"An Introduction to GIS in Real Estate"

The following text is Gil Castle's final draft of the real estate
column appearing in Real Estate Issues, August 1995

Copyright © 1995 American Society of Real Estate Counselors

"A Geographic Information System (GIS) is a set of computerized tools (including both hardware and software) for collecting, storing, retrieving, transforming, and displaying spatial data."* GIS is essentially a marriage between computerized mapping and data base management systems. Anything that can appear on a map can be encoded into a computer and then compared to anything on any other map, using longitude-latitude coordinates.

Many people think of GIS as a presentation tool. A GIS does in fact create high quality maps that communicate considerable amounts of information in an efficient and attention-getting manner. ("A picture is worth a thousand words.") For example, when used to select the optimal site for a major retail facility in a certain submarket, in a few seconds a GIS can simultaneously display on the computer monitor:

The presentation benefits of a GIS notwithstanding, the technology's greatest power is in data assembly and analysis. Using the above example, a CRE might ask a GIS to draw maps identifying all places throughout the nation where the number of households and their incomes exceed a certain threshold, the number of competitors within a five minute driving time is below a certain number, and no environmental constraints exist within a one-mile ring. Similarly, when valuing a property a CRE might:

Real estate professionals who are currently in the lead in exploring the endless possibilities of GIS are retailers, brokers, institutional investment managers, and property tax assessors. Among the professionals who certainly ought to be using the technology, but for various reasons have been slow to realize the potential, are real estate consultants, appraisers, corporate real estate executives, mortgage underwriters, asset and property managers.

The overall benefits of GIS include:

Concerning costs, the prices of both software and data have been falling rapidly during the last two years. Initially, a CRE will most likely spend between $500 and $5,000 dollars, depending on the particular software functions and data needed; smaller expenditures will be needed over time as the CRE upgrades the software and requires new data. The leading GIS vendors to the real estate industry, proceeding roughly from the least to the most expensive, include Caliper Corporation (617-527-4700), Scan/USA (310-820-1581), Strategic Mapping (408-970-9600), MapInfo (800-327-8627), ESRI (909-793-2853), Tactician Corporation (508-475-4475), and Intergraph (205-730-6392). Hardware expenses are usually minimal because most GIS products run on widely used computers, usually an IBM PC or compatible operating under Windows.

The Bad News: Dozens of vendors offer GIS software and data. The differences between the products are real and complex, such that novices frequently spend more money than necessary-especially for data. No one should expect that GIS can be learned by playing with the software for a few hours, or even a few days. After gaining a solid understanding of GIS tools and data, the CRE will still have to figure out how those capabilities apply profitably to day to day real estate activities.

The Good News: An ever increasing number of publications, workshops, conferences, and other educational forums are focusing on GIS in real estate; for example, the American Society of Real Estate Counselors co-sponsored a one-day workshop in Boston in April (that quickly sold-out), and is considering additional workshops elsewhere in the nation. The intense competition among the vendors has caused them to be helpful (usually) in mailing literature, answering questions by telephone, arranging sales calls, and sending demonstration disks or even evaluation copies of the software. Most of the vendors sell extensive, plug-and-play data with the software, for one-stop shopping. Consultants are beginning to emerge who truly understand both real estate and GIS; a competent consultant can save a CRE considerable time and money in identifying which software and data bases are more appropriate to his or her business.

The bottom line is that sooner or later all real estate professionals will be using a GIS. The key question: "Do you want to be a leader or a follower?"


* Dr. Michael L. Robbins, CRE