case study
In cities across the US, the retail real estate market has faced challenges posed by high inflation, rising interest rates, and shifting consumer behavior driven by the growth of e-commerce. These factors have caused tenants as well as landlords to reevaluate rental value and property acquisition.
RIPCO Real Estate, a New York-based commercial real estate firm, utilizes geographic information system (GIS) technology to navigate these new obstacles and better support their clients. Founded in 1991 with only two brokers, RIPCO has since grown to a staff of 150, managing 30 million square feet of real estate space and serving high-profile customers, such as Target, ALDI, Chipotle, T.J. Maxx, and LA Fitness.
Legacy software tools and hand-drawn maps brokers used to match clients’ demographic needs with available building vacancies were often inefficient to create and update. However, GIS tools have significantly improved their operations, helping RIPCO scale their business across eight offices in Manhattan, the Outer Boroughs, Long Island, New Jersey, Connecticut, and recently Florida. RIPCO brokers now use GIS as a critical tool when leasing properties.
“Having integrated ArcGIS into our daily workflows, we’re now able to give brokers concrete visuals and reports to help our clients quantify decisions that they would be making,” said Will Parra, director of GIS at RIPCO Real Estate.
A detailed map of Manhattan illustrates the demographic similarities, like income, ethnicity, age, and education between census blocks.
Adopting Esri’s ArcGIS software marked a significant turning point for RIPCO’s operations.
“Our management team quickly realized that with ArcGIS, we are able to set up workflows and parameters inside ArcGIS to scale production of the map-based products that we use on a daily basis,” explained Parra.
In the past, RIPCO would hire and train multiple marketing staff and graphic designers to create maps. But with the integration of GIS technology, the firm can now focus on building out spatial data and mapping tools to better assist their brokers and clients.
“One of my main goals in building our ArcGIS infrastructure is being able to produce deliverables that are repeatable and able to answer some of the core questions that our clients are asking us,” continued Parra. “Like why they should be in a certain location versus another—that question opens a lot of possibility in terms of our deliverables.”
Chipotle, the Mexican-style quick-service restaurant (QSR) with 3,500 locations in the US, is one of RIPCO’s biggest clients. It’s also a restaurant chain with a very specific demographic profile they must target. Accessing Esri Demographics available in ArcGIS Online through ArcGIS Living Atlas of the World, the GIS team at RIPCO can tailor maps for brokers to present to clients like Chipotle.
“We marry the art and science of real estate,” said Andie Miller, senior GIS analyst at RIPCO Real Estate. “Identifying demographic profiles is on the GIS department to figure out, and then we get the real estate cost data for a much more comprehensive analysis leading to the brokers making more informed decisions.”
In addition to demographic data, RIPCO’s four GIS analysts use spatial information to help clients identify gaps in the market and understand how to fit their customers’ current geographic area. Commonly called a void analysis, staff access this report through a custom geoprocessing tool developed by the team, to determine what retailers are missing from a given trade area.
The report includes third-party retailer location data, as well as minimum and maximum retailer square footage requirements. The team also uses custom reports that include tapestry segmentation groups, like population and income levels, co-tenancy, and traffic counts.
“We do a lot of customization of our reporting and our workflows. We get better predictive analytics when we tinker with the out-of-the-box Esri products,” said Parra. “Brokers are able to tell a data-driven story to back up their market knowledge.”
For a laundromat client looking to expand in New York City, RIPCO staff used Esri standard and custom reports to analyze the laundromat’s existing footprint and to understand who their target demographic is. Asking those essential questions helped brokers present a growth plan to the client for new sites and predict what the sales could be based on historical data.
Additionally, RIPCO uses R, a free open-source programming language used for statistical computing integrated with ArcGIS to create custom statistical models that identify which and how much demographics, co-tenancy, and site characteristics drive store performance. These insights shape suitability maps, helping brokers quickly pinpoint prime locations for clients’ market entry or expansion plans.
“We leverage the statistical power of our programming with the visualization tools within ArcGIS,” said Miller. “Being able to do this kind of comprehensive analysis with ArcGIS Pro is extremely powerful.”
Results from Andie Miller's thesis shows the local R-squared values using geographically weighted regression (GWR). These values inform a machine learning algorithm that defines data-driven neighborhood boundaries, each with a unique rent prediction model.
Data-backed deliverables in their reports allow RIPCO’s clients and brokers to have more precise recommendations that align with market demographics instead of relying on anecdotal information. “We’re making our brokers more spatially literate,” said Miller.
“They are [already] experts in what is going on in the market, [and] seeing [trends] on a map is so crystal clear.”
Deciding on what maps a broker might share with a client has gone through an iterative process between brokers and GIS staff. The GIS staff can create interactive 3D maps and ArcGIS StoryMaps story that display building height, subway locations, and neighborhood amenities. Brokers see value in presenting that information to clients.
“Real estate is location, location, location, and spatial is special,” said Miller. “It doesn’t require a big learning curve to understand what’s going on in a map that’s presenting a clear, visual story about the market. Rather than reading it on a piece of paper, the patterns just jump out at you.”
In the past several years, RIPCO has grown in both market share and location-based technology expertise. The team plans to continue to advance GIS to develop more predictive analytics models for clients and brokers.
“No matter how big the company grows or how many brokers we add, we’ll always have these workflows baked into ArcGIS that will be able to scale with the size of the company,”
Learn more about the products used in this story
Esri offers multiple product options for your organization, and users can use ArcGIS Online, ArcGIS Enterprise, ArcGIS Pro, or ArcGIS Location Platform as their foundation. Once the foundational product is established, a wide variety of apps and extensions are available.