What Goes into Expert Commercial Real Estate Research?
What makes a business owner or franchisee successful in the dynamic DFW property market? The answer is location, location, location. And expert commercial real estate research is how owners, franchisees, and investors gain crucial insight; through comprehensive market reports and analysis. Even better, having subject matter experts conduct this research empowers you to make better-informed decisions when choosing between prospective locations. As a result, you can optimize your property investments and stay competitive.
It’s a fact. Commercial property owners and investors often overpay for assets without a solid grasp of market dynamics. Not conducting thorough commercial real estate market research can have grave consequences. In contrast, CRE market analysis vastly reduces your risks of missing out on lucrative deals and making wrong decisions.
This article delves into the multifaceted aspects of commercial real estate research. It offers a comprehensive understanding of the various components involved. Moreover, you will see how an independent CRE agent helps you prioritize business objectives.
CRE Market Reports Defined
Commercial real estate market reports encompass critical data and research. Commercial real estate market reports encompass critical data and research. If you seek valuable insights, you can request specific information or a full market review from the CRE researcher. These findings could include market trends, vacancy rates, rental rates, and other relevant factors. The report gives invaluable insights that help you make the best-informed decisions on property types and locations.
CRE Market Reports Format
CRE market reports typically use maps and text to provide a clear overview of market conditions. The maps visually represent commercial property locations, boundaries, demographics, and trends. Text analysis gives insights based on the report’s data. And together, the visual and text elements convey a comprehensive understanding of a target market.
This example shows the density mapping of an area based on age:
The sample table below illustrates the CRE demographic data of age groups in text form:
The table breaks down the age group distribution for the researched area. Data like this is crucial for businesses and investors analyzing potential target markets.
Let’s use a fictional franchise business to further illustrate the elements of a CRE research report. In our four-point mockup, the business owner is looking for premises to run extracurricular coding education for kids and teenagers. Here’s what the real estate analyst needs to do:
Research the Local Area
Map the Area’s Demographics
Analyze Household Incomes
Create a Comprehensive “Crème de la Crème” Map
1. Research the Local Area
The first consideration for our mock business is to assess the local demand for coding education. The market research report should identify potential territories with a concentration of the client’s target audience. Costs are another consideration. Those would include any business and tax incentives offered by the town, city, or county. These preliminary findings are vital. The research tells you whether the business idea is feasible in the target area.
2. Demographics Mapping
Our fictional business’s target market is students aged 7-17 years. Identifying areas with a concentration of this demographic is crucial for deciding on a strategic location. The data helps investors select optimal educational center locations and effectively target advertising campaigns.
So, mapping student demographics from second grade to high school seniors is essential. The CRE research should also review the area’s demand for out-of-school coding education to ascertain the level of local interest.
3. Analyze Household Incomes
Ensuring affordability for the local audience is paramount. CRE researchers accomplish this by creating and analyzing a household income map. This data identifies areas where the target demographic can afford the planned services. In our sample, the ideal focus might be an area with $100k+ HH income. This figure would represent successful parents keen to equip their kids with in-demand skills like coding.
Another consideration to understanding the potential market size and demand is household composition. These findings provide insights into the number of households with children within the target age range, directly impacting the market opportunity size.
4. Create a Crème de la Crème Map
A “crème de la crème map” is a detailed collection of all critical data. It combines customer demographics, household income, and other relevant information. The map is a snapshot, pinpointing the most suitable locations based on the investor’s demands. That could include foot traffic patterns, transportation accessibility, and proximity to amenities and infrastructure. This data enables our franchisees to strategically place their new business within proximity of their target demographic.
Not All Commercial Real Estate Research Is Equal
Not all commercial real estate research is performed the same way. The value of a report depends on the quality of its data sources and the analysis methods used. Hence, there can be differences between real estate brokers in accuracy and reliability. Likewise, the expertise and experience of the researchers also impact the depth and insights provided.
Let CRE Experts Research Your Ideal Property and Location
The team at LiNC Commercial Realty is highly knowledgeable in the dynamic DFW CRE market. As a full-service firm, we offer first-rate tenant representation and project management services to business owners and franchisees across industries. Our deep understanding of the market and industry trends makes us a trusted advocate and subject matter expert for your CRE research needs.
Due-diligence timelines are vital for long-term property investments. While current facts are valuable, so is examining data spanning several years. A long-term perspective gives you a more thorough assessment. It shows whether the target area and its key prospects are experiencing growth or decline. So, reviewing future trends helps reduce the risk of choosing locations that may be suitable now but potentially less viable in 3-5 years.
Summing Up CRE Expert Research
As well as the data discussed earlier, you should consider what else you may want in your CRE report. Targeted analysis helps you make well-informed decisions aligned with your target market. And that, in turn, is what maximizes your chances of securing profitable investments, attracting the right tenants or buyers, or achieving a high return on your investment.
If you’re a new franchisee feeling overwhelmed, know that help is available. Franchisors are not your only source of support. Yes, they can help set up your business and establish a location. But the franchisor’s preferences don’t have to dictate every aspect of your new venture. As a franchisee, you can seek a second opinion from an independent CRE broker, like LiNC Commercial Realty.
Working with an experienced agent places the focus on your success rather than that of the franchise chain. You may find that unbiased advice and personalized attention is a better way forward for you and your new business.
Expert CRE Research In Closing
Expert commercial real estate research is vital for business owners and franchisees in the DFW market. These market reports offer insightful information through analysis that helps increase your chances of securing successful properties and reducing risk. Finally, although franchisors help franchisees, don’t let them hinder your plans. Consulting an independent CRE broker like LiNC provides you with unbiased advice and support not offered by franchisors.