Market Analysis: Purchase

Since acquiring real estate requires a substantial financial investment, acquisition decisions demand the following specific financial information: valuation of the target asset, how much will the total initial cost be, and a forecast of the trends of the costs.

 

To help you answer these questions, we provide you with an analysis of your target market which details the current and expected future demand and supply factors/elements—such as:

 

Demand

  • Area employers who use office space; current and estimated future staffing needs

  • Average square foot area of office space required by an office worker

  • Vacancy rate for the specific class of office building

  • Accessibility and cost of transportation

  • Factors that affect the appeal of the office building (quality of construction, mgmt., tenancy) and the availability of support facilities (shops, restaurants, recreational centers)

  • Area employers who use industrial space; current and estimated availability of skilled and unskilled labor.

  • Employment in manufacturing, wholesale, retail, transportation, communication, or public utilities.

  • US and regional economic growth that affects local demand

  • Overall employment growth

  • Caro flows by transport type (truck, rail, water, air) and product type (high or low bulk)

 

Supply

  • Quantity and quality of available competition (standing stock)

  • Volume of new construction

  • Availability and price of vacant land

  • Cost of construction and development

  • Currently offered properties (existing and newly built)

  • Owner occupancy versus tenant occupancy

  • Causes and number of vacancies

  • Conversations to alternative uses

  • Special economic conditions and circumstances

  • Availability of construction loans and financing

  • Impact of building codes, zoning ordinances, and other regulations on construction volume and cost.

 

Real Estate Cycle

  • Determine the current phase of the market’s real estate lease cycle for office or industrial properties.

Market Analysis: Lease

Sound leasing decisions require sound information. When evaluating lease options, corporate tenants will need to know how much rent you will need to pay in order to gain access to certain markets, the likely future trajectory of rental rates, the share of expenses that renters typically pay within a market place, and whether lease terms in a market are sufficiently flexible to meet any changing space needs. 

 

To help you answer these questions, we conduct a market analysis that analyzes the relationship between demand and supply for office and industrial space in a market that meets your business needs.  Our market analysis analyzes the following demand and supply factors:

 

Demand

  • Asking rent, Contract rent, Effective rent

  • Direct and Sublet Rental Rates

  • Availability and Vacancy Rates

  • 12 Month Absorption SF

  • 12 Month Leasing SF

  • Months on the Market

  • Probability of Leasing in Months

 

Supply

  • 12 Month Construction Starts

  • What is currently Under Construction

  • 12 Month Construction Deliveries

Real Estate Cycle

  • Determine the current phase of the market’s real estate lease cycle for office or industrial properties.

 

After collecting and analyzing the above market data, we then help you apply the information when comparing potential lease opportunities by calculating for each lease:

  • Total Effective Rent & Rate

  • Average Annual Effective Rent & Rate

  • The Present Value of the Discounted Effective Rent

  • The Total Cost of Occupancy.

 

The above analysis will help you make decisions as to how much to forecast for annual rental costs, the duration of the lease, and help make sure you are getting space at the lowest possible cost.