How Better Operating Data Can Lift Property Valuations

Most owners think a buyer is underwriting the financial statement. They are, but that is only the visible layer. Behind every expense line, every tenant service, every maintenance contract, and every operating assumption is a deeper question: can the buyer trust how this property actually performs? In Episode 45 of Peak Property Performance®, Bill Douglas and Drew Hall spoke with Mark Sinnett, Principal at Avison Young, about why operational data can either protect value in a transaction or quietly create a discount. The lesson was clear. A building can look polished in a package, but if the operating data is fragmented, missing, or trapped in vendor systems, confidence drops. When confidence drops, underwriting gets conservative.

You can listen to the full episode for the complete conversation with Mark Sinnett.

Buyers Are Looking Past the Financial Statement

Mark opened the conversation from a transaction lens, not a technology lens. That matters. He was not evaluating systems because they are new, digital, or impressive. He was asking a much more practical question: do the systems, contracts, records, and operating patterns support the numbers a seller is asking a buyer to believe?

His point was that operating performance is often hiding in plain sight. Owners may have the information somewhere, but not in a form that can be compared, trusted, or used. Utility costs may be in one folder. Contracts may be in another. Maintenance records may sit with a property manager or vendor. Lease clauses may be buried in old documents. From a buyer's perspective, that does not feel like control. It feels like uncertainty.

"The data is not consistent... there is probably a ton of data that's in a folder or in a line item somewhere just treated as an expense. And it's never thought of as more than that."

That comment gets to the heart of the issue. If operational data is treated only as administrative backup, it does not become a management asset. It does not help the owner explain why one property outperforms another. It does not help a buyer see where value is durable. It does not help an asset manager prove that a property is well run instead of merely well presented.

Mark gave a simple example: energy costs. One property may show energy costs of $2 per square foot while another shows $1.15. On a single-property basis, each number may be accepted as a line item. Across a portfolio, the difference creates a management question. Why is one building so much higher? Is it equipment age, controls strategy, occupancy pattern, utility structure, tenant behavior, metering, deferred maintenance, or vendor performance? Without clean operating data, the owner cannot answer that question with confidence. Neither can the buyer.

Portfolio Benchmarking Turns Expenses Into Management Intelligence

The operational value of data becomes clear when an owner stops looking at each building as a one-off. Mark described the importance of benchmarking CAM, operating expenses, and utility costs across a portfolio. That is where the same expense line starts to behave like intelligence. It shows which buildings are efficient, which are drifting, and which assumptions need to be challenged before a buyer challenges them first.

One example from the episode involved a property where the owner invested in a full digital control environment for heating and cooling. Mark described a system where the owner could see temperature, airflow, and performance from an app. The building also received a government subsidy tied to energy efficiency. The important point was not the app itself. The value came from turning building operations into visible, manageable performance.

That is the distinction owners need to hold onto. A screen does not create value by itself. A building management system does not create value simply because it is digital. Value shows up when the owner can connect operating conditions to financial outcomes: utility consumption, maintenance response, tenant comfort, staffing needs, risk documentation, and long-term asset performance.

Mark also pointed out the limitation of a single successful building. If the data stays local to that property, the owner has an improvement, but not yet a portfolio standard. The next level is centralization, where the owner can compare performance across buildings, identify the operating reasons behind variance, and reuse the lessons. That is how Property Intelligence becomes Portfolio Intelligence.

• Energy data becomes useful when it can be benchmarked across buildings.
• Building controls become more valuable when performance can be compared over time.
• Operational records become transaction assets when they support buyer confidence.
• Data & digital infrastructure becomes strategic when it is owner-controlled and portable.

This is where the OpticWise view connects directly to the transaction reality Mark described. If you don't own your data & digital infrastructure, your vendors do. In a sale, refinance, or diligence process, that means the owner may be accountable for performance they cannot fully document. The buyer sees the gap. The buyer prices the risk.

