Commercial real estate (CRE) continues to see a steady rise in investment allocation by global institutions, solidifying it as an important and well-defined asset class. Higher volumes of cross-border transactions are adding new complexities due to increased regulatory demands. To better cope, the CRE industry is rapidly re-examining digital strategies and demanding more sophisticated processes and data to drive returns.
With a global footprint and a prominent customer base, Altus Group (TSX:AIF) is very uniquely positioned to capitalize on the opportunities presented by these trends and drive significant value for the industry. The company is at the forefront of innovation in the CRE industry and well equipped to help clients navigate the complexities of the CRE market to make better-informed decisions and maximize the value of real estate assets.
Managing risk for real estate assets
The company’s vision is to be the leader in the valuation and management of risk for real estate assets across the value chain through the use of technology, data, analytics, and services. Over the past several years, Altus has been positioning itself as a leading CRE technology and technology-enabled services provider through the company’s investments in cloud technology and the expansion of Altus’s products and services into Europe and Asia.
Further, the company has also initiated the transition of Altus’ analytics business to a predominately recurring revenue model by moving from on-premise software sales, sold on perpetual and subscription terms, to cloud software-as-a-service (SaaS) products.
The company’s next phase of growth involves driving deeper penetration across the CRE value chain by accelerating cloud adoption, creating greater interoperability of customers’ embedded software and data applications, and providing new and adjacent data and software solutions.
Leveraging data-driven insights
Altus is focused on establishing the company’s ARGUS Cloud as the foundational enterprise platform for global CRE asset and investment management, which in the long run should leverage data and predictive data analytics to deliver real-time business insights.
In support of this vision, Altus is transitioning from high-value point solutions to a more ubiquitous model that unifies the company’s valuation and asset management capabilities to a single, cloud-based platform that enhances data-driven insights for the CRE industry.
In order to drive faster adoption, Altus is working on creating a much deeper differentiation in the value proposition between the company’s cloud and on-premise products. A key company-wide initiative in 2021 is to expand Altus’ data capabilities and develop new opportunities. The market for real-time insights from data presents a substantial opportunity for Altus.
Predictive analytical capabilities
Overall, Altus’s opportunity lies in the ability to provide the company’s clients with data architecture and data model solutions allowing clients to aggregate data sourced from third-party data providers.
Such a data platform with predictive analytics and alert capabilities would enable both equity and debt stakeholders to drive investment performance and manage risk. In support of this opportunity, Altus has formed a dedicated team and initiated internal workstreams to establish feasibility studies and a technology roadmap, which could serve as a catalyst for a higher stock price.
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The Motley Fool owns shares of and recommends ALTUS GROUP. Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.