You know that one storefront in your neighborhood where new stores constantly move in, only to go out of business a few months later?
Megalytics, a Chicago-based real estate analytics startup, wants to help landlords figure out what’s up with that.
“We work with owners of commercial real estate to make better, faster business decisions with Big Data analytics,” said founder and CEO Donna Salvatore. “That covers everything from understanding whether a business would make a good tenant for the space to understanding everything about a property and the surrounding areas as well as what’s going on in the industry.”
In an era where consumers buy more and more products and services online and where storefronts are closing by the thousands, said Salvatore, it’s becoming increasingly important for landlords to get strategic about the tenants they rent out to.
“Our online platform pulls real-time data feeds from all kinds of sources, ranging from financial benchmark databases to GPS tracking of shopper movement and credit card data,” she said.
A longtime tech leader with years of experience working with commercial real estate clients, Salvatore said the idea came about from speaking with friends in the real estate industry. One of their major pain points, she said, was that the due diligence process before signing a new client was tedious, time-consuming and not all that accurate.
From that vision, Megalytics has expanded to cover retail analytics as well. Typical insights garnered from the platform include whether similar businesses have failed in the location before, how a business matches up with the surrounding area’s demographics and what its competitive landscape looks like.
Megalytics also models public domain data to assess factors on which public domain data might not be available — like the probability that a company will default. Salvatore said those insights are critical in the real estate industry, because a lot of tenants are independent, privately held companies that aren’t required to disclose their financial situations to the public.
Finally, the platform can help landlords assess how they can tweak lease terms to attract new tenants.
The biggest challenge to building the platform, said Salvatore, has been the process of gathering and cleaning up the data.
“The data sets are often not very well documented, and they sometimes contain a lot of different types of data,” she said. “With all the sources we use, there’s a lot of heavy lifting in updating and matching it.”
While the Megalytics platform is designed to be used by the landlords themselves, Megalytics also provides consulting services for its customers.
Headquartered in Ravenswood, Megalytics employs more than 20 people in Chicago. The company raised a $1 million funding round earlier this year, and Salvatore said she is actively looking to expand the team.
“Ideally, we’re hoping to double in size this year,” she said.
Photography by Kelly Thomson.
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