Property Records

Site Evaluation/ Market Area Boundaries  

When doing a site evaluation you have to evaluate multiple variables that affect and create the identity of the property being considered. In order to get an overall assessment of the site you need to consider it in correlation with it regional location, site location, physical characteristics, surrounding land use, access/ visibility, and proximity to services (grocers, retail, hospital, school).

Why is it important?

When searching for a site, part of the effort is to determine the market area boundaries for the project. Within the market area boundaries there is the Primary Market Area (PMA) – an area with complimentary uses and where the demand for new and specific products is expected to emanate. An example would be Brooklyn where the demand for office and residential use development has been high. Within those primary areas there are Competitive Market Areas (CMA), which are areas from which the subject site will compete on more or less equal basis. For example, if we were developing a residential project in Williamsburg, we would compete with multi-family communities in close proximity to our site and with similar physical and economical offering range.   

Strength/ Weakness

It lays out the role that each function within a community has on the property. The correlation between the macro economical and financial indicators with the physical attributes of a site allows the investor to have a geographical understanding of the site and its relation with the surrounding properties within the CMA area and among different PMA areas in the metropolitan market where the site is located. There is a qualitative aspect in defining the market boundaries, which may make it difficult for you to determine how far are aboundires go. Especially as economical and technological advances bridge the gap between adjacent market and  blurs the line between independence and reliance among between these markets.

Resources

2014 American Community Survey; US Census; Listing websites such as Zillow, Propertyshark. For market boundaries market reports from Costar and CBRE provide geographical maps of markets, cluster submarkets and individual submarkets.

Property Records

Why is it important?

When evaluating different real estate opportunities it is important to obtain detailed property information. You can obtain this information by researching municipal property records. County recorder’s office keeps property records and property tax maps. Property records include the history of the property such as title transfers, deeds, mortgages and liens. Tax records include parcel features, physical attributes and current property assessment value. This information will help the investor to come closer to a decision based on accurate ownership and legal standing of the site.

Strengths/Weaknesses

Municipality records give an accurate track record of the property and it is an important step in the due diligence process and verification of information. It helps the investor understand if there are claims against the property and if there are any outstanding tax payments. However, if you decide to make an offer on the property, you would need to engage outside consultants and title insurance providers in order to ensure protection against liabilities caused by the previous owner.

Resources

You will be able to access this information through the website of the respective municipality and county.

Transportation

Transportation

Why is it important?

Transportation creates an inherent value for a property. The more linkages to transportation a site has, the more inherently valuable is that site. The transportation links could consist of walking, bicycling, car driving, train, and airport. Access and proximity to these links promotes convenience and creates value for residential properties that seek high rents, for office spaces seek talent and retail to determine prime locations.

Strengths/Weaknesses

Transportation data will help you understand opportunity cost that your customer is willing to forgo in order to travel between locations. I Residential rents will be lower when the commute to and from the place takes longer and when access point are few. An office tenant will likely move less if it is easily accessible for their employees.  A retail center is more likely to open at an intersection that has access to multiple linkages.

Resources

The Bureau of Transportation Statistics and Longitudinal Employer – Household Dynamics, US Census Bureau are excellent resources to explore transportation topics and it provides information about the infrastructure of the system, commuter time, system performance, traffic count For NYC, good traffic sources include  the NY Department of Transportation , NYC Future by Cart, NYC DOT.

Retail Indicators

Consumer segment trends

Why is it important?

Consumer report indicate behavioral spending in relation to services and goods provided.

Strengths/Weaknesses

A consumer report can indicate how much people spend on housing, goods, services, entertainment and historical examination of these trends can indicate shifts in consumer preference for a particular neighborhood, city, state and country. The reports can narrow down to 1 mile distance from the site which would help the investor to get a better understanding of customer base.

The service sharing platforms have changed how customers use real estate. For instance, now hotel market research has to include alternate consumer choices such as AirBnb and office space providers have to integrate the Wework model in their future projections.

Resources

Bureau of Labor Statistics provides annual expenditure survey per city/state. Independent websites such as Esri provide retail goods and service expenditure reports for specific address, borough.

Void Analysis (retail)

Why is it important?

Void Analysis is a very important tool for operators in the retail industry. It provides you with an easy to use tool to identify retailers that are not present in the immediate market.

Strengths/Weaknesses

It provides you with a targeted tenant mix based on the retail types you would want in a center. Through a Void Analysis you can identify the types of tenants you are looking for and learn which retailer categories are not represented in the immediate market area and for which one there might be a demand. Void Analysis includes also service oriented categories, whose prominence in shopping centers has been increasing in recent years. On the restaurant service categories the void analysis includes national and regional players.This is an important tool as it provides insight into local players, who depending on the number of locations and proximity to one another may indicate their market presence and expansion efforts which is vary valuable for an investor considering to invest in retail centers.

Resources

Paid service through private databases such as SiteSeer, TenantCetric, SiteUSA (Regis).