisions and support future operational decisions. In addition, companies are also able to produce more detailed reports for management and shareholders to validate and explain the tangible benefits of their programs.

Think of retrofitting or developing a green building like drafting a baseball team. How you collect, analyze and act on the data is essential to getting the best return on your investment. It is the sabermetrics of sustainability.

 

Matthew Bechard
Editor in Chief

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