As one of the world’s largest and most diversified real estate investment managers, BGO has made data science a core component of its investment strategy. This leads them to discover hidden gems in unexpected places. No wonder, then, that the firm has grown to an eye-popping $89 billion in assets under management. Specifically, it is redefining how data analytics should inform real estate decisions. Co-CEO John Carrafiell has been at the forefront of this creative strategy. He argues that while data isn’t everything, it is central to recognizing the most profitable opportunities.
The firm’s data science team, consisting of about six advanced practitioners, is cross-functional. From there, they are in lockstep with the CEO and the asset management and acquisitions teams to inform strategic decisions. This unique placement encourages collaboration and provides opportunities for easy, in-the-hallway communication between departments. During the team’s analyses, they have leveraged thousands of data inputs. To do this, they use free open data aggregated by government entities and buy premium analysis from telecom providers.
BGO prides itself on a data-driven approach to investment strategies. This commitment became evident in its recent pledge to invest $250 million in an industrial development project in North Las Vegas. The firm’s joint venture with Northpoint Development for this project emphasizes its joint venture-oriented and collaborative approach. Data science team was key in this decision. They employed a deep learning model to assess BGO’s previous transactions over the past 20 years.
The model showed that investing the $5.88 per square foot would be a good financial strategy to underwrite. However, once the project was completed and operational, BGO achieved rents significantly higher than anticipated, reaching around $9 per square foot. Through this success, we get a glimpse of just how powerful BGO’s data science approach can be. Its BGO’s ability to take changing market conditions into account deserves praise.
BGO’s analytical capabilities extend beyond Las Vegas. The firm has brought the same, data-driven approach to their investments across Florida and the Rust Belt, winning high-flying returns on a number of projects. By consistently applying these analytics to various markets, BGO is positioning itself as a leader in the real estate investment sector.
As we work to advance BGO, we’re bringing data science into the fold. This decision is indicative of a larger trend within the industry, as firms increasingly understand the value of smart decision-making. By employing advanced analytics, BGO is able to assess risks more accurately and identify potential high-value investments that may have been overlooked by traditional methods.