The Vitality Index Measures Foot Traffic by City and Industry

While organizations like Kastle Systems can provide badge-swipe data that helps quantify the number of people occupying a building, Avison Young has upped the ante, leveraging data from Orbital Insight, a geospatial data and analytics company. By tracking cell phone "pings" inside key buildings, the brokerage firm created a public-facing platform that enables anyone to measure how foot traffic in each of 20-plus U.S. and Canadian cities is changing, compared to key pandemic-related lockdown dates since 2020. These figures can also be gathered for major industries in each market.

Another dimension of the platform, available exclusively to clients, provides access to this and other types of data, for any location in the U.S. or Canada, a significant reach beyond the 20-plus markets available to all on the firm’s website. “Our clients are using this data to ultimately derive their real estate strategies, whether they're occupiers or investors,” said Craig Leibowitz, executive director for U.S. innovation and insight at Avison Young and one of the creators of the product.

“We can isolate any location in North America,” Leibowitz said. He explained that making this a public and private dataset supported the business case for partnering with data provider Orbital Insight, and developing this platform.

The public element of what Avison Young calls “The Vitality Index,” shows, among other things, how the number of people moving about a given city has fallen or risen compared to a previous date. For example, a user can select a market like Austin and see that foot traffic today is roughly 63% below where it was the week of March 2, 2020, just before the country went into lockdown. If you select a market like San Francisco, you will find that foot traffic for the same period is down by a whopping 85%.

Leibowitz noted that over the course of the pandemic hundreds of clients all asked the same question: “are people returning to the office?”

This desire to understand if and how many people were populating office buildings was at the heart of compiling this data and creating the platform. That discussion evolved into other conversations about additional ways to leverage this type of data, resulting in a dataset that covers significantly more territory.

The data collection was made possible by a relationship with Orbital Insight. The company collects and interprets cell phone data through which it can measure the number of cell phones gathered inside a set geographic area on a daily basis or even by the minute, Leibowitz said. To gather the data, “we geo-fenced single-occupier properties that were representative of the unique industries across different cities,” Leibowitz noted.

In other words, they identified buildings occupied by just one tenant that represents a key industry in each market. To keep the data anonymous, Avison Young does not disclose the buildings or the companies. The firm selected these representative buildings based on their knowledge of tenants that occupy entire buildings and the industry each is in. This collection of buildings is then used as a proxy for the industry in that particular city.

Leibowitz said that firms are looking at large companies in their own industries to determine the pace and timing of their own return-to-work policies. “No two occupiers are navigating their return-to-work efforts in quite the same way, because there are so many different variables at play. The degree to which they can look at their peers and follow suit means there's an opportunity for them to start to navigate a market … with more conviction,” he noted.

The data is collected from individual cell phones as they access satellites. “The cell phone will ping periodically and as long as a cell phone is situated within any of those office locations, for more than one minute, that data will be captured and anonymized,” Leibowitz said.

The capture area for The Vitality Index excludes sidewalks and streets and only isolates pings from inside the target buildings. That dataset is then extrapolated using an algorithm to represent the total number of people at that location, according to Leibowitz.

For clients, Avison Young can change the geography to cover any area at all, including exterior sidewalks and streets. They can capture data along the Golden Gate Bridge, inside hospitals or in any number of unique areas “where we don't have to be held back by badge swipes,” Leibowitz said.

“We chose cities first and foremost,” Liebowitz explained. “For example, Houston is really anchored by a single industry [energy]. So, we largely anchored this analysis in the representative industries,” in each city.

“We didn't want to represent every industry in every geography,” he continued, “it wouldn't be possible. One of the reasons for that is there simply aren't enough single occupier properties representative of all of these industries in each of these cities, even in New York City.”

Leibowitz indicated that they used this approach because it best served their fundamental goal of determining “which cities are returning to normalcy more quickly and what industries are driving economic rejuvenation.”

He noted that measuring the return of employees to offices was a beta test of sorts for this type of cell phone data and that Avison Young will continue to release figures similar to those in The Vitality Index, but for different product types.

“Each of our clients interprets markets differently or has different business strategies,” Leibowitz said. He continued that the degree to which they can demonstrate their broader capabilities, in a piecemeal format in a public setting, is an opportunity. “And that's part of the strategy behind what you see here, which we're really excited about.”

What this means is that there is additional functionality to be derived from this dataset, enabling Avison Young to integrate it with all of the real estate and other datasets they have internally. “That's the power of the platform,” Leibowitz said.

Leibowitz indicated that institutional investors — many of whom have models that help them quantify market and submarket activity over time — can integrate this type of data into their models and use it as one more indicator in their analysis.

“We could get pretty granular with this data,” Leibowitz said, indicating there is applicability for a broad range of users from law enforcement to retailers seeking to quantify foot traffic in certain locations at different times of the day or week. This data could, for example “substantiate the retail performance of an existing location from an investment perspective,” Leibowitz noted.

Leibowitz said that there are three critical variables influencing return-to-work efforts across cities. They include governmental regulations, which are informed by vaccination and infection rates. In addition, the industry composition of the tenants in each city also plays a role. For example, tech is an industry that's embraced remote work, so employees in tech-dominated markets are largely working from home. The third component is whether or not employees use mass transit to commute to the office.

Using The Vitality Index, Leibowitz generated the following results in response to two questions posed by LoopNet. To interpret the data below, keep in mind that the questions below measure how far off today’s foot traffic is from foot traffic before the pandemic lockdowns began. So, until foot traffic returns to or surpasses pre-pandemic levels, “improvement” will present as a negative figure.

1) What five U.S. cities have shown the most improvement in foot traffic (all industries) between March 2, 2020 and today?

• Austin, Texas -62.9%
• Boston -67.8%
• New York -71.6%
• Los Angeles -72.7%
• Houston -75.3%

2) What five U.S. cities have shown the least improvement in foot traffic (all industries) between March 2, 2020 and today?

• Miami -88.4%
• Silicon Valley -87.0%
• Dallas -86.0%
• Atlanta -86.0%
• San Francisco / San Francisco Peninsula -85.0%