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