How Google Trends Can Inform Commercial Real Estate Investing


What can internet searches tell us about commercial real estate markets? Quite a lot, in fact.

It’s well known that individuals’ searches provide a wealth of information for companies to use in targeting their products and services. This information isn’t just useful at the level of single users, though. Viewed in aggregate, online searches can provide high-level information on consumer and market trends around the world.

Aggregate search data could, for instance, allow investors to identify locations drawing significant investor interest, or track trends in overall global sentiments around commercial real estate.

In recent years, researchers have begun to demonstrate the power of online search data to uncover and illuminate various economic and business trends. In 2012, for instance, Google’s Chief Economist Hal Varian showed that the company’s Google Trends tools could use aggregate search data to now-cast car sales and developments in labor markets. Similarly, in a 2013 study in the scientific journal Nature Scientific Reports, researchers from Boston University and the University of Warwick demonstrated that Google Trends search data could help predict movements in stock markets.

These findings have implications for the commercial real estate world, as well. Aggregate search data could, for instance, allow investors to identify locations drawing significant investor interest, or track trends in overall global sentiments around commercial real estate.

To date, such notions, though promising, remain relatively untested. However, because Google Trends has categorized commercial real estate queries as such, data on how often and over what periods of time people have queried commercial real estate and investment is readily available.

These queries can be investigated both from a global standpoint and with regard to the commercial real estate markets of specific cities, allowing for what we believe could be useful comparisons of individual markets both to each other and to broader international trends.

Take, as an example, Google Trends data for commercial real estate searchers in London, New York and worldwide over the last decade. As might be expected, this data shows a decline in commercial real estate queries in all markets in the aftermath of the 2008 Global Financial Crisis. This is then following by a rebound, with particularly sharp rises occurring in the New York and London markets, perhaps, we would suggest, due to their reputations as “safe havens” for real estate investment.


Additionally, a look at the London market specifically shows that the number of online searches related to commercial real estate is strongly linked to the market’s performance. In fact, from 2005 to 2016, London market performance and the number of searches showed a contemporaneous correlation of .84, indicating an extremely high correlation between the two.

It makes sense on an intuitive level that higher numbers of searches for commercial real estate in a city would indicate investor interest in that market. Of course, one might note that the opposite could also be true—that negative market performance could lead to an uptick in investor interest and online searches.


In any case, we believe the strong observed correlations between market performance and search volume suggest that data like that provided by Google Trends could prove a useful addition to existing indicators. Those of us in commercial real estate are accustomed to looking at macroeconomic indicators like the European Sentiment Index and the Federal Bank Lending Survey. We would suggest that city-level search data could help complement such macroeconomic information by providing a more narrow, local view of market conditions and investor sentiment.

The information is out there. We just have to put it to use.


Dennis Schoenmaker, Ph.D., is an economist at CBRE. Michiel Daams, Ph.D., is a researcher at the University of Groningen.


Sign up to receive our Weekly Newsletter