01 Jan Site Selection | Finding the right location is everything!
Feasibility Analysis for CRE Investments are critical to any successful venture. Far too many fail to go beyond the most rudimentary measurements and often get bogged down with an age old question of which comes first “the chicken or the egg”: market analysis vs. financial analysis. In reality, most rudimentary measurements are just filters or a way to say there is no interest to doing any real analysis.
To truly evaluate any venture, analysis needs to be completed almost simultaneously and as quickly as one can do without sacrificing due diligence. As prolonged procedurals drown opportunities and leave many wishing for what could have been. As Pat Riley said “There’s no such thing as coulda, shoulda, or woulda. If you shoulda and coulda, you woulda done it.” To paraphrase a few other points:
- I follow three rules: Do the right thing, do the best you can, and always show people you care. …
- It ain’t what you don’t know that gets you into trouble. …
- Small minds are concerned with the extraordinary, great minds with the ordinary. …
- The cure for anything is salt water: sweat, tears or the sea.
Timeless words which summed up mean hard work and looking for ordinary opportunities. Just like in sports I feel these provide a solid foundation in any business endeavor. We look to the fundamentals and the truths which are constant rather than flashy to good to be true returns. As truly extraordinary returns have historically came from the unannounced and frankly often heralded with impending doom rather than with fanfare. I do believe there are truths hidden in famous quotes precisely because they ring true in the ear of many but often go unrealized in equal measure. One of my favorites is from Albert Einstein who said “In the middle of difficulty lies opportunity”. Warren Buffett appears to reference this in saying “We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” Mr. Buffett’s genius was an ability to simplify complex ideas not only into wonderful quotes but proven business analyses which have stood the test of time. He has spent a life dispensing advice to all who would listen but did they hear it? Often I think not but believe they chose to dismiss his embracing of fundamental business principals in favor of bestowing mythical powers upon the “Oracle of Omaha”. To his credit I believe he has pointed this out many times.
- the delineation of a retail trade area
- the ability to quantify demand
- to estimate potential sales
- an appropirate tenant mix
- the target market for those appropriate tenants
- and complete financial feasibility tests
An advanced market analysis for commercial real estate is much like a detailed business plan and as such designed to improve your understanding of timing and location. A through analysis done properly can increase if not ensure your possibilities for success in any market. Our hands-on approach and experience with market analysis tools will help identify the best locations for specific types of properties. These analyses will help enable you to make better decisions and chart a course for success. The tools employed often offer the best indicators for success.
- We use supply and demand data to identify property sectors and geographic submarkets that offer the greatest commercial real estate investment opportunity both now and in coming years.
- We conduct a hands-on analyses of a target market and submarket using the latest software too.
- We identify the greatest areas for growth depending on your needs and use in each CRE sector in your target market.
While ideal for retail these also work on office, industrial and multifamily ventures. Such analysis often provides an excellent baseline which can be used for future analyses or comparisons. We believe in learning to be more effective through the process of acquiring existing properties and the ability to maximize the return on investment as being born in such analyses. While we continuously seek to improve retail investment return using GIS. Often those who work in other sectors ventures can easily see the benefits of using the latest GIS tools including BAO (Business Analyst Online) and ARCG is in their business. Some examples these tools provide us with an ability to:
- Delineate primary and secondary trade areas for various retail type stores
- Perform gap analyses for various retail properties
- Analyze consumer retail expenditure patterns and lifestyle data
- Improve maps with traffic counts and annotations
- Establish minimum demographic benchmarks to measure feasibility
- Develop before and after tax financial pro formas
- Price existing improved retail properties
- differentiate between transportation and accessibility improvements
- explain the challenges of integrating new transportation systems into existing systems
- list and define accessibility issues outside and inside buildings
describe the importance of life-safety networks and systems
articulate how a developer gets paid using various payment and financing structures
In the end, we work hard to understand your business and bring our knowledge and experience to help guide a process. Often communication and our ability to bring many different professions together to resolve such complexities is our best tool. Despite knowing better, we do our very best to make it appear incredibly easy! However, we believe commercial real estate truly is a team sport!