Senior Design Team sdmay19-07 • Real Estate Portfolio Optimization

Introduction

Principal lacks an in-house (or not-3rd-party) tool capable of assessing the potential return and risk of real estate investments. Without such a tool, analysis of assets comes down to a per-property basis which lacks a high, market, level view of the investment space. Principal attempts to mitigate the lack of tooling through the use of a third party, utilizing Costar. Costar compiles quarterly reports including market and property level analysis; however, the reports are both costly and slow in the making.

An application is needed which analysis market data and user constraints to advise portfolio managers in purchase and sale decisions. The application will demonstrate principles of Modern Portfolio Theory (MPT), namely, the Markowitz portfolio optimization model. The application must be flexible to support many modes of portfolio analysis by handling a multitude of constraints over factors such as: market, property type, and time period.

Plan

Our software application will be used in a native application that would not be vulnerable to network or power dropouts.For data processing, we are going to use Python and SQLite Database. The user interface will be written in Dash which is an open-source Python framework, while visualizations will use Power BI. That will allow the Principal data science team to continue to modify the application after we are done.