The Analog Discount Is Real

One of the strongest examples in the episode had nothing to do with smart elevators, automation, or advanced analytics. It was a lease file. Mark described working with a client who hoped the buyer would be comfortable coming into the office to look at leases because the documents had not even been scanned. Bill immediately called it what it was: a discount.

"I hope the buyer is comfortable coming into the office to look at the leases. We haven't even scanned them."

That moment matters because it shows how basic operational readiness affects perceived asset quality. If leases are not digitized, the issue is not simply inconvenience. It raises questions about how lease obligations are tracked, how clauses are administered, how options are monitored, and how confidently income can be verified. In a building with many leases written over many years, the risk compounds because the documents are not standardized. Article 5 may mean one thing in one lease and something different in another.

Mark gave another practical example: missing an option or failing to send a rent increase on time. Those are not abstract data problems. They hit the bottom line. A missed notice can reduce income. A poorly tracked clause can create unexpected obligations. A contract renewal handled from memory instead of historical data can leave expense savings undiscovered. In Canada, Mark used snow removal contracts as an example. Every fall, owners renegotiate, but if no one is tracking prior-year costs, service levels, weather variability, and vendor performance, the negotiation starts without a real baseline.

This is why transaction readiness is not a last-minute diligence project. It is an operating discipline. Clean leases, accessible contracts, maintenance records, utility history, building-system data, and tenant-service records all reduce ambiguity. They help the seller defend the story of the asset. They help the buyer underwrite with fewer assumptions. They also help the asset manager run the property before any transaction is on the table.

The broader point is that operational data is not just proof of what happened. It is evidence of how well the property is controlled. A well-run asset can show its work. A fragmented asset asks the buyer to trust the story without enough support. In the current market, that is a costly ask.

Operational Data Changes the Risk Conversation

One of the most important points Mark made is that value loss does not always appear as a clean deduction in a buyer's model. It often shows up through weaker NOI, more conservative assumptions, higher perceived execution risk, or lower confidence in the seller's story. A buyer may not say, "We are discounting this property because the operating data is poor." They may simply assume higher expenses, slower revenue capture, more staff, more transition friction, or more capital required after close.

That is why operational data matters before a property goes to market. It is not just diligence support. It is the operating evidence behind the valuation. If a seller can show consistent utility performance, clear contract history, documented maintenance patterns, tenant service workflows, access records, and reliable system controls, the buyer has fewer unknowns to underwrite. Fewer unknowns can mean fewer assumptions. Fewer assumptions can mean more confidence in the deal.

"Bad information or contradictory information or information that's lacking kind of erodes confidence and creates doubt and uncertainty."

That line is a practical warning for owners. If the information is scattered, incomplete, or dependent on a vendor's platform, the buyer has to fill in the gaps. Buyers rarely fill gaps optimistically. They protect themselves. They add cost. They slow the process. They ask for more backup. They revisit assumptions. In a market where capital is already cautious, that kind of uncertainty can affect both price and execution.

This is where the asset manager's role becomes critical. Property teams may know the building well, but transaction confidence requires more than local knowledge. It requires portable, trustworthy operating data that can survive diligence, financing, ownership transition, and future benchmarking. If you don't own your data & digital infrastructure, your vendors do. In a sale process, that becomes more than a technology problem. It becomes a valuation problem.

The Tenant Experience Is Now an Operating System

Mark also described a property where the tenant experience and the operating model worked together. Access was electronic. Elevators were controlled. Amenity reservations were handled through an app. Service requests were visible. Communication was centralized. The point was not that the building had flashy tools. The point was that the tenant felt the building worked, and the operator had better control of what was happening inside it.

That matters because tenant experience is no longer separate from operating performance. Keyless access reduces friction for tenants, but it also reduces after-hours calls and staff burden. Digital service requests improve convenience, but they also create records, queues, accountability, and response data. Elevator control improves movement through the building, but it also affects security, traffic patterns, and the daily feel of the asset. The tenant sees convenience. The owner gets operating leverage.

"It made the tenants sticky."

Drew connected that to a broader point on the episode. When systems work together, tenants feel like they are part of a property that performs better. That sense of belonging is not created by a single amenity. It comes from the consistency of the experience. Doors work. Elevators make sense. Requests are handled. Communication is clear. The building feels organized because the underlying data & digital infrastructure is organized.

For owners, that has direct economic implications. Better tenant experience can support occupancy, renewals, rent positioning, and ancillary services. But it only compounds when the owner controls the foundation. If the access system, tenant app, connectivity, maintenance workflows, and building systems are each controlled by separate vendors, the owner may have a better-looking experience without gaining durable control. The better path is owner-controlled data & digital infrastructure that allows those systems to participate in a governed operating model.

Prepare the Asset Before the Buyer Finds the Gap

Bill asked the question every owner should ask before going to market: how should owners think about data & digital infrastructure before they get surprised by a buyer? Mark's answer came back to integration, efficiency, and transition. A property that still depends on physical keys, paper leases, scattered contracts, and manual notices creates work for the buyer. Work becomes cost. Cost becomes risk. Risk becomes pressure on value.

The contrast Mark gave was simple. In the old model, closing means handing over keys, leases, folders, passwords, vendor contacts, and local knowledge. The buyer then has to reconstruct how the building works. In the better model, the operating environment is already organized. Access, tenant communication, payment workflows, service records, contracts, and system data are available in a controlled digital structure. The transition is cleaner because the building's operating memory is not trapped in people, paper, or vendor silos.

"If you can, if you want to hit the high end... you show up at a closing, here's 100 keys, here's all the leases, in a box... Or you show up and you're basically like, here's your password."

That difference captures the strategic issue. A buyer is not only buying rent roll and square footage. They are buying an operating platform. If that platform is fragmented, the buyer inherits friction. If it is organized, governed, and portable, the buyer inherits capability. That is a stronger story in diligence, and it is a stronger way to run the asset long before a sale.

Owners should not wait until a transaction to discover whether their operating data is usable. The practical move is to review the property while there is still time to fix the gaps. Start with the PPP 5C™ plan from the Peak Property Performance® book: Clarify, Connect, Collect, Coordinate, Control. Clarify what data matters, who controls it, where leakage exists, and what can be trusted. Then build the owner-controlled foundation that lets the property perform more predictably.

Actionable Takeaways for CRE Owners

First, treat operating data as value evidence, not back-office paperwork. Utility trends, maintenance records, service requests, access events, tenant communications, vendor contracts, and system performance all help explain whether the property is well run. If those records are inconsistent or hard to retrieve, they cannot support confidence when it matters.

Second, review the property before a buyer does. Look for the places where data lives in vendor systems, staff memory, paper files, spreadsheets, or disconnected apps. Ask a simple diligence question: if we had to prove this operating assumption tomorrow, could we do it quickly and credibly? If the answer is no, the issue is not just administrative. It is an owner-control gap.

Third, connect tenant experience to operating control. Amenities, access, Wi-Fi, service requests, parking, elevators, and common areas are not isolated features. They are part of the building's operating system. When they are governed through owner-controlled data & digital infrastructure, they can improve tenant experience, reduce friction, create cleaner records, and support better asset management decisions.

Finally, make portability part of the asset strategy. A well-run building should not become hard to transfer because its data is trapped across vendors and one-off systems. The goal is a property that can explain itself to an asset manager, a lender, a buyer, and a future operator. That is how Property Intelligence becomes Portfolio Intelligence. For more conversations on this topic, visit the Peak Property Performance® Podcast.

About OpticWise: OpticWise provides owner-controlled data & digital infrastructure for commercial real estate — from PPP Audits to portfolio-wide intelligence. See how we operate or read customer outcomes